Document:

Exhibit 10.3

 

BG Medicine, Inc.

 

NON-QUALIFIED STOCK OPTION AGREEMENT

 

BG
Medicine, Inc. (the “Company”) hereby grants the following stock
option pursuant to its 2001 Stock Option and Incentive Plan, as amended. The
terms and conditions attached hereto are also apart hereof.

 

	
  Name of
  Participant (the “Participant”):

  	
   

  	
  [Name]

  
	
   

  	
   

  	
   

  
	
  Date of this
  option grant (“Grant Date”):

  	
   

  	
  [Grant
  Date]

  
	
   

  	
   

  	
   

  
	
  Number of shares
  of the Company’s Common Stock subject to this option (“Option Shares”):

  	
   

  	
  [Number
  of shares]

  
	
   

  	
   

  	
   

  
	
  Option exercise
  price per share:

  	
   

  	
  [Exercise
  price]

  
	
   

  	
   

  	
   

  
	
  Option
  termination date:

  	
   

  	
  [10]
  years from Grant Date

  
	
   

  	
   

  	
   

  
	
  Number of Option
  Shares subject to Vesting Schedule (“Unvested Option Shares”):

  	
   

  	
  [Number
  of shares - same as above 

  unless some shares vested when 

  granted]

  
	
   

  	
   

  	
   

  
	
  Vesting Start
  Date:

  	
   

  	
  [May or
  may not be Grant Date]

  

 

Vesting
Schedule:

 

	
  The last day of each successive three month period following the
  Vesting Start Date:

  	
   

  	
  6.25% of Unvested Option Shares until the forth
  anniversary of the Vesting Start Date

  

 

[unless
other vesting schedule approved by Board of Directors at time of grant.]

 

 

	
   

  	
  BG Medicine, Inc.

  
	
   

  	
   

  	
   

  
	
  Signature of
  Employee

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Pieter Muntendam,
  M.D.

  	
   

  
	
   

  	
   

  	
   

  	
  President

  
	
  Street Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  City/State/Zip
  Code

  	
   

  
	
   

  	
   

  

 

 

BG Medicine, Inc.

 

NON-QUALIFIED STOCK OPTION AGREEMENT — INCORPORATED
TERMS AND CONDITIONS

 

1.                                       Grant
Under Plan. This option is granted pursuant to and is governed by the
Company’s 2001 Stock Option and Incentive Plan, as amended (the “Plan”)
and, unless the context otherwise requires, terms used herein shall have the
same meaning as in the Plan.

 

2.                                       Grant
as Non-Qualified Stock Option. This option is a nonstatutory stock option
and is not intended to qualify as an incentive stock option under Section 422
of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the “Code”).

 

3.                                       Vesting
of Option if Business Relationship Continues. The Participant may exercise
this option on or after the Grant Date for the number of vested shares of
Common Stock, if any, indicated on the cover page hereof. If the
Participant has continuously maintained a business relationship with the
Company from the Grant Date through the dates listed on the vesting schedule set
forth on the cover page hereof, the Participant may exercise this option
for the additional number of shares of Common Stock in accordance with such
vesting schedule. Notwithstanding the foregoing, the Board may, in its
discretion, accelerate the date that any installment of this option becomes
exercisable. The foregoing rights are cumulative and (subject to Sections 4 or
5 hereof if the Participant ceases to maintain a business relationship with the
Company) may be exercised only before the date which is [10]
years from the Grant Date. For purposes hereof, “business relationship”
means service in the capacity of an employee, officer or director of, or
consultant or advisor to, the Company or any Subsidiary.

 

4.                                       Termination
of Business Relationship.

 

(a)                                  Termination
Other Than for Cause. If the Participant ceases to maintain a business
relationship with the Company, other than by reason of death or disability as
defined in Section 5 or termination for Cause as defined in Section 4(c),
no further installments of this option shall become exercisable, and this
option may no longer be exercised after the passage of 90 days after such
cessation, but in no event later than the scheduled expiration date. For
purposes hereof, a Participant’s business relationship shall not be considered
as having terminated during any  leave of
absence if such leave of absence has been approved in writing by the Company
and if such written approval contractually obligates the Company to continue
the business relationship of the Participant after the approved period of
absence; in the event of such an approved leave of absence, vesting of this
option shall be suspended (and the period of the leave of absence shall be
added to all vesting dates) unless otherwise provided in the Company’s written
approval of the leave of absence. For purposes hereof, a business relationship
shall include a consulting arrangement between the Participant and the Company
that immediately follows termination of the Participant’s employment, but only
if so stated in a written consulting agreement executed by the Company that
specifically refers to this option.

 

 

(b)                                 Termination
for Cause. If the Participant ceases to maintain a business relationship
with the Company by reason of his or her termination for Cause (as defined in Section 4(c)),
this option shall no longer be exercisable from and after the Participant’s
receipt of written notice of such termination.

 

(c)                                  Definition
of Cause. “Cause” shall mean conduct involving one or more of the
following: (i) the substantial and continuing failure of the Participant,
after notice thereof, to render services to the Company in accordance with the
terms or requirements of his or her business relationship; (ii) disloyalty,
gross negligence, willful misconduct, dishonesty, fraud or breach of fiduciary
duty to the Company;  (iii) deliberate
disregard of the rules or policies of the Company, or breach of an
employment or other agreement with the Company, which results in direct or
indirect loss, damage or injury to the Company; (iv) the unauthorized
disclosure of any trade secret or confidential information of the Company; or (v) the
commission of an act which constitutes unfair competition with the Company or
which induces any customer or supplier to breach a contract with the Company.

 

5.                                       Death;
Disability.

 

(a)                                  Death.
If the Participant dies while he or she is maintaining a business relationship
with the Company, this option may be exercised, to the extent otherwise
exercisable on the date of his or her death, by the Participant’s estate,
personal representative or beneficiary to whom this option has been transferred
pursuant to Section 10, only at any time within 180 days after the
date of death, but not later than the scheduled expiration date.

 

(b)                                 Disability.
If the Participant ceases to maintain a business relationship with the Company
by reason of his or her disability, this option may be exercised, to the extent
otherwise exercisable on the date of such cessation, only at any time within
180 days after such cessation, but not later than the scheduled expiration
date. For purposes hereof, “disability” means “permanent and total
disability” as defined in Section 22(e)(3) of the Code.

 

6.                                       Partial
Exercise. This option may be exercised in part at any time and from time to
time within the above limits, except that this option may not be exercised for
a fraction of a share.

 

7.                                       Payment
of Exercise Price.

 

(a)           Payment
Options. The exercise price shall be paid by one or any combination of the
following forms of payment that are applicable to this option, as indicated on
the cover page hereof:

 

(i)                                     by
check payable to the order of the Company; or

 

2

 

(ii)                                  if
the Common Stock is then traded on a national securities exchange or on the
Nasdaq National Market (or successor trading system), delivery of an
irrevocable and unconditional undertaking, satisfactory in form and substance
to the Company, by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or delivery by the Participant to
the Company of a copy of irrevocable and unconditional instructions,
satisfactory in form and substance to the Company, to a creditworthy broker to
deliver promptly to the Company cash or a check sufficient to pay the exercise
price; or

 

(iii)                               subject to Section 7(b) below,
if the Common Stock is then traded on a national securities exchange or on the
Nasdaq National Market (or successor trading system), by delivery of shares of
Common Stock having a fair market value equal as of the date of exercise to the
option price.

 

In the case of (iii) above, fair market value as
of the date of exercise shall be determined as of the last business day for
which such prices or quotes are available prior to the date of exercise and
shall mean (i) the last reported sale price (on that date) of the Common
Stock on the principal national securities exchange on which the Common Stock
is traded, if the Common Stock is then traded on a national securities
exchange; or (ii) the last reported sale price (on that date) of the
Common Stock on the Nasdaq National Market (or successor trading system), if
the Common Stock is not then traded on a national securities exchange.

 

(b)                                 Limitations
on Payment by Delivery of Common Stock. If Section 7(a)(iii) is
applicable, and if the Participant delivers Common Stock held by the
Participant (“Old Stock”) to the Company in full or partial payment of
the exercise price and the Old Stock so delivered is subject to restrictions or
limitations imposed by agreement between the Participant and the Company, an
equivalent number of Option Shares shall be subject to all restrictions and
limitations applicable to the Old Stock to the extent that the Participant paid
for the Option Shares by delivery of Old Stock, in addition to any restrictions
or limitations imposed by this Agreement. Notwithstanding the foregoing, the
Participant may not pay any part of the exercise price hereof by transferring
Common Stock to the Company unless such Common Stock has been owned by the
Participant free of any substantial risk of forfeiture for at least
six months.

 

8.                                       Securities
Laws Restrictions on Resale. Until registered under the Securities Act of
1933, as amended, or any successor statute (the “Securities Act”), the
Option Shares will be of an illiquid nature and will be deemed to be “restricted
securities” for purposes of the Securities Act. Accordingly, such shares
must be sold in compliance with the registration requirements of the Securities
Act or an exemption therefrom. Unless the Option Shares have been registered
under the Securities Act, each certificate evidencing any of the Option Shares
shall bear a legend substantially as follows:

 

3

 

“The
shares represented by this certificate are subject to restrictions on transfer and
may not be sold, exchanged, transferred, pledged, hypothecated or otherwise
disposed of except in accordance with and subject to all the terms and
conditions of a certain Non-Qualified Stock Option Agreement, a copy of which
the Company will furnish to the holder of this certificate upon request and
without charge.”

 

9.                                       Method
of Exercising Option. Subject to the terms and conditions of this
Agreement, this option may be exercised by written notice to the Company at its
principal executive office, or to such transfer agent as the Company shall
designate. Such notice shall state the election to exercise this option and the
number of Option Shares for which it is being exercised and shall be signed by
the person or persons so exercising this option. Such notice shall be
accompanied by payment of the full purchase price of such shares, and the
Company shall deliver a certificate or certificates representing such shares as
soon as practicable after the notice shall be received. Such certificate or
certificates shall be registered in the name of the person or persons so
exercising this option (or, if this option shall be exercised by the
Participant and if the Participant shall so request in the notice exercising
this option, shall be registered in the name of the Participant and another
person jointly, with right of survivorship). In the event this option shall be
exercised, pursuant to Section 5 hereof, by any person or persons other
than the Participant, such notice shall be accompanied by appropriate proof of
the right of such person or persons to exercise this option.

 

10.                                 Option
Not Transferable. This option shall not be sold, assigned, transferred,
pledged or otherwise encumbered by the Participant, either voluntarily or by
operation of law, except by will or by the laws of descent and distribution. During
the Participant’s lifetime only the Participant can exercise this option.

 

11.                                 No
Obligation to Exercise Option. The grant and acceptance of this option
imposes no obligation on the Participant to exercise it.

 

12.                                 No
Obligation to Continue Business Relationship. Neither the Plan, this
Agreement, nor the grant of this option imposes any obligation on the Company
to continue the Participant’s business relationship with the Company.

 

13.                                 Adjustments.
Except as is expressly provided in the Plan with respect to certain changes in
the capitalization of the Company, no adjustment shall be made for dividends or
similar rights for which the record date is prior to such date of exercise.

 

14.                                 Taxes.

 

The
Participant acknowledges that upon exercise of this Option the Participant will
be deemed to have taxable income measured by the difference between the then
fair market value of the shares of Common Stock received upon exercise and the
price paid for such shares of Common Stock pursuant to this Agreement. The
Participant acknowledges that any income or 

 

4

 

other taxes due from him
or her with respect to this Option or the shares of Common Stock issuable
pursuant to this Option shall be the Participant’s responsibility.

 

If the
Company in its discretion determines that it is obligated to withhold any tax
in connection with the exercise of this option, or in connection with the
transfer of, or the lapse of restrictions on, any Common Stock or other
property acquired pursuant to this option, the Participant hereby agrees that
the Company may withhold from the Participant’s wages or other remuneration the
appropriate amount of tax. At the discretion of the Company, the amount
required to be withheld may be withheld in cash from such wages or other
remuneration or in kind from the Common Stock or other property otherwise
deliverable to the Participant on exercise of this option. The Participant
further agrees that, if the Company does not withhold an amount from the
Participant’s wages or other remuneration sufficient to satisfy the withholding
obligation of the Company, the Participant will make reimbursement on demand,
in cash, for the amount underwithheld.

 

15.                                 Restrictions
on Transfer; Company’s Right of First Refusal.

 

(a)                                  Exercise
of Right. Option Shares may not be transferred without the Company’s
written consent except by will, by the laws of descent and distribution or in
accordance with the further provisions of this Section 15. If the
Participant desires to transfer all or any part of the Option Shares to any
person other than the Company (an “Offeror”), the Participant
shall:  (i) obtain in writing an
irrevocable and unconditional bona fide offer
(the “Offer”) for the purchase thereof from the Offeror; and (ii) give
written notice (the “Option Notice”) to the Company setting forth the
Participant’s desire to transfer such shares, which Option Notice shall be
accompanied by a photocopy of the Offer and shall set forth at least the name
and address of the Offeror and the price and terms of the Offer. Upon receipt
of the Option Notice, the Company shall have an assignable option to purchase
any or all of such Option Shares (the “Company Option Shares”) specified
in the Option Notice, such option to be exercisable by giving, within 15 days
after receipt of the Option Notice, a written counter-notice to the Participant.
If the Company elects to purchase any or all of such Company Option Shares, it
shall be obligated to purchase, and the Participant shall be obligated to sell
to the Company, such Company Option Shares at the price and terms indicated in
the Offer within 30 days from the date of delivery by the Company of such
counter-notice.

 

(b)                                 Sale
of Option Shares to Offeror. The Participant may, for 60 days after the
expiration of the 15-day option period as set forth in Section 15(a), sell
to the Offeror, pursuant to the terms of the Offer, any or all of such Company
Option Shares not purchased or agreed to be purchased by the Company or its
assignee; provided, however, that the Participant
shall not sell such Option Shares to such Offeror if such Offeror is a
competitor of the Company and the Company gives written notice to the
Participant, within 15 days of its receipt of the Option Notice, stating that
the Participant shall not sell his or her Option Shares to such Offeror; and provided, further, that prior to the sale of such Option
Shares to an Offeror, such Offeror shall execute an agreement with the Company
pursuant to which such Offeror agrees to be subject to the restrictions set
forth 

 

5

 

in
this Section 15. If any or all of such Option Shares are not sold pursuant
to an Offer within the time permitted above, the unsold Option Shares shall
remain subject to the terms of this Section 15.

 

(c)                                  Failure
to Deliver Option Shares. If the Participant fails or refuses to deliver on
a timely basis duly endorsed certificates representing Company Option Shares to
be sold to the Company or its assignee pursuant to this Section 15, the
Company or its assignee shall have the right to deposit the purchase price for
such Company Option Shares in a special account with any bank or trust company,
giving notice of such deposit to the Participant, whereupon such Company Option
Shares shall be deemed to have been purchased by the Company or its assignee,
as the case may be. All such monies shall be held by the bank or trust company
for the benefit of the Participant. All monies deposited with the bank or trust
company but remaining unclaimed for two years after the date of deposit shall
be repaid by the bank or trust company to the Company on demand, and the
Participant shall thereafter look only to the Company for payment.

 

(d)                                 Transactions
Exempt from the Company’s Right of First Refusal and Transfer Restrictions.
The following transactions shall be exempt from the first refusal rights of the
Company and the transfer restrictions set forth in this Section 15:

 

(i)                                     a
transfer of Option Shares to or for the benefit of any spouse, child,
grandchild, parent, grandparent, sibling, aunt or uncle (each, a “Family Member”)
of the Participant, or to a trust for their benefit;

 

(ii)                                  any
transfer pursuant to an effective registration statement filed by the Company
under the Securities Act;

 

(iii)                               any transfer in
connection with an Acquisition of the Company; and

 

(iv)                              a
transfer of Option Shares to a Family Member pursuant to the laws of descent
and distribution;

 

provided, however, that
in the case of a transfer pursuant to clause (i) or (iv) above, such
transferee shall execute an agreement with the Company pursuant to which such
transferee agrees to be subject to the restrictions set forth in this Section 15,
and provided, further, that without the Company’s written consent subsequent
transfers of such transferred Option Shares, other than by will or by the laws
of descent and distribution, shall be prohibited.

 

(e)                                  Expiration
of Company’s Right of First Refusal and Transfer Restrictions. The first
refusal rights of the Company and the transfer restrictions set forth in this Section 15
shall expire as to Option Shares on the [tenth]
anniversary of the date of this Agreement.

 

16.                                 Lock-up
Agreement. The Participant agrees that in the event that the Company
effects an initial underwritten public offering of Common Stock registered
under the Securities 

 

6

 

Act, the Option Shares
may not be sold, offered for sale or otherwise disposed of, directly or
indirectly, without the prior written consent of the managing underwriter(s) of
the offering, for such period of time after the execution of an underwriting
agreement in connection with such offering that all of the Company’s then
directors and executive officers agree to be similarly bound.

 

17.                                 Arbitration.
Any dispute, controversy, or claim arising out of, in connection with, or
relating to the performance of this Agreement or its termination shall be
settled by arbitration in the Commonwealth of Massachusetts, pursuant to the rules then
obtaining of the American Arbitration Association. Any award shall be final,
binding and conclusive upon the parties and a judgment rendered thereon may be
entered in any court having jurisdiction thereof.

 

18.                                 Provision
of Documentation to Participant. By signing this Agreement the Participant
acknowledges receipt of a copy of this Agreement and a copy of the Plan.

 

19.                                 Miscellaneous.

 

(a)                                  Notices.
All notices hereunder shall be in writing and shall be deemed given when sent
by certified or registered mail, postage prepaid, return receipt requested, if
to the Participant, to the address set forth below or at the address shown on
the records of the Company, and if to the Company, to the Company’s principal
executive offices, attention of the Corporate Secretary.

 

(b)                                 Entire
Agreement; Modification. This Agreement constitutes the entire agreement
between the parties relative to the subject matter hereof, and supersedes all
proposals, written or oral, and all other communications between the parties
relating to the subject matter of this Agreement. This Agreement may be
modified, amended or rescinded only by a written agreement executed by both
parties.

 

(c)                                  Fractional
Shares. If this option becomes exercisable for a fraction of a share because
of the adjustment provisions contained in the Plan, such fraction shall be
rounded down.

 

(d)                                 Issuances
of Securities; Changes in Capital Structure. Except as expressly provided
herein or in the Plan, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares subject to this option. No adjustments need be made
for dividends paid in cash or in property other than securities of the Company.
If there shall be any change in the Common Stock of the Company through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
combination or exchange of shares, liquidation, spin-off, split-up or other
similar change in capitalization or event, the restrictions contained in this
Agreement shall apply with equal force to additional and/or substitute
securities, if any, received by the Participant in exchange for, or by virtue
of his or her ownership of, Option Shares, except as otherwise determined by
the Board.

 

7

 

(e)                                  Severability.
The invalidity, illegality or unenforceability of any provision of this
Agreement shall in no way affect the validity, legality or enforceability of
any other provision.

 

(f)                                    Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, subject to
the limitations set forth in Section 10 hereof.

 

(g)                                 Governing
Law. This Agreement shall be governed by and interpreted in accordance with
the laws of the Commonwealth of Massachusetts, without giving effect to the
principles of the conflicts of laws thereof.

 

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Exhibit 10.8    
    

 
 

BG MEDICINE, INC.
  
    NON-EMPLOYEE DIRECTOR COMPENSATION POLICY    
    

Last
Revised: July [    ], 2007 

The
Board of Directors of BG Medicine, Inc. (the "Company") has approved the following Non-Employee Director Compensation Policy
(this "Policy") which establishes compensation to be paid to non-employee directors of the Company, effective as of the closing of the
Company's initial public offering of common stock (the "Effective Time"), to provide an inducement to obtain and retain the services of qualified
persons to serve as members of the Company's Board of Directors. 

Applicable Persons  

        This Policy shall apply to each director of the Company who is not an employee of, or compensated consultant to, the Company or any Affiliate (each, an
"Outside Director"). "Affiliate" shall mean a corporation which is a direct or indirect parent or subsidiary of the Company, as determined pursuant to
Section 424 of the Internal Revenue Code of 1986, as amended. 

Stock Option Grants  

        All stock option amounts set forth herein shall be subject to automatic adjustment in the event of any stock split or other recapitalization affecting the
Company's common stock. 

 Annual Grants  

        Each Outside Director shall be granted a non-qualified stock option to purchase 15,000 shares of the Company's common stock under the Company's 2007
Employee, Director and Consultant Equity Incentive Plan (the "Stock Plan") each year at the annual meeting of the Board of Directors following the
Company's annual meeting of stockholders; provided that if there has been no annual meeting of stockholders held by the first day of the third fiscal
quarter of the year in which the Effective Time occurs, each Outside Director will still receive any annual grants of non-qualified stock options provided for under this Policy on the
first day of the third fiscal quarter of such year; and provided further, that if an annual meeting of stockholders is subsequently held during the year
in which the Effective Time occurs, no additional annual grant shall be made. 

 Initial Grant For Newly Appointed or Elected Directors  

        Each new Outside Director shall be granted a non-qualified stock option to purchase 30,000 shares of the Company's common stock under the Stock Plan
on the date of his or her initial appointment or election to the Board of Directors. 

 

 Terms for All Option Grants  

        Unless otherwise specified by the Board of Directors or the Compensation Committee at the time of grant, all options granted under this Policy shall
(i) vest one year from the date of the grant, subject to the Outside Director's continued service on the Board of Directors; provided that such options shall become exercisable in full
immediately prior to a change in control of the Company; (ii) have an
exercise price equal to the fair market value of the Company's common stock as determined in the Stock Plan on the date of grant; and (iii) contain such other terms and conditions as the Board
of Directors or the Compensation Committee shall determine. 

Cash Fees  

 Annual Cash Payments  

        Each Outside Director shall receive an annual fee of $20,000 for service on the Board of Directors, and an Outside Director who serves as a chairman of the Board
of Directors shall receive an additional annual fee of $20,000. 

        In
addition, each Outside Director who serves as a member of the Audit, Compensation or Nominating and Governance Committees of the Board of Directors shall receive an annual fee of
$3,000 for each such Committee on which they serve, or $5,000 for serving as the chairman of each such Committee. 

 Per Meeting Fees  

        Each Outside Director shall be paid a fee of $1,500 for each meeting of the Board of Directors that he or she attends in person in excess of six meetings in a
single calendar year. 

 Payment Terms for All Cash Fees  

        Cash payments to be paid to Outside Directors shall be paid quarterly in arrears as of the last day of each fiscal quarter. For any potion of a fiscal year in
which the Effective Time occurs, annual payments shall be pro rated beginning on the first day of the fiscal quarter in which the Effective Time occurs. 

        Following
an Outside Director's first election or appointment to the Board of Directors, such Outside Director shall receive his or her cash compensation pro rated beginning on the first
day of the fiscal quarter in which he or she was initially appointed or elected. If an Outside Director dies, resigns or is removed during any quarter, he or she shall be entitled to a cash payment on
a pro rated basis through his or her last day of service. 

Expenses  

        Upon presentation of documentation of such expenses reasonably satisfactory to the Company, each Outside Director shall be reimbursed for his or her reasonable
out-of-pocket business expenses incurred in connection with attending meetings of the Board of Directors and Committees thereof or in connection with other business related to
the Board of Directors. 

2

 

Amendments  

        The Compensation Committee or the Board of Directors shall review this Policy from time to time to assess whether any amendments in the type and amount of
compensation provided herein should be adjusted in order to fulfill the objectives of this Policy. 

3

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Exhibit 10.8

BG MEDICINE, INC. NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

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