Exhibit 10.4

 

	
 
    	
TESARO Inc.
    
	
 
    	
ID: 27-2249687
    
	
 
    	
1000 Winter St.
    
	
 
    	
Suite 3300
    
	
 
    	
Waltham, MA 02451
    


 

Notice of Grant of Stock Options

and Award Agreement

 

Joseph L. Farmer                                                                                                                                                                                                                                                   Award Number: TS000567

c/o TESARO, Inc.

1000 Winter Street, Suite 3300

Waltham, MA 02451

 

Effective March 30, 2015 (the “Grant Date”), you have been granted a Non-Qualified Stock Option to buy 75,000 shares of common stock, par value $0.0001, of TESARO, Inc., a Delaware corporation (the “Company”), at $57.66 per share.

 

The total option price of the shares granted is $4,324,500.

 

Shares in each period will become fully vested on the date shown.

 

	
Shares
    	
 
    	
Vest Type
    	
 
    	
Full Vest
    	
 
    	
Expiration
    
	
18,750
    	
 
    	
On Vest Date
    	
 
    	
March 30, 2016
    	
 
    	
March 30, 2025
    
	
56,250
    	
 
    	
Monthly
    	
 
    	
March 30, 2019
    	
 
    	
March 30, 2025
    


 

By your signature below, you agree that these options are granted under and governed by the terms and conditions of the Non-Qualified Stock Option Inducement Award Agreement, and the separate communication of vesting requirements, which is attached and made a part of this document.

 

	
/s/   Joseph L. Farmer
    	
 
    	
March 30,   2015
    
	
Grantee (signature)
    	
 
    	
Date
    
	
 
    	
 
    	
 
    
	
/s/   Edward C. English
    	
 
    	
March 30,   2015
    
	
Company (signature)
    	
 
    	
Date
    


 











 

TESARO, INC.
 NON-QUALIFIED STOCK OPTION
 INDUCEMENT AWARD AGREEMENT

 

	
Inducement Award
    	
 
    	
This Agreement evidences an inducement award   authorized by the Compensation Committee of the Company’s Board under Listing   Rule 5635(c)(4) of the NASDAQ Global Select Market, granted to you   outside of the TESARO, Inc. 2012 Omnibus Incentive Plan (as it may be   amended from time to time, the “Plan”) as a   material inducement for you to enter into employment with the Company.
    
   Notwithstanding the foregoing, it is intended that all of the terms and   conditions of the Plan that would otherwise have been applicable to the   Option had the Option been granted under the Plan (except as otherwise   expressly provided to the contrary in this Agreement) shall be applicable to   the Option, and accordingly, references to the Plan are made herein for such   purpose and those terms (including capitalized terms not defined herein) are   incorporated herein by reference.
    
	
 
    	
 
    	
 
    
	
Non-Qualified Stock Option
    	
 
    	
This Agreement evidences an award of an Option   exercisable for that number of shares of Stock set forth on the cover sheet   and subject to the terms and conditions set forth in this Agreement. This   Option is not intended to be an incentive stock option under Section 422   of the Code and will be interpreted accordingly.
    
	
 
    	
 
    	
 
    
	
Administration
    	
 
    	
The Committee shall administer the Agreement and   shall have such powers and authorities related to the administration of the   Agreement as set forth in the Plan.
    
   You agree, as a condition of the grant of this Option, to accept as binding,   conclusive, and final all decisions or interpretations of the Committee   concerning any questions arising under this Agreement, or the Plan, with   respect to the Option. No member of the Board or the Committee shall be   liable for any action or determination made in good faith with respect to the   Agreement.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
This Option is only exercisable before it expires   and then only with respect to the vested portion of the Option.
    
   Your right to purchase shares of Stock under this Option vests as set forth   in the Vesting Schedule shown on the cover sheet, provided you continue in   Service on each applicable vesting date. You cannot vest in more than the   number of shares of Stock covered by this Option.
    
   Except as otherwise provided in a written employment or other written   agreement between you and the Company, no additional shares of Stock will   vest after your Service has terminated for any reason.
    


 











 

	
Term
    	
 
    	
Your Option will expire in any event at the close of   business at Company headquarters on the day before the tenth (10th) anniversary of the Grant   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 and automatically forfeit all rights to your Option, and   the Option shall immediately and automatically expire.
    
	
 
    	
 
    	
 
    
	
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 your date of death. During that   twelve-month (12-month) period, your estate or heirs may exercise the vested   portion of your Option.
    
   In addition, if you die during the ninety-day (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.
    
	
 
    	
 
    	
 
    
	
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 Laws. However, 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   Agreement.
    


 











 

	
Notice of Exercise
    	
 
    	
The Option may be exercised, in whole or in part, to   purchase a whole number of vested shares of Stock of not less than one   hundred (100) shares, unless the number of vested shares purchased is the   total number available for purchase under the Option, by following the   procedures set forth in this Agreement and the Plan.
    
   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 your and your spouse’s names as joint tenants with right of   survivorship).
    
   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 aggregate Option Price for the shares you are   purchasing. Payment may be made in one (or a combination) of the following   forms:

·        By   check payable to the order of the Company.

·        To   the extent a public market for the Common Stock exists and to the extent the   Company has established a broker assisted cashless exercise program, by   delivery (on a form prescribed by the Company) of an irrevocable direction to   a licensed securities broker acceptable to the Company to sell Stock and to   deliver all or part of the sale proceeds to the Company in payment of the   aggregate Option Price and any withholding taxes.

·        By   delivery of shares of Stock owned by you valued at Fair Market Value.

·        By   delivery of shares of Stock otherwise issuable to you upon exercise of this   Option, valued at Fair Market Value.
    
	
 
    	
 
    	
 
    
	
Withholding Taxes
    	
 
    	
You will not be allowed to exercise this Option   unless you make acceptable arrangements to pay any withholding or other taxes   that may be due as a result of the Option exercise or sale of Stock acquired   under this Option. In the event that the Company determines that any federal,   state, local, or foreign tax or withholding payment is required relating to   the exercise or sale of shares arising from this Option, the Company shall   have the right to require such payments from you or withhold such amounts   from other payments due to you from the Company or any Subsidiary. You may   elect to satisfy this withholding obligation, in whole or in part, by causing   the Company to withhold shares of Stock otherwise issuable to you or by   delivering to the Company shares of Stock. The shares of Stock so delivered   or withheld must have an aggregate Fair Market Value equal to the withholding   obligation and may not be subject 
    


 











 

	
 
    	
 
    	
to any repurchase, forfeiture, unfulfilled vesting,   or other similar requirements.
    
	
 
    	
 
    	
 
    
	
Delivery of Stock
    	
 
    	
After the exercise of all or part of the Option and   the payment in full of the Option Price with respect thereto, the ownership   of the shares of Stock issued pursuant to this Agreement may be evidenced in   such manner as the Committee, in its sole discretion, deems appropriate,   including by book-entry or direct registration (including transaction   advices) or the issuance of one or more certificates.
    
	
 
    	
 
    	
 
    
	
Transfer of Option
    	
 
    	
During your lifetime, only you (or, in the event of   your legal incapacity or incompetency, your guardian or legal representative)   may exercise the Option. Other than by will or the laws of descent and   distribution, the Option may not be sold, assigned, transferred, pledged,   hypothecated, or otherwise encumbered, whether by operation of law or   otherwise, nor may the Option be made subject to execution, attachment, or   similar process. If you attempt to do any of these things, you will   immediately and automatically forfeit your Option.
    
   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.
    
	
 
    	
 
    	
 
    
	
Retention Rights
    	
 
    	
Neither your Option nor this Agreement give you the   right to be retained or employed by the Company (or any of its Subsidiaries)   in any capacity. The Company and any Subsidiary reserve the right to   terminate your Service at any time and for any reason.
    
	
 
    	
 
    	
 
    
	
Shareholder Rights
    	
 
    	
You, or your estate or heirs, have no rights as a   shareholder of the Company with respect to the shares of Stock covered by the   Option unless and until the shares of Stock underlying the Option have been   issued upon exercise of your Option and a certificate evidencing such shares   of Stock has been issued (or an appropriate book entry has been made). No   adjustments shall be made for dividends, distributions, or other rights if   the applicable record date occurs before your certificate is issued (or an   appropriate book entry has been made), except as set forth in the Plan.
    
	
 
    	
 
    	
 
    
	
Forfeiture of Rights
    	
 
    	
If you should take actions in competition with the   Company, the Company shall have the right to cause a forfeiture of your   rights, including, but not limited to, the right to cause: (i) a   forfeiture of any outstanding Option, and (ii) with respect to the   period commencing twelve (12) months prior to your termination of Service   with the Company, (A) a forfeiture of any gain recognized by you upon   the exercise of an Option or (B) a forfeiture of any Stock acquired by   you upon the exercise of an Option (but the Company will pay you the Option
    


 











 

	
 
    	
 
    	
Price without interest).
    
   Unless otherwise specified in a written employment or other written agreement   between the Company and you, you take actions in competition with the Company   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 Service relationship with the   Company or its Subsidiaries or at the time of your termination of Service.
    
   If it is ever determined by the Board 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’s 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 determination.
    
   This Option is subject to mandatory repayment by you to the Company to the   extent you are or in the future become subject to any Company “clawback” or   recoupment policy or Applicable Laws that require the repayment by you to the   Company of compensation paid by the Company to you in the event that you fail   to comply with, or violate, the terms or requirements of such policy or   Applicable Laws.
    
	
 
    	
 
    	
 
    
	
Effects of Changes in Capitalization
    	
 
    	
Section 17 of the Plan is incorporated herein   by reference and shall apply with respect to this Agreement.
    
	
 
    	
 
    	
 
    
	
Parachute Limitations
    	
 
    	
Section 15 of the Plan is incorporated herein   by reference and shall apply with respect to this Agreement.
    
	
 
    	
 
    	
 
    
	
No Repricing
    	
 
    	
Except in connection with a corporate transaction   involving the Company (including, without limitation, any stock dividend,   distribution (whether in the form of cash, shares of Stock, other securities   or other property), stock split, extraordinary cash dividend,   recapitalization, Change in Control, reorganization, merger, consolidation,   split-up, spin-off, combination, repurchase, or exchange of shares of Stock   or other securities or similar transaction), the Company may not, without   obtaining stockholder approval: (a) amend the terms of the Option to   reduce the Option Price; (b) cancel the Option in exchange for or   substitution of options with an 
    


 











 

	
 
    	
 
    	
Option Price that is less than the Option Price of   the Option; or (c) cancel the Option when the Option Price is above the   Stock’s Fair Market Value in exchange for cash or other securities.
    
	
 
    	
 
    	
 
    
	
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.
    
   Section 16 of the Plan is incorporated herein by reference and shall   apply with respect to this Agreement.
    
	
 
    	
 
    	
 
    
	
Entire Agreement
    	
 
    	
This Agreement and the Plan as incorporated herein   constitute the entire understanding between you and the Company regarding the   Option. Any prior agreements, commitments, or negotiations concerning the   Option are superseded.
    
   The Board may, at any time and from time to time, amend, suspend, or   terminate the Plan. The effectiveness of any amendment to the Plan shall be   contingent on approval of such amendment by the Company’s stockholders to the   extent provided by the Board or required by Applicable Laws (including the   rules of any Stock Exchange on which the Stock is then listed). No   amendment, suspension, or termination of the Plan shall impair your rights   under this Option without your consent.
    
	
 
    	
 
    	
 
    
	
Data Privacy
    	
 
    	
In order to administer this Agreement, 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 this   Agreement.
    
	
 
    	
 
    	
 
    
	
Consent to Electronic Delivery
    	
 
    	
The Company may choose to deliver certain statutory   or other materials relating to this Agreement in electronic form. By   accepting this Agreement, you agree that the Company may deliver the related   prospectus, the Company’s annual report, and other documents or   correspondence, as applicable, to you in an electronic format. If at any 
    


 











 

	
 
    	
 
    	
time you would prefer to receive paper copies of   these documents, as you are entitled to, the Company would be pleased to   provide copies. Please contact the Company’s Secretary to request paper   copies of these documents.
    
	
 
    	
 
    	
 
    
	
Other Agreements
    	
 
    	
You agree, as a condition of the grant of this   Option, that in connection with the exercise of the Option, you will execute   such additional documents and agreements as the Company may require.
    
	
 
    	
 
    	
 
    
	
Code Section 409A
    	
 
    	
It is intended that this award comply with   Section 409A of the Code (“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 any 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.
    
	
 
    	
 
    	
 
    
	
General Provisions
    	
 
    	
Section 18 of the Plan is incorporated herein   by reference and shall apply with respect to this Agreement.
    


 

By signing the cover sheet of this Agreement, you agree to all of the terms and
 conditions described above and otherwise incorporated into this Agreement.