Exhibit 10.7

 

Option No.:     

 

NEXTCURE, INC.

2015 OMNIBUS INCENTIVE PLAN

 

[INCENTIVE][NONQUALIFIED] STOCK OPTION AGREEMENT

 

NextCure, Inc., a Delaware corporation (the “Company”), hereby grants an option (the “Option”) to purchase shares of its common stock, par value $0.001 (the “Stock”), to the individual named below as Grantee.  The terms and conditions of the Option are set forth in this cover sheet and in the attachment (collectively, the “Agreement”) and in the Company’s 2015 Omnibus Incentive Plan (as it may be amended from time to time, the “Plan”).

 

	
Grant Date:
    	
 
    	
 
    


 

	
Name of Grantee:
    	
 
    	
 
    


 

Number of Shares of Stock Covered by Option:                                        

 

Option Price per Share of Stock:  U.S. $     .    [NOTE:  To be at least 100% of Fair Market Value on Grant Date (Must be 110% of Fair Market Value for 10% stockholders)]

 

	
Vesting Start Date:
    	
 
    	
 
    


 

Vesting Schedule:  Your right to purchase shares of Stock under this Option vests as to one-fourth (1/4) of the total number of shares of Stock covered by this Option, on the one (1) year anniversary of the Vesting Start Date (“Anniversary Date”), provided you then continue in Service.  Thereafter, on each monthly anniversary of the Anniversary Date that you remain in Service, the number of shares of Stock as to which you acquire the right to purchase shall vest at the rate of one-thirty sixth (1/36) of the number of unvested shares covered by this Option remaining after the vesting on the Anniversary Date.

 

Expiration Date:  The tenth (10th) anniversary of the Grant Date, with such exceptions as set forth in this Agreement.(1)

 

By signing this cover sheet, you agree to all of the terms and conditions described in this Agreement and in the Plan, a copy of which is also attached.  You acknowledge that you have carefully reviewed the Plan and agree that the Plan will control in the event any provision of this Agreement should appear to be inconsistent with the Plan.  Certain capitalized terms used in this Agreement are defined in the Plan and have the meaning set forth in the Plan.

 

 

	
Grantee:
    	
 
    	
 
    
	
 
    	
(Signature)
    	
 
    
	
 
    	
 
    	
 
    
	
Company:
    	
 
    	
 
    
	
 
    	
(Signature)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
				


 

Attachment

 

This is not a stock certificate or a negotiable instrument.

 




(1)  Fifth (5th) anniversary of the Grant Date for Grantees who are Ten Percent Stockholders.

 











 

NEXTCURE, INC.

2015 OMNIBUS INCENTIVE PLAN

 

[INCENTIVE][NONQUALIFIED] STOCK OPTION AGREEMENT

 

	
[Incentive]
    [Nonqualified] Stock Option
    	
 
    	
This Option is [not] intended to be an incentive   stock option under Section 422 of the Code and will be interpreted   accordingly. [If you cease to be an employee of the Company, its parent or a   subsidiary (“Employee”) but continue to   provide Service, this option will be deemed a Nonqualified Stock Option three   (3) months after you cease to be an Employee. In addition, to the extent   that all or part of this Option exceeds the one hundred thousand dollar   ($100,000) rule of Section 422(d) of the Code, this Option or   the lesser excess part will be deemed to be a Nonqualified Stock Option.]
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
This Option is only exercisable before it expires   and then only with respect to the vested portion of the Option. This Option   shall vest in accordance with the vesting schedule set forth on the cover   sheet of this agreement; provided, however, that for purposes of vesting,   fractional numbers of shares of Stock shall be rounded to the nearest whole   number, and you cannot vest in more than the number of shares covered by this   Option. Subject to the preceding sentence, you may exercise this Option, in   whole or in part, to purchase a whole number of vested shares of not less   than one hundred (100) shares, unless the number of shares purchased is the   total number available for purchase under the Option, by following the   procedures set forth in the Plan and below in this Agreement.


   Except as otherwise provided in this Agreement, no additional shares of Stock   will vest after your Service has terminated for any reason.
    
	
 
    	
 
    	
 
    
	
Term
    	
 
    	
Notwithstanding anything in this Agreement to the   contrary, the Option shall expire and you shall immediately and automatically   forfeit the Option to the Company in any event at the close of business at   Company headquarters on the Expiration Date, as shown on the cover sheet.   Your Option will expire earlier (but never later) if your Service terminates,   as described below.
    
	
 
    	
 
    	
 
    
	
Regular Termination
    	
 
    	
If your Service terminates for any reason, other   than death, Disability or Cause, then your Option will expire at the close of   business at Company headquarters on the ninetieth (90th) day after your termination   date.
    
	
 
    	
 
    	
 
    
	
Termination for
   Cause
    	
 
    	
If your Service is terminated for Cause, then you   shall immediately forfeit all rights to your Option (including to any vested   shares of
    


 

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Stock) and the Option shall immediately expire.
    
	
 
    	
 
    	
 
    
	
Termination due to Death or Disability
    	
 
    	
If your Service is terminated due to your death or   Disability, then upon termination you will be automatically credited with an   additional twelve (12) months Service for vesting purposes.
    
	
 
    	
 
    	
 
    
	
Death
    	
 
    	
If your Service terminates because of your death,   then your Option will expire at the close of business at Company headquarters   on the date twelve (12) months after the date of death. During that twelve   (12) month period, your estate or heirs may exercise the vested portion of   your Option.


   In addition, if you die during the ninety (90) day period described in connection   with a regular termination (i.e., a termination of your Service not on   account of your death, Disability or Cause), and a vested portion of your   Option has not yet been exercised, then your Option will instead expire on   the date twelve (12) months after your termination date. In such a case,   during the period following your death up to the date twelve (12) months   after your termination date, your estate or heirs may exercise the vested   portion of your Option.
    
	
 
    	
 
    	
 
    
	
Disability
    	
 
    	
If your Service terminates because of your   Disability, then your Option will expire at the close of business at Company   headquarters on the date twelve (12) months after your termination date.   During that twelve (12) month period, you may exercise the vested portion of   your Option.
    
	
 
    	
 
    	
 
    
	
Leaves of Absence
    	
 
    	
For purposes of this Option, your Service does not   terminate when you go on a bona fide   employee leave of absence that was approved by the Company in writing, if the   terms of the leave provide for continued Service crediting, or when continued   Service crediting is required by applicable law. However, in all other cases,   your Service will be treated as terminating ninety (90) days after you went   on employee leave, unless your right to return to active work is guaranteed   by law or by a contract. Your Service terminates in any event when the   approved leave ends unless you immediately return to active employee work.


   The Company determines, in its sole discretion, which leaves count for this   purpose, and when your Service terminates for all purposes under the Plan.
    
	
 
    	
 
    	
 
    
	
Notice of Exercise
    	
 
    	
When you wish to exercise this Option, you must   notify the Company by filing the proper “Notice of Exercise” form at the   address given on the form. Your notice must specify how many shares you wish   to purchase. Your notice must also specify how your shares of Stock should be   registered (in your name only or in
    


 

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your and your spouse’s names as joint tenants with   right of survivorship). The notice will be effective when it is received by   the Company.


   If someone else wants to exercise this Option after your death, that person   must prove to the Company’s satisfaction that he or she is entitled to do so.
    
	
 
    	
 
    	
 
    
	
Form of Payment
    	
 
    	
When you submit your notice of exercise, you must   include payment of the option price for the shares you are purchasing. Payment   may be made in cash or check payable to the order of the Company.
    
	
 
    	
 
    	
 
    
	
Withholding Taxes
    	
 
    	
You agree as a condition of this Agreement that you   will make acceptable arrangements to pay any withholding or other taxes that   may be due relating to the exercise of this Option, the sale of shares of   Stock acquired under this Option, or as otherwise arising under this Option.   In the event that the Company or any Affiliate determines that any federal,   state, local, or foreign tax or withholding payment is required relating to   the exercise of this Option, the sale of shares of Stock acquired under this   Option, or as otherwise arising under this Option, the Company or any   Affiliate shall have the right to (i) require you to tender a cash   payment, (ii) deduct from payments of any kind otherwise due to you, or   (iii) withhold the delivery of vested shares of Stock otherwise   deliverable under this Agreement to meet such obligations.


   The shares of Stock so withheld will have an aggregate Fair Market Value not   exceeding the minimum amount of tax required to be withheld by applicable   laws; provided, however, if the Company has adopted Accounting Standards   Update 2016-09 (“AS 2016-09”)   or AS 2016-09 or a similar rule is otherwise in effect, the Board has   full discretion to choose, or to allow you to elect, to withhold a number of   shares of Stock having an aggregate Fair Market Value that is greater than   the applicable minimum required statutory withholding obligation (but such   withholding may in no event be in excess of the maximum statutory withholding   amount(s) in your relevant tax jurisdictions).


   You agree that the Company or any Affiliate shall be entitled to use whatever   method it may deem appropriate to recover such taxes. You further agree that   the Company or any Affiliate may, as it reasonably considers necessary, amend   or vary this Agreement to facilitate such recovery of taxes.
    
	
 
    	
 
    	
 
    
	
Transfer of Option
    	
 
    	
During your lifetime, only you (or, in the event of   your legal incapacity or incompetency, your guardian or legal representative)
    


 

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may exercise the Option. You cannot transfer or   assign this Option. For instance, you may not sell this Option or use it as   security for a loan. If you attempt to do any of these things, this Option   will immediately become invalid. You may, however, dispose of this Option in   your will or it may be transferred upon your death by the laws of descent and   distribution.


   Regardless of any marital property settlement agreement, the Company is not   obligated to honor a notice of exercise from your spouse, nor is the Company   obligated to recognize your spouse’s interest in your Option in any other   way.
    
	
 
    	
 
    	
 
    
	
Repurchase Option
    	
 
    	
Following termination of your Service for any   reason, the Company shall have ninety (90) days from the date of termination   to exercise an option to purchase all of those shares of Stock that you have   acquired under this Agreement. If the Company exercises its right to purchase   the shares, the Company will notify you of its intention to purchase such   shares, and will consummate the purchase within one (1) year (or ninety   (90) days to the extent required by applicable law) of your termination of   Service. The purchase price shall be the Fair Market Value of the shares on   the date of your termination of Service.
    
	
 
    	
 
    	
 
    
	
Market Stand-off Agreement
    	
 
    	
In connection with any underwritten public offering   by the Company of any class of its equity securities pursuant to an effective   registration statement filed under the Securities Act of 1933 (“Securities Act”), including the Company’s initial public   offering, you agree not to sell, make any short sale of, loan, hypothecate,   pledge, grant any option for the purchase of, or otherwise dispose or   transfer for value or agree to engage in any of the foregoing transactions   with respect to any shares of Stock without the prior written consent of the   Company or its underwriters, for such period of time after the effective date   of such registration statement as may be reasonably requested by the Company   or the underwriters. You further agree to execute such agreements as may be   reasonably requested by the Company or its underwriters that are consistent   with the foregoing or that are necessary to give further effect thereto.
    
	
 
    	
 
    	
 
    
	
Investment Representation
    	
 
    	
If the sale of Stock under the Plan is not   registered under the Securities Act, but an exemption is available which   requires an investment or other representation, you shall represent and agree   at the time of exercise that the Stock being acquired upon exercise of this   Option is being acquired for investment, and not with a view to the sale or   distribution thereof, and shall make such other representations as are deemed   necessary or appropriate by the Company and its counsel.
    


 

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Retention Rights
    	
 
    	
Neither your Option nor this Agreement gives you the   right to be retained or employed by the Company (or any of its Subsidiaries)   in any capacity. The Company (and any Subsidiary) reserves the right to   terminate your Service at any time and for any reason.
    
	
 
    	
 
    	
 
    
	
Stockholder Rights
    	
 
    	
You, or your estate or heirs, have no rights as a   stockholder of the Company until a certificate for your Option’s shares has   been issued (or an appropriate book entry has been made). No adjustments are   made for dividends or other rights if the applicable record date occurs   before your stock certificate is issued (or an appropriate book entry has   been made).
    
	
 
    	
 
    	
 
    
	
Forfeiture of Rights
    	
 
    	
If you should take actions in competition with the   Company, the Company shall have the right in its sole discretion (i) to   cause a forfeiture of any of your outstanding options, and (ii) to   repurchase any shares of Stock you have acquired under this Agreement at a   repurchase price equal to the lesser of (i) the Fair Market Value of the   Stock on the date of your exercise of the underlying option and (ii) the   aggregate option price per share of Stock (as set forth on the cover sheet).   Any such repurchase shall be consummated within one (1) year (or such   lesser period of time as required by applicable law) of the Company’s notice   that it intends to exercise its right of repurchase.


   Unless otherwise specified in an employment or other agreement between the   Company or any of its Subsidiaries and you, you take actions in competition   with the Company or any of its Subsidiaries if you directly or indirectly,   own, manage, operate, join or control, or participate in the ownership,   management, operation or control of, or are a proprietor, director, officer,   stockholder, member, partner or an employee or agent of, or a consultant to   any business, firm, corporation, partnership or other entity which competes   with any business in which the Company or any of its Subsidiaries is engaged during   your employment or other relationship with the Company or its Subsidiaries or   at the time of your termination of Service.


   If it is ever determined by the Board of Directors that your actions have   constituted wrongdoing that contributed to any material misstatement or   omission from any report or statement filed by the Company with the U.S.   Securities and Exchange Commission, gross misconduct, breach of fiduciary   duty to the Company, or fraud, then the Option shall be immediately   forfeited; provided, however, that if the Option was exercised within two   (2) years prior to the Board of Directors’ determination, you shall be   required to pay to the Company an amount equal to the aggregate value of the   shares acquired upon such exercise at the date of the Board of Directors 
    


 

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determination.
    
	
 
    	
 
    	
 
    
	
Right of First Refusal on Transfers of Stock
    	
 
    	
In the event that you propose to sell, pledge or   otherwise transfer (a “Transfer”) to   a third party any Stock acquired upon the exercise of this Option, or any   interest in such Stock, you must deliver written notice (the “Transfer Notice”) to the Company no later than forty-five   (45) days prior to the consummation of such proposed Transfer. The Transfer   Notice shall contain the material terms and conditions (including price and   form of consideration) of the proposed Transfer, the identity of the proposed   transferee and the intended date of the proposed Transfer.


   In connection with any proposed Transfer, you unconditionally and irrevocably   grant to the Company the right, but not the obligation, to purchase some or   all of the Stock subject to such proposed Transfer on the terms and   conditions set forth in the Transfer Notice you provide to the Company. If the   Company exercises its right to purchase the Stock, the Company will notify   you (the “Company Notice”) of its   intention to purchase such Stock within thirty (30) days of receipt of the   Transfer Notice and will consummate the purchase within sixty (60) days of   receipt of the Transfer Notice. If the consideration proposed to be paid for   the Stock, as set forth in the Transfer Notice, is in property, services or   other non-cash consideration, the fair market value of the consideration   shall be as determined in good faith by the Board of Directors and as set   forth in the Company Notice. If the Company cannot for any reason pay for the   Stock in the same form of non-cash consideration, the Company may pay the   cash value equivalent thereof, as determined in good faith by the Board of   Directors and as set forth in the Company Notice.


   Any proposed Transfer not made in compliance with the requirements of this   section shall be null and void ab initio, shall not be recorded on the books   of the Company or its transfer agent and shall not be recognized by the   Company.


   The Company’s rights of first refusal pursuant to this section shall   terminate in the event that the Stock is listed on an established national or   regional stock exchange, is admitted for quotation on The Nasdaq Stock   Market, Inc., or is publicly traded in an established securities market.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
In the event of a stock split, reverse stock split,   stock dividend, recapitalization, combination or reclassification of shares,   spin-off, or other similar change in capitalization or event, the number of   shares covered by this Option and the option price per share shall be   adjusted pursuant to the Plan. Your Option shall be subject to the
    


 

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terms of the agreement of merger, liquidation or   reorganization in the event the Company is subject to such corporate   activity.
    
	
 
    	
 
    	
 
    
	
Legends
    	
 
    	
All certificates representing the Stock issued upon   exercise of this Option shall, where applicable, have endorsed thereon the   following legends:


   “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN   RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET FORTH IN AN   AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR HIS OR HER PREDECESSOR   IN INTEREST. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF   THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE SECRETARY OF   THE COMPANY BY THE HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS   CERTIFICATE.”


   “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER   THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY SECURITIES LAWS OF ANY STATE   OR OTHER JURISDICTION, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE   TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION OR QUALIFICATION THEREOF UNDER   SUCH ACT AND SUCH APPLICABLE STATE OR OTHER JURISDICTION’S SECURITIES LAWS OR   AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH   REGISTRATION AND QUALIFICATION IS NOT REQUIRED.”
    
	
 
    	
 
    	
 
    
	
Applicable Law
    	
 
    	
This Agreement will be interpreted and enforced   under the laws of Delaware other than any conflicts or choice of law   rule or principle that might otherwise refer construction or   interpretation of this Agreement to the substantive law of another jurisdiction.
    
	
 
    	
 
    	
 
    
	
The Plan
    	
 
    	
The text of the Plan is incorporated in this   Agreement by reference.


   This Agreement and the Plan constitute the entire understanding between you   and the Company regarding this grant of options. Any prior agreements,   commitments or negotiations concerning this grant are superseded.
    


 

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Data Privacy
    	
 
    	
In order to administer the Plan, the Company may   process personal data about you. Such data includes, but is not limited to   the information provided in this Agreement and any changes thereto, other   appropriate personal and financial data about you such as home address and   business addresses and other contact information, payroll information and any   other information that might be deemed appropriate by the Company to   facilitate the administration of the Plan.


   By accepting this Option, you give explicit consent to the Company to process   any such personal data. You also give explicit consent to the Company to   transfer any such personal data outside the country in which you work or are   employed, including, with respect to non-U.S. resident grantees, to the   United States, to transferees who shall include the Company and other persons   who are designated by the Company to administer the Plan.
    
	
 
    	
 
    	
 
    
	
Consent to Electronic Delivery
    	
 
    	
By accepting the Option, you consent to receive   documents related to the Option by electronic delivery (including e-mail or   reference to a website or other URL) and, if requested, agree to participate   in the Plan through an on-line or electronic system established and   maintained by the Company or another third party designated by the Company,   and your consent shall remain in effect throughout your term of Service and   thereafter until you withdraw such consent in writing to the Company.
    
	
 
    	
 
    	
 
    
	
Other Agreements
    	
 
    	
You agree, as a condition of the grant of this   Option, that in connection with the exercise of the Option, if and as   requested by the Company, (i) you will execute and become a party to the   Company’s Voting Agreement, dated as of December 29, 2015 as it may be   amended from time to time, as a “Key Holder” thereunder, and to the Company’s   Right of First Refusal and Co-Sale Agreement, dated as of December 29,   2015 as it may be amended from time to time, as a “Key Holder” thereunder,   and (ii) you will execute such other document(s) as necessary to   become a party to any stockholder agreements or voting trusts as the Company   may require.
    
	
 
    	
 
    	
 
    
	
[Certain Dispositions
    	
 
    	
If you sell or otherwise dispose of Stock acquired pursuant   to the exercise of this Option following termination of the Company’s Right   of First Refusal and sooner than the one (1) year anniversary of the   date you acquired the Stock, then you agree to notify the Company in writing   of the date of sale or disposition, the number of share of Stock sold or   disposed of and the sale price per share within thirty (30) days of such sale   or disposition.]
    
	
 
    	
 
    	
 
    
	
Code Section 409A
    	
 
    	
It is intended that this award comply with   Section 409A of the Code 
    


 

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(“Section 409A”)   or an exemption to Section 409A. To the extent that the Company   determines that the Grantee would be subject to the additional twenty percent   (20%) tax imposed on certain nonqualified deferred compensation plans   pursuant to Section 409A as a result of any provision of this Agreement,   such provision shall be deemed amended to the minimum extent necessary to   avoid application of such additional tax. The nature of any such amendment shall   be determined by the Company.
    
	
 
    	
 
    	
 
    
	
Severability
    	
 
    	
If any provision of this Agreement is held invalid   or unenforceable by any court of competent jurisdiction, the other provisions   of this Agreement will remain in full force and effect. Any provision of this   Agreement held invalid or unenforceable only in part or degree will remain in   full force and effect to the extent not held invalid or unenforceable.
    


 

By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.

 

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