Form of Incentive Stock Option Agreement



 Exhibit 10.22 
  
 Achillion Pharmaceuticals, Inc. 
  
 Incentive Stock Option Agreement  
 Granted Under 2006 Stock Incentive Plan 
  
 1. Grant of
Option. 
  
 This agreement evidences the grant by Achillion
Pharmaceuticals, Inc. a Delaware corporation (the “Company”), on [            ], 2006 (the “Grant Date”) to
[            ], an employee of the Company (the “Participant”), of an option to purchase, in whole or in part, on the terms provided herein and in the Company’s
2006 Stock Incentive Plan (the “Plan”), a total of [            ] shares (the “Shares”) of common stock,
[            ] par value per share, of the Company (“Common Stock”) at $[            ] per
Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on [            ] (the “Final Exercise Date”). 
  
 It is intended that the option evidenced by this agreement shall 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 become exercisable (“vest”) as to % 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 anniversary of the Grant 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. 
  
 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. A form of Notice of Stock Option Exercise is attached
to this agreement as Exhibit A. 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 or 








 
officer 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 (or in the case of death by an authorized transferee), 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) Termination for Cause. If, prior to the Final Exercise Date, the Participant’s employment is terminated by
the Company for Cause (as defined below), the right to exercise this option shall terminate immediately upon the effective date of such termination of employment. If the Participant is party to an employment or severance agreement with the Company
that contains a definition of “cause” for termination of employment, “Cause” shall have the meaning ascribed to such term in such agreement. Otherwise, “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.
Tax Matters. 
  
 (a) 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. 
  
 (b) Disqualifying Disposition.
If the Participant disposes of Shares acquired upon exercise of this option within two years from the Grant Date or one year after such Shares were 








 
acquired pursuant to exercise of this option, the Participant shall notify the Company in writing of such disposition. 
  
 5. 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. 
  
 6. 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. 
  
 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.

				
	 Dated:
                    
	 	 	 	 By:
	 	 
					
	 	 	 	 	 	 	 	 	 Name:
                                        
                                       
 

	 	 	 	 	 	 	 	 	 Title:
                                        
                                        
    









 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 2006 Stock Incentive Plan. 
  

			
	 PARTICIPANT:

	
	 
		
	 Address:
	 	 
		
	 	 	 









 Exhibit A 
  
 NOTICE OF STOCK OPTION EXERCISE 
  
 Date:
[                    ] 
  
 Achillion Pharmaceuticals, Inc. 
 300 George Street 
 New Haven, CT 06511 
  
 Attention: Treasurer 
  
 Dear Sir or Madam:

  
 I am the holder of an Incentive Stock Option granted to me
under the Achillion Pharmaceuticals, Inc. (the “Company”) 2006 Stock Incentive Plan on [            ] for the purchase of
[            ] shares of Common Stock of the Company at a purchase price of [$            ] per share. 

 
 I hereby exercise my option to purchase
[            ] shares of Common Stock (the “Shares”), for which I have enclosed [            ]in the
amount of [            ] Please register my stock certificate as follows: 
  

					
	 Name(s):
	 	 	 	 
			
	 	 	 	 	 
			
	 Address:
	 	 	 	 
			
	 Tax I.D. #:
	 	 	 	 

  

			
	
	 Very truly yours,

	
	 
	 (Signature)