Exhibit 10.3 


 


RLTIP – Second RSU Grant




 





KINIKSA PHARMACEUTICALS,
LTD.

2018 INCENTIVE AWARD PLAN


 


RESTRICTED
SHARE Unit Grant Notice


 


Capitalized terms not
specifically defined in this Restricted Share Unit Grant Notice (the “Grant Notice”) have the meanings
given to them in the 2018 Incentive Award Plan (as amended from time to time, the “Plan”) or the Rilonacept
Long-Term Incentive Plan (as amended from time to time, the “RLTIP”) of Kiniksa Pharmaceuticals, Ltd.
(the “Company”).


 


The Company has granted
to the participant listed below (“Participant”) the Restricted Share Units described in this Grant Notice
(the “RSUs”), subject to the terms and conditions of the Plan, the RLTIP and the Restricted Share Unit
Agreement attached as Exhibit A (the “Agreement”), all of which are incorporated into this Grant
Notice by reference.


 


	Participant:	 
	 	 
	Grant Date1:	 
	 	 
	Number of RSUs2:	 
	 	 
	Vesting Schedule:	Subject to the terms of the Agreement, the RSUs will vest in a single installment on the second anniversary of the Grant Date.


 


By Participant’s
signature below, Participant agrees to be bound by the terms of this Grant Notice, the Plan, the RLTIP and the Agreement. Participant
has reviewed the Plan, the RLTIP, this Grant Notice and the Agreement in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Grant Notice and fully understands all provisions of the Plan, the RLTIP, this Grant Notice
and the Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan, the RLTIP, this Grant Notice or the Agreement.


 


	KINIKSA PHARMACEUTICALS, LTD.	PARTICIPANT



 


	By:	 	 	 
	Name:	 	 	[Participant Name]
	Title:	 	 	 



 





 






	1	FDA Milestone achievement date.
	2	To be determined in accordance with the RLTIP based on
the Target Award Value, the Earnout Percentage and Upside Earnout Percentage, all as determined in accordance with the RLTIP.




 






     


     


    

 


Exhibit A


 


RESTRICTED
Share UNIT AGREEMENT


 


Capitalized terms not
specifically defined in this Agreement have the meanings specified in the Grant Notice or, if not defined in the Grant Notice,
in the Plan or the RLTIP.


 


Article
I.


general


 


1.1               
Award of RSUs and Dividend Equivalents.


 


(a)               
The Company has granted the RSUs to Participant effective as of the grant date set forth in the Grant Notice (the “Grant
Date”). Each RSU represents the right to receive one Share or, at the option of the Company, an amount of cash, in
either case, as set forth in this Agreement. Participant will have no right to the distribution of any Shares or payment of any
cash until the time (if ever) the RSUs have vested.


 


(b)               
The Company hereby grants to Participant, with respect to each RSU, a Dividend Equivalent for ordinary cash dividends paid
to substantially all holders of outstanding Shares with a record date after the Grant Date and prior to the date the applicable
RSU is settled, forfeited or otherwise expires. Each Dividend Equivalent entitles Participant to receive the equivalent value of
any such ordinary cash dividends paid on a single Share. The Company will establish a separate Dividend Equivalent bookkeeping
account (a “Dividend Equivalent Account”) for each Dividend Equivalent and credit the Dividend Equivalent
Account (without interest) on the applicable dividend payment date with the amount of any such cash paid.


 


1.2              
Incorporation of Terms of Plan and RLTIP. The RSUs are subject to the terms and conditions set forth in this Agreement
and the Plan and the RLTIP, which are incorporated herein by reference. In the event of any inconsistency between the Plan or the
RLTIP and this Agreement, the terms of the Plan and the RLTIP will control.


 


1.3              
Unsecured Promise. The RSUs and Dividend Equivalents will at all times prior to settlement represent an unsecured
Company obligation payable only from the Company’s general assets.


 


Article
II.


VESTING; forfeiture AND SETTLEMENT


 


2.1              
Vesting; Forfeiture; Change in Control.


 


(a)               
The RSUs will vest according to the vesting schedule in the Grant Notice except that any fraction of an RSU that would otherwise
be vested will be accumulated and will vest only when a whole RSU has accumulated. In the event of Participant’s termination
of employment with the Company or a Subsidiary for any reason, all unvested RSUs will immediately and automatically be cancelled
and forfeited, except as otherwise determined by the Administrator or provided in a binding written agreement between Participant
and the Company and subject to Section 2.1(b) below. In addition, in the event it is no longer possible for the Company to achieve
the FDA Milestone, all unvested RSUs will immediately and automatically be cancelled and forfeited for no consideration, unless
otherwise determined by the Administrator. Dividend Equivalents (including any Dividend Equivalent Account balance) will vest or
be forfeited, as applicable, upon the vesting or forfeiture of the RSU with respect to which the Dividend Equivalent (including
the Dividend Equivalent Account) relates.


 






     


     


    

 


(b)               
Notwithstanding the foregoing, in the event of a Change in Control, the RSUs will be treated as set forth in Section 6 of
the RLTIP.


 


2.2              
Settlement.


 


(a)               
RSUs and Dividend Equivalents (including any Dividend Equivalent Account balance) will be paid in Shares or cash at the
Company’s option as soon as administratively practicable after the vesting of the applicable RSU, but in no event more than
sixty (60) days after the RSU’s vesting date. Notwithstanding the foregoing, the Company may delay any payment under this
Agreement that the Company reasonably determines would violate Applicable Law until the earliest date the Company reasonably determines
the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)),
provided the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.


 


(b)               
If an RSU is paid in cash, the amount of cash paid with respect to the RSU will equal the Fair Market Value of a Share on
the day immediately preceding the payment date. If a Dividend Equivalent is paid in Shares, the number of Shares paid with respect
to the Dividend Equivalent will equal the quotient, rounded down to the nearest whole Share, of the Dividend Equivalent Account
balance divided by the Fair Market Value of a Share on the day immediately preceding the payment date.


 


Article
III.

TAXATION AND TAX WITHHOLDING


 


3.1              
Representation. Participant represents to the Company that Participant has reviewed with Participant’s own
tax advisors the tax consequences of this Award and the transactions contemplated by the Grant Notice and this Agreement. Participant
is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.


 


3.2              
Tax Withholding.


 


(a)               
Unless the Administrator otherwise determines, the Company will (i) withhold from amounts otherwise payable under the Award
in cash an amount that the Company determines to be necessary to satisfy applicable tax withholding obligations arising as a result
of such cash payment under the Award and (ii) withhold from the Shares otherwise issuable under the Award a number of whole Shares
which have a fair market value on the date of such withholding that the Company determines to be necessary to satisfy applicable
tax withholding obligations arising as a result of such issuance of Shares under the Award.


 


(b)               
Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the
RSUs and the Dividend Equivalents, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding
obligations that arise in connection with the RSUs or Dividend Equivalents, and that, except as set forth in Section 3.2(a), all
such taxes must be satisfied in accordance with Section 9.5 of the Plan. Neither the Company nor any Subsidiary makes any representation
or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the RSUs or
the Dividend Equivalents or the subsequent sale of Shares. The Company and the Subsidiaries do not commit and are under no obligation
to structure the RSUs or Dividend Equivalents to reduce or eliminate Participant’s tax liability.


 






    A-2


     


    

 


Article
IV.


other provisions


 


4.1              
Adjustments. Participant acknowledges that the RSUs, the Shares subject to the RSUs and the Dividend Equivalents
are subject to adjustment, modification and termination in certain events as provided in this Agreement, the RLTIP and the Plan.


 


4.2              
Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed
to the Company in care of the Company’s Secretary at the Company’s principal office or the Secretary’s then-current
email address or facsimile number. Any notice to be given under the terms of this Agreement to Participant must be in writing and
addressed to Participant at Participant’s last known mailing address, email address or facsimile number in the Company’s
personnel files. By a notice given pursuant to this Section, either party may designate a different address for notices to be given
to that party. Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return
receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United
States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission
confirmation.


 


4.3              
Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction
of this Agreement.


 


4.4              
Conformity to Securities Laws. Participant acknowledges that the Plan, the RLTIP, the Grant Notice and this Agreement
are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed
amended as necessary to conform to Applicable Laws.


 


4.5              
Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees,
and this Agreement will inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer
set forth in the Plan, the RLTIP, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives,
successors and assigns of the parties hereto.


 


4.6              
Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the RLTIP or this
Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the RLTIP, the Grant Notice, this Agreement,
the RSUs and the Dividend Equivalents will be subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such
exemptive rule. To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable
exemptive rule.


 


4.7              
Entire Agreement. The Plan, the RLTIP, the Grant Notice and this Agreement (including any exhibit hereto) constitute
the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant
with respect to the subject matter hereof.


 


4.8              
Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid,
the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect
on, the remaining provisions of the Grant Notice or this Agreement.


 






    A-3


     


    

 


4.9               Limitation
on Participant’s Rights. Participation in the Plan and the RLTIP confers no rights or interests other than as
herein provided. This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and
may not be construed as creating a trust. Neither the Plan nor any underlying program, including the RLTIP, in and of
itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to
amounts credited and benefits payable, if any, with respect to the RSUs and Dividend Equivalents, and rights no greater than
the right to receive cash or the Shares as a general unsecured creditor with respect to the RSUs and Dividend Equivalents, as
and when settled pursuant to the terms of this Agreement.


 


4.10          
Not a Contract of Employment. Nothing in the Plan, the RLTIP, the Grant Notice or this Agreement confers upon Participant
any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the
rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services
of Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise
in a written agreement between the Company or a Subsidiary and Participant.


 


4.11          
Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature,
subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.


 


* * * * *


 






    A-4