Exhibit 10.3

 



 

Non-Statutory Stock Option Grant

(Non-Plan Inducement Grant)

 

1.                                       Grant of Option

 

AMAG Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby grants to William K. Heiden (the “Recipient”), an option to purchase 300,000 shares of Common Stock, $.01 par value per share, of the Company as hereinafter set forth (the “Option”), as an inducement grant made pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules.  The date of grant of this Option is [Date].

 

For the avoidance of doubt, this Option is not issued under the Company’s Second Amended and Restated 2007 Equity Incentive Plan, as amended from time to time (the “2007 Plan”) and does not reduce the share reserve under the 2007 Plan.  However, for purposes of interpreting the applicable provisions of this Option, the terms and the conditions of the 2007 Plan (other than those applicable to the share reserve) shall govern and apply to this Option as if such Option had actually been issued under the 2007 Plan.  All terms which are defined in the 2007 Plan shall have the same meanings herein.

 

2.                                       Vesting of Option

 

This Option shall be exercisable in cumulative monthly installments on each of the following dates, as follows:

 

	
Date Exercisable
    	
 
    	
Number of Shares Exercisable
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On date of grant
    	
 
    	
- 0 -
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On [First Anniversary]
    	
 
    	
75,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On [Second Anniversary]
    	
 
    	
150,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On [Third Anniversary]
    	
 
    	
225,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On [Fourth Anniversary]
    	
 
    	
300,000
    	
 
    


 

No additional shares shall vest and become exercisable between each of the vesting dates set forth above.

 

3.                                       Term of Option

 

Unless terminated earlier as provided in Section 6 below, this Option shall terminate in ten (10) years on [Date].

 

	
Inducement   Grant Stock Option Agreement
    	
Confidential   Document
    
	
 
    
	
100 Hayden Avenue, Lexington, MA 02421   Tel: (617)   498-3300 Fax: (617) 499-3362
    


 

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4.                                       Exercise Price

 

The exercise price of this Option shall be $[Price] per share.

 

5.                                       Exercise and Payment

 

(a)                                  Method of Payment.    This Option shall be exercisable by delivery to the Company of written notice of exercise, specifying the number of shares for which this Option is being exercised (subject to Section 2 hereof), together with (i) payment to the Company for the total exercise price thereof in cash, by check, (ii) subject to the Company’s approval, by Common Stock of the Company already owned by the Recipient, (iii) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price, (iv) delivery by the Recipient to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price, or (v) by some combination thereof; provided that methods (iii) and (iv) shall only be permissible if the Company’s Common Stock is listed on the Nasdaq Global Select Market or other national securities exchange at such time.

 

(b)                                 Valuation of Shares Tendered in Payment of Purchase Price.    For the purposes hereof, the fair market value of any share of the Company’s Common Stock which may be delivered to the Company in exercise of this Option shall be determined in good faith by the Board of Directors of the Company, or, in the absence of such determination, shall be equal to the closing price of a share of the Company’s Common Stock as reported on the Nasdaq Global Select Market (or other national securities exchange or automated marketplace upon which the Company’s Common Stock is then traded) on the date of exercise of this Option.

 

(c)                                  Delivery of Shares Tendered in Payment of Purchase Price.    If the Company permits the Recipient to exercise Options by delivery of shares of Common Stock of the Company, the certificate or certificates representing the shares of Common Stock of the Company to be delivered shall be duly executed in blank by the Recipient or shall be accompanied by a stock power duly executed in blank suitable for purposes of transferring such shares to the Company.  Fractional shares of Common Stock of the Company will not be accepted in payment of the purchase price of shares acquired upon exercise of this Option.

 

6.                                       Effect of Termination of Employment, Board Membership, or Service Provision or Death

 

This Option shall not be assignable or transferable either voluntarily or by operation of law, except as set forth in this Section 6.  Notwithstanding the foregoing, an Option may be transferred pursuant to a domestic relations order.  Further, notwithstanding the foregoing, the Recipient may, by delivering written notice to the 

 

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Company, in a form provided by or otherwise satisfactory to the Company, designate a third party who, in the event of the death of the Recipient, shall thereafter be the beneficiary of an Option with the right to exercise the Option and receive the Common Stock or other consideration resulting from an Option exercise.

 

In the event the Recipient during his or her lifetime ceases to be an employee, member of the Board of Directors, or other service provider of the Company or of any subsidiary for any reason, other than death or disability, any unexercised portion of this Option which was otherwise exercisable on the date of termination of Recipient’s employment, Board membership or other service, as the case may be, shall expire unless exercised within three months of that date, but in no event after the expiration of the term hereof.

 

In the event of termination of employment, Board membership, or service in any other capacity because of the death or disability of the Recipient (i) while an employee, Board member, or service provider of the Company or any subsidiary, or (ii) during the three-month period following termination of his or her employment, status as a director, or status as a service provider for any reason other than death or disability, this Option shall be exercisable for the number of shares otherwise exercisable on the date of death, disability or termination, by the Recipient or his or her personal representatives, heirs or legatees, as the case may be, at any time prior to the expiration of one year from the date of the death or disability of the Recipient, but in no event after the expiration of the term hereof.

 

Notwithstanding the foregoing, if the Recipient, prior to the termination date of this Option,  (i) violates any provision of any employment agreement or any confidentiality or other agreement between the Recipient and the Company, (ii) commits any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof, (iii) attempts to commit, or participate in, a fraud or act of dishonesty against the Company, or (iv) commits gross misconduct, the right to exercise this Option shall terminate immediately upon written notice to the Recipient from the Company describing such violation or act.

 

7.                                       Employment, Board Membership or Service

 

Nothing contained in this Option shall be construed as giving the Recipient any right to be retained in the employ, board membership, or service of the Company or any of its subsidiaries.

 

8.                                       Withholding Taxes

 

The Recipient acknowledges and agrees that the Company has the right to deduct from payments of any kind otherwise due to the Recipient any federal, state or local taxes of any kind required by law to be withheld with respect to exercise of this Option.

 

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9.                                       2007 Plan Provisions

 

As stated above, this Option is not granted pursuant to the 2007 Plan.  Instead, this Option is granted as an inducement grant pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules.  However, for purposes of interpreting the applicable provisions of this Option, the terms and the conditions of the 2007 Plan (other than those applicable to the share reserve) shall govern and apply to this Option as if such Option had actually been issued under the 2007 Plan.

 

10.                                 Recipient Representation; Stock Certificate Legend

 

If the Recipient is an “affiliate” of the Company (as defined in Rule 144 promulgated under the Securities Act of 1933), all stock certificates representing shares of Common Stock issued to such Recipient pursuant to this Option shall have affixed thereto legends substantially in the following form:

 

“The shares represented by this certificate may be deemed to be held by an “affiliate” as defined by the Securities Act of 1933, as amended (the “Act”) and may not be sold, transferred or assigned unless such sale is pursuant to an effective registration statement under the Act or an opinion of counsel, satisfactory to the corporation, is obtained to the effect that such sale, transfer or assignment is exempt from the registration requirements of the Act.”

 

11.                                 Notice

 

Any notice required to be given under the terms of this Option shall be properly addressed as follows:  to the Company at its principal executive offices, and to the Recipient at his or her address set forth below, or at such other address as either of such parties may hereafter designate in writing to the other.

 

12.                                 Non-Qualified Stock Option

 

It is understood that this Option is not intended to qualify as an “incentive stock option” as defined in Section 422 of the Internal Revenue Code.

 

13.                                 Enforceability

 

This Option shall be binding upon the Recipient, his or her estate, and his or her personal representatives and beneficiaries.

 

14.                                 Effective Date

 

The effective date of this Option is [Date].

 

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, this Option has been executed by a duly authorized officer of the Company as of the effective date.

 

	
 
    	
 
    	
AMAG   Pharmaceuticals, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
  Name:
    
	
 
    	
 
    	
 
    	
  Title:
    
					


 

Recipient’s Acceptance:

 

The undersigned hereby accepts this Option and agrees to the terms and provisions set forth in this Option and in the 2007 Plan (a copy of which has been delivered to him/her).

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Signature   of Recipient)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Print   Name of Recipient)
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    


 

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