Document:

nite-ex101_144.htm

 

EXHIBIT 10.1

 

 

 

 

 

 

 

 

	
 

 

NIGHTSTAR THERAPEUTICS PLC

 

 

	
 

 

 

 

 

 

 

	
 

2017 EQUITY INCENTIVE PLAN

 

 

 

Adopted by the Board on 12 September 2017 and approved by Shareholders on 14 September 2017

 

 

 

 

 

 

 

 

Cooley (UK) LLP, Dashwood, 69 Old Broad Street, London EC2M 1QS, UK
T: +44 (0) 20 7583 4055  F: +44 (0) 20 7785 9355 www.cooley.com

 

 

150403203 v6 

 

 

Table of Contents

 

Page

 

 

	
1.
	
 
	
PURPOSE
	
4
	
 

	
 
	
 
	
 
	
 
	
 

	
2.
	
 
	
ELIGIBILITY
	
4
	
 

	
 
	
 
	
 
	
 
	
 

	
3.
	
 
	
ADMINISTRATION AND DELEGATION
	
4
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
3.1
	
 
	
Administration
	
4
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
3.2
	
 
	
Appointment of Committees
	
4
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
4.
	
 
	
SHARES AVAILABLE FOR AWARDS
	
4
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
4.1
	
 
	
Number of Shares
	
4
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
4.2
	
 
	
Share Recycling
	
5
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
4.3
	
 
	
Incentive Option Limitations
	
5
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
4.4
	
 
	
Substitute Awards
	
5
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
5.
	
 
	
OPTIONS AND SHARE APPRECIATION RIGHTS
	
6
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
5.1
	
 
	
General
	
6
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
5.2
	
 
	
Exercise Price
	
6
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
5.3
	
 
	
Duration
	
6
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
5.4
	
 
	
Exercise
	
7
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
5.5
	
 
	
Payment Upon Exercise
	
7
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
6.
	
 
	
RESTRICTED SHARES; RESTRICTED SHARE UNITS
	
8
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
6.1
	
 
	
General
	
8
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
6.2
	
 
	
Restricted Shares.
	
8
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
6.3
	
 
	
Restricted Share Units
	
8
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
7.
	
 
	
OTHER SHARE OR CASH BASED AWARDS
	
9
	
 

	
 
	
 
	
 
	
 
	
 

	
8.
	
 
	
ADJUSTMENTS FOR CHANGES IN SHARES AND CERTAIN OTHER EVENTS
	
9
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
8.1
	
 
	
Equity Restructuring
	
9
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
8.2
	
 
	
Corporate Transactions
	
9
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
8.3
	
 
	
Administrative Stand Still
	
11
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
8.4
	
 
	
General
	
11
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
9.
	
 
	
GENERAL PROVISIONS APPLICABLE TO AWARDS
	
11
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
9.1
	
 
	
Transferability
	
11
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
9.2
	
 
	
Documentation
	
11
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
9.3
	
 
	
Discretion
	
11
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
9.4
	
 
	
Termination of Status
	
12
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
9.5
	
 
	
Withholding
	
12
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
9.6
	
 
	
Amendment of Award; Repricing
	
12
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
9.7
	
 
	
Conditions on Delivery of Shares
	
13
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

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Table of Contents

 

Page

 

	
 
	
 
	
9.8
	
 
	
Acceleration
	
13
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
9.9
	
 
	
Additional Terms of Incentive Options
	
13
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
10.
	
 
	
MISCELLANEOUS
	
14
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.1
	
 
	
No Right to Employment or Other Status
	
14
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.2
	
 
	
No Rights as Shareholder; Certificates
	
14
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.3
	
 
	
Effective Date and Term of Plan
	
14
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.4
	
 
	
Amendment of Plan
	
14
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.5
	
 
	
Provisions for Foreign Participants
	
14
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.6
	
 
	
Section 409A
	
15
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.7
	
 
	
Limitations on Liability
	
16
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.8
	
 
	
Lock-Up Period
	
16
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.9
	
 
	
Data Privacy
	
16
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.10
	
 
	
Severability
	
18
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.11
	
 
	
Governing Documents
	
18
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.12
	
 
	
Governing Law
	
18
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.13
	
 
	
Claw-back Provisions
	
18
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.14
	
 
	
Titles and Headings
	
18
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.15
	
 
	
Conformity to Securities Laws
	
18
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.16
	
 
	
Relationship to Other Benefits
	
18
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
10.17
	
 
	
Broker-Assisted Sales
	
18
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	
11.
	
 
	
DEFINITIONS
	
18
	
 

 

 

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NIGHTSTAR THERAPEUTICS PLC
2017 EQUITY INCENTIVE PLAN

	
1.
	
PURPOSE

The Plan’s purpose is to enhance the Company’s ability to attract, retain and motivate persons who make (or are expected to make) important contributions to the Company by providing these individuals with equity ownership opportunities. Capitalized terms used in the Plan are defined in Section 11.

	
2.
	
ELIGIBILITY

Service Providers are eligible to be granted Awards under the Plan, subject to the limitations described herein.

	
3.
	
ADMINISTRATION AND DELEGATION

	
3.1
	
Administration 

The Plan is administered by the Administrator. The Administrator has authority to determine which Service Providers receive Awards, grant Awards, set Award terms and conditions, and designate whether such Awards will cover Ordinary Shares or ADSs, subject to the conditions and limitations in the Plan. The Administrator also has the authority to take all actions and make all determinations under the Plan, to interpret the Plan and Award Agreements and to adopt, amend and repeal Plan administrative rules, guidelines and practices as it deems advisable. The Administrator may correct defects and ambiguities, supply omissions and reconcile inconsistencies in the Plan or any Award as it deems necessary or appropriate to administer the Plan and any Awards. The Administrator’s determinations under the Plan are in its sole discretion and will be final and binding on all persons having or claiming any interest in the Plan or any Award.

	
3.2
	
Appointment of Committees 

To the extent Applicable Laws permit, the Board may delegate any or all of its powers under the Plan to one or more Committees or officers of the Company or any of its Subsidiaries. The Board may abolish any Committee or re-vest in itself any previously delegated authority at any time.

	
4.
	
SHARES AVAILABLE FOR AWARDS

	
4.1
	
Number of Shares 

Subject to adjustment under Section 8 and the terms of this Section 4, Awards may be made under the Plan (after taking account of Prior Plan Awards and Awards granted under the Non-Employee Sub-Plan) in an amount up to 1,500,000 Shares (the Share Reserve).  In addition, the Share Reserve will automatically increase on January 1st of each year, for a period of not more than ten years, commencing on January 1st of the year following the year in which the NASDAQ Listing Date occurs and ending on (and including) January 1, 2027, in an amount equal to 4% of the total number of Shares outstanding on December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number of Shares than would otherwise occur pursuant to the preceding sentence.

 

	
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4.2
	
Share Recycling.

If all or any part of an Award or Prior Plan Award expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, canceled without having been fully exercised or forfeited, in any case, in a manner that results in the Company acquiring Shares covered by the Award or Prior Plan Award at a price not greater than the price (as adjusted to reflect any Equity Restructuring) paid by the Participant for such Shares or not issuing any Shares covered by the Award or Prior Plan Award, the unused Shares covered by the Award or Prior Plan Award will, as applicable, become or again be available for Award grants under the Plan. Further, Shares delivered (either by actual delivery or attestation) to the Company by a Participant to satisfy the applicable exercise or purchase price of an Award or Prior Plan Award and/or to satisfy any applicable tax withholding obligation (including Shares retained by the Company from the Award or Prior Plan Award being exercised or purchased and/or creating the tax obligation) will, as applicable, become or again be available for Award grants under the Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards or Prior Plan Awards shall not count against the Share Reserve.

	
4.3
	
Incentive Option Limitations. 

Notwithstanding anything to the contrary herein, no more than 2,000,000 Shares may be issued pursuant to the exercise of Incentive Options.

	
4.4
	
Substitute Awards.

In connection with an entity’s merger or consolidation with the Company or the Company’s acquisition of an entity’s property or stock, the Administrator may grant Awards in substitution for any options or other equity or equity-based awards granted before such merger or consolidation by such entity or its affiliate. Substitute Awards may be granted on such terms as the Administrator deems appropriate, notwithstanding limitations on Awards in the Plan. Substitute Awards will not count against the Share Reserve (nor shall Shares subject to a Substitute Award be added to the Shares available for Awards under the Plan as provided above), except that Shares acquired by exercise of substitute Incentive Options will count against the maximum number of Shares that may be issued pursuant to the exercise of Incentive Options under the Plan. Additionally, in the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan (and Shares subject to such Awards shall not be added to the Shares available for Awards under the Plan as provided above); provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Directors prior to such acquisition or combination.

 

	
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5.
	
OPTIONS AND SHARE APPRECIATION RIGHTS

	
5.1
	
General.

The Administrator may grant Options or Share Appreciation Rights to Service Providers subject to the limitations in the Plan, including any limitations in the Plan that apply to Incentive Options. The Administrator will determine the number of Shares covered by each Option and Share Appreciation Right, the exercise price of each Option and Share Appreciation Right and the conditions and limitations applicable to the exercise of each Option and Share Appreciation Right. A Share Appreciation Right will entitle the Participant (or other person entitled to exercise the Share Appreciation Right) to receive from the Company upon exercise of the exercisable portion of the Share Appreciation Right an amount determined by multiplying the excess, if any, of the Fair Market Value of one Share on the date of exercise over the exercise price per Share of the Share Appreciation Right by the number of Shares with respect to which the Share Appreciation Right is exercised, subject to any limitations of the Plan or that the Administrator may impose and payable in cash, Shares valued at Fair Market Value or a combination of the two as the Administrator may determine or provide in the Award Agreement.

	
5.2
	
Exercise Price.

The Administrator will establish each Option’s and Share Appreciation Right’s exercise price and specify the exercise price in the Award Agreement. The exercise price will not be less than 100% of the Fair Market Value on the grant date of the Option or Share Appreciation Right.

	
5.3
	
Duration.

Each Option or Share Appreciation Right will be exercisable at such times and as specified in the Award Agreement, provided that the term of an Option or Share Appreciation Right will not exceed ten years. Notwithstanding the foregoing and unless determined otherwise by the Company, in the event that on the last business day of the term of an Option or Share Appreciation Right (other than an Incentive Option) (i) the exercise of the Option or Share Appreciation Right is prohibited by Applicable Law, as determined by the Company, or (ii) Shares may not be purchased or sold by the applicable Participant due to any Company insider trading policy (including blackout periods) or a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the term of the Option or Share Appreciation Right shall be extended until the date that is thirty (30) days after the end of the legal prohibition, black-out period or lock-up agreement, as determined by the Company; provided, however, in no event shall the extension last beyond the ten year term of the applicable Option or Share Appreciation Right. Notwithstanding the foregoing, if the Participant, prior to the end of the term of an Option or Share Appreciation Right, violates the non-competition, non-solicitation, confidentiality or other similar restrictive covenant provisions of any employment contract, confidentiality and nondisclosure agreement or other agreement between the Participant and the Company or any of its Subsidiaries, the right of the Participant and the Participant’s transferees to exercise any Option or Share Appreciation Right issued to the Participant shall terminate immediately upon such violation, unless the Company otherwise determines. In addition, if, prior to the end of the term of an Option or Share Appreciation Right, the Participant is given notice by the Company or any of its Subsidiaries of the Participant’s Termination of Service by the Company or any of its Subsidiaries for Cause, and the effective 

 

	
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date of such Termination of Service is subsequent to the date of the delivery of such notice, the right of the Participant and the Participant’s transferees to exercise any Option or Share Appreciation Right issued to the Participant shall be suspended from the time of the delivery of such notice until the earlier of (i) such time as it is determined or otherwise agreed that the Participant’s service as a Service Provider will not be terminated for Cause as provided in such notice or (ii) the effective date of the Participant’s Termination of Service by the Company or any of its Subsidiaries for Cause (in which case the right of the Participant and the Participant’s transferees to exercise any Option or Share Appreciation Right issued to the Participant will terminate immediately upon the effective date of such Termination of Service).

	
5.4
	
Exercise.

Options and Share Appreciation Rights may be exercised by delivering to the Company a written notice of exercise, in a form the Administrator approves (which may be electronic), signed by the person authorized to exercise the Option or Share Appreciation Right, together with, as applicable, payment in full (i) as specified in Section 5.5 for the number of Shares for which the Award is exercised and (ii) as specified in Section 9.5 for any applicable taxes. Unless the Administrator otherwise determines, an Option or Share Appreciation Right may not be exercised for a fraction of a Share.

	
5.5
	
Payment Upon Exercise.

Subject to Section 10.8, any Company insider trading policy (including blackout periods) and Applicable Laws, the exercise price of an Option must be paid by:

	
 
	
(a)
	
cash, wire transfer of immediately available funds or by check payable to the order of the Company, provided that the Company may limit the use of one of the foregoing payment forms if one or more of the payment forms below is permitted;

	
 
	
(b)
	
if there is a public market for Shares at the time of exercise, unless the Company otherwise determines, (A) delivery (including telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to pay the exercise price, or (B) the Participant’s delivery to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to pay the exercise price; provided that such amount is paid to the Company at such time as may be required by the Administrator;

	
 
	
(c)
	
to the extent permitted by the Administrator, delivery (either by actual delivery or attestation) of Shares owned by the Participant valued at their Fair Market Value;

	
 
	
(d)
	
to the extent permitted by the Administrator, surrendering Shares then issuable upon the Option’s exercise valued at their Fair Market Value on the exercise date;

	
 
	
(e)
	
to the extent permitted by the Administrator, delivery of a promissory note or any other property that the Administrator determines is good and valuable consideration; or

	
 
	
(f)
	
to the extent permitted by the Company, any combination of the above payment forms approved by the Administrator.

 

	
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6.
	
RESTRICTED SHARES; RESTRICTED SHARE UNITS

	
6.1
	
General.

The Administrator may grant Restricted Shares, or the right to purchase Restricted Shares, to any Service Provider, subject to the Company’s right to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant (or to require forfeiture of such shares) if conditions the Administrator specifies in the Award Agreement are not satisfied before the end of the applicable restriction period or periods that the Administrator establishes for such Award. In addition, the Administrator may grant to Service Providers Restricted Share Units, which may be subject to vesting and forfeiture conditions during the applicable restriction period or periods, as set forth in an Award Agreement. The Administrator will determine and set forth in the Award Agreement the terms and conditions for each Restricted Share and Restricted Share Unit Award, subject to the conditions and limitations contained in the Plan.

	
6.2
	
Restricted Shares.

	
 
	
(a)
	
Dividends. 

Participants holding Restricted Shares will be entitled to all ordinary cash dividends paid with respect to such Shares, unless the Administrator provides otherwise in the Award Agreement. In addition, unless the Administrator provides otherwise, if any dividends or distributions are paid in Shares, or consist of a dividend or distribution to holders of Restricted Shares of property other than an ordinary cash dividend, the Shares or other property will be subject to the same restrictions on transferability and forfeitability as the Restricted Shares with respect to which they were paid.

	
 
	
(b)
	
Certificates. 

The Company may require that the Participant deposit in escrow with the Company (or its designee) any certificates issued in respect of Restricted Shares, together with a stock transfer form endorsed in blank.

	
6.3
	
Restricted Share Units.

	
 
	
(a)
	
Settlement. 

The Administrator may provide that settlement of Restricted Share Units will occur upon or as soon as reasonably practicable after the Restricted Share Units vest or will instead be deferred, on a mandatory basis or at the Participant’s election.

	
 
	
(b)
	
Shareholder Rights. 

A Participant will have no rights of a shareholder with respect to Shares subject to any Restricted Share Unit unless and until the Shares are delivered in settlement of the Restricted Share Unit.

 

	
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(c)
	
Dividend Equivalents. 

If the Administrator provides, a grant of Restricted Share Units may provide a Participant with the right to receive Dividend Equivalents. Dividend Equivalents may be paid currently or credited to an account for the Participant, settled in cash or Shares and subject to the same restrictions on transferability and forfeitability as the Restricted Share Units with respect to which the Dividend Equivalents are granted and subject to other terms and conditions as set forth in the Award Agreement.

	
7.
	
OTHER SHARE BASED AWARDS

Other Share Based Awards may be granted to Participants, including Awards entitling Participants to receive Shares to be delivered in the future and including annual or other periodic or long-term cash bonus awards (whether based on specified Performance Criteria or otherwise), in each case subject to any conditions and limitations in the Plan. Such Other Share Based Awards will also be available as a payment form in the settlement of other Awards, as standalone payments and as payment in lieu of compensation to which a Participant is otherwise entitled. Other Share Based Awards may be paid in Shares, cash or other property, as the Administrator determines. Subject to the provisions of the Plan, the Administrator will determine the terms and conditions of each Other Share Based Award, including any purchase price, performance goal (which may be based on the Performance Criteria), transfer restrictions, and vesting conditions, which will be set forth in the applicable Award Agreement.

	
8.
	
ADJUSTMENTS FOR CHANGES IN SHARES AND CERTAIN OTHER EVENTS

	
8.1
	
Equity Restructuring.

In connection with any Equity Restructuring, notwithstanding anything to the contrary in this Section 8, the Administrator will equitably adjust each outstanding Award as it deems appropriate to reflect the Equity Restructuring, which may include adjusting the number and type of securities subject to each outstanding Award and/or the Award’s exercise price or grant price (if applicable), granting new Awards to Participants, and making a cash payment to Participants. The adjustments provided under this Section 8.1 will be nondiscretionary and final and binding on the affected Participant and the Company; provided that the Administrator will determine whether an adjustment is equitable.

	
8.2
	
Corporate Events.

In the event of any Equity Restructuring, dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), capitalization, share issue, offer, subdivision, reorganization, merger, consolidation, combination, amalgamation, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Shares or other securities of the Company, Change in Control, issuance of warrants or other rights to purchase Shares or other securities of the Company, other similar corporate transaction or event, other unusual or nonrecurring transaction or event affecting the Company or its financial statements or any change in any Applicable Laws or accounting principles (any “Corporate Event”), the Administrator, on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event (except that action to give effect to a change in Applicable Law or accounting principles may be made within a 

 

	
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reasonable period of time after such change) and either automatically or upon the Participant’s request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to (x) prevent dilution or enlargement of the benefits or potential benefits intended by the Company to be made available under the Plan or with respect to any Award granted or issued under the Plan, (y) to facilitate such transaction or event or (z) give effect to such changes in Applicable Laws or accounting principles:

	
 
	
(a)
	
To provide for the cancellation of any such Award in exchange for either an amount of cash or other property with a value equal to the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights under the vested portion of such Award, as applicable; provided that, if the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award or realization of the Participant’s rights, in any case, is equal to or less than zero (as determined by the Administrator in its discretion), then the Award may be terminated without payment.  In addition, such payments under this provision may, in the Administrator’s discretion, be delayed to the same extent that payment of consideration to the holders of Ordinary Shares in connection with the Corporate Event is delayed as a result of escrows, earn outs, holdbacks or any other contingencies;

	
 
	
(b)
	
To provide that such Award shall vest and, to the extent applicable, be exercisable as to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the provisions of such Award;

	
 
	
(c)
	
To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by awards covering the equity securities of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and/or applicable exercise or purchase price, in all cases, as determined by the Administrator;

	
 
	
(d)
	
To make adjustments in the number and type of shares (or other securities or property) subject to outstanding Awards and/or with respect to which Awards may be granted under the Plan (including, but not limited to, adjustments of the limitations in Section 4 hereof on the maximum number and kind of shares which may be issued) and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards;

	
 
	
(e)
	
To replace such Award with other rights or property selected by the Administrator; and/or

	
 
	
(f)
	
To provide that the Award will terminate and cannot vest, be exercised or become payable after the applicable transaction or event.

The Administrator need not take the same action or actions with respect to all Awards or portions thereof or with respect to all Participants.  The Administrator may take different actions with respect to the vested and unvested portions of an Award.

 

	
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8.3
	
Administrative Stand Still.

In the event of any pending Corporate Event or other similar transaction, for administrative convenience, the Administrator may refuse to permit the exercise of any Award for up to sixty days before or after such transaction.

	
8.4
	
General.

Except as expressly provided in the Plan or the Administrator’s action under the Plan, no Participant will have any rights due to any subdivision or consolidation of Shares of any class, dividend payment, increase or decrease in the number of Shares of any class, issue, rights issue, offer or dissolution, liquidation, merger, or consolidation of the Company or other corporation. Except as expressly provided with respect to an Equity Restructuring under Section 8.1 above or the Administrator’s action under the Plan, no issuance by the Company of Shares of any class, or securities convertible into Shares of any class, will affect, and no adjustment will be made regarding, the number of Shares subject to an Award or the Award’s grant or exercise price. The existence of the Plan, any Award Agreements and the Awards granted hereunder will not affect or restrict in any way the Company’s right or power to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, (ii) any Corporate Event or (iii) sale or issuance of securities, including securities with rights superior to those of the Shares or securities convertible into or exchangeable for Shares. The Administrator may treat Participants and Awards (or portions thereof) differently under this Section 8.

	
9.
	
GENERAL PROVISIONS APPLICABLE TO AWARDS

	
9.1
	
Transferability.

Except as the Administrator may determine or provide in an Award Agreement or otherwise for Awards other than Incentive Options, Awards may not be sold, assigned, transferred, pledged or otherwise encumbered, either voluntarily or by operation of law, except by will or the laws of descent and distribution, or, subject to the Administrator’s consent, pursuant to a domestic relations order, and, during the life of the Participant, will be exercisable only by the Participant. References to a Participant, to the extent relevant in the context, will include references to a Participant’s authorized transferee that the Administrator specifically approves.

	
9.2
	
Documentation.

Each Award will be evidenced in an Award Agreement, which may be written or electronic, as the Administrator determines. Each Award may contain terms and conditions in addition to those set forth in the Plan.

	
9.3
	
Discretion.

Except as the Plan otherwise provides, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award to a Participant need not be identical, and the Administrator need not treat Participants or Awards (or portions thereof) uniformly.

 

	
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9.4
	
Termination of Status.

The Administrator will determine how the disability, death, retirement, authorized leave of absence or any other change or purported change in a Participant’s Service Provider status affects an Award and the extent to which, and the period during which, the Participant, the Participant’s legal representative, conservator, guardian or Designated Beneficiary may exercise rights under the Award, if applicable.

	
9.5
	
Withholding.

Each Participant must pay the Company, or make provision satisfactory to the Administrator for payment of, any taxes (which includes any social security contributions or the like) required by law to be withheld or paid by the Company or by an Subsidiary that is the employing entity of the Participant in connection with such Participant’s Awards by the date of the event creating the tax liability. The Company may deduct an amount sufficient to satisfy such tax obligations based on the minimum statutory withholding rates (or such other rate as may be determined by the Company after considering any accounting consequences or costs) from any payment of any kind otherwise due to a Participant. Subject to Section 10.8 and any Company insider trading policy (including blackout periods), Participants may satisfy such tax obligations (i) in cash, by wire transfer of immediately available funds, by check made payable to the order of the Company, provided that the Company may limit the use of the foregoing payment forms if one or more of the payment forms below is permitted, (ii) to the extent permitted by the Administrator, in whole or in part by delivery of Shares, including Shares retained from the Award creating the tax obligation, valued at their Fair Market Value, (iii) if there is a public market for Shares at the time the tax obligations are satisfied, unless the Company otherwise determines, (A) delivery (including telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to satisfy the tax obligations, or (B) delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company to deliver promptly to the Company cash or a check sufficient to satisfy the tax withholding, provided that such amount is paid to the Company at such time as may be required by the Administrator, or (iv) to the extent permitted by the Company, any combination of the foregoing payment forms approved by the Administrator. If any tax withholding obligation will be satisfied under clause (ii) of the immediately preceding sentence by the Company’s retention of Shares from the Award creating the tax obligation and there is a public market for Shares at the time the tax obligation is satisfied, the Company may elect to instruct any brokerage firm determined acceptable to the Company for such purpose to sell on the applicable Participant’s behalf some or all of the Shares retained and to remit the proceeds of the sale to the Company or its designee, and each Participant’s acceptance of an Award under the Plan will constitute the Participant’s authorization to the Company and instruction and authorization to such brokerage firm to complete the transactions described in this sentence.

	
9.6
	
Amendment of Award; Repricing.

The Administrator may amend, modify or terminate any outstanding Award, including by substituting another Award of the same or a different type, changing the exercise or settlement date, and converting an Incentive Option to a Non-Qualified Option. The Participant’s consent to such action will be required unless (i) the action, taking into account any related action, does 

 

	
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not materially and adversely affect the Participant’s rights under the Award, or (ii) the change is permitted under Section 8 or pursuant to Section 10.6. Notwithstanding the foregoing or anything in the Plan to the contrary, the Administrator may not, except pursuant to Section 8, without the approval of the shareholders of the Company, reduce the exercise price per share of outstanding Options or Share Appreciation Rights or cancel outstanding Options or Share Appreciation Rights in exchange for cash, other Awards or Options or Share Appreciation Rights with an exercise price per share that is less than the exercise price per share of the original Options or Share Appreciation Rights.

	
9.7
	
Conditions on Delivery of Shares.

The Company will not be obligated to deliver any Shares under the Plan or remove restrictions from Shares previously delivered under the Plan until (i) all Award conditions have been met or removed to the Company’s satisfaction, (ii) as determined by the Company, all other legal matters regarding the issuance and delivery of such Shares have been satisfied, including any applicable securities laws and stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Administrator deems necessary or appropriate to satisfy any Applicable Laws. The Company’s inability to obtain authority from any regulatory body having jurisdiction, which the Administrator determines is necessary to the lawful issuance and sale of any securities, will relieve the Company of any liability for failing to issue or sell such Shares as to which such requisite authority has not been obtained.

	
9.8
	
Acceleration.

The Administrator may at any time provide that any Award will become immediately vested and fully or partially exercisable, free of some or all restrictions or conditions, or otherwise fully or partially realizable.

	
9.9
	
Additional Terms of Incentive Options.

The Administrator may grant Incentive Options only to employees of the Company, any of its present or future parent or subsidiary corporations, as defined in Sections 424(e) or (f) of the Code, respectively, and any other entities the employees of which are eligible to receive Incentive Options under the Code. If an Incentive Option is granted to a Greater Than 10% Shareholder, the exercise price will not be less than 110% of the Fair Market Value on the Option’s grant date, and the term of the Option will not exceed five years. All Incentive Options will be subject to and construed consistently with Section 422 of the Code. By accepting an Incentive Option, the Participant agrees to give prompt notice to the Company of dispositions or other transfers (other than in connection with a Change in Control) of Shares acquired under the Option made within (i) two years from the grant date of the Option or (ii) one year after the transfer of such Shares to the Participant, specifying the date of the disposition or other transfer and the amount the Participant realized, in cash, other property, assumption of indebtedness or other consideration, in such disposition or other transfer. Neither the Company nor the Administrator will be liable to a Participant, or any other party, if an Incentive Option fails or ceases to qualify as an “incentive stock option” under Section 422 of the Code. Any Incentive Option or portion thereof that fails to qualify as an “incentive stock option” under Section 422 of the Code for any reason, including becoming exercisable with respect to Shares having a fair market value exceeding the $100,000 limitation under Treasury Regulation Section 1.422-4, will be a Non-Qualified Option.

 

	
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10.
	
MISCELLANEOUS

	
10.1
	
No Right to Employment or Other Status.

No person will have any claim or right to be granted an Award, and the grant of an Award will not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan or any Award, except as expressly provided in an Award Agreement.

	
10.2
	
No Rights as Shareholder; Certificates.

Subject to the Award Agreement, no Participant or Designated Beneficiary will have any rights as a shareholder with respect to any Shares to be distributed under an Award until becoming the record holder of such Shares. Notwithstanding any other provision of the Plan, unless the Administrator otherwise determines or Applicable Laws require, the Company will not be required to deliver to any Participant certificates evidencing Shares issued in connection with any Award and instead such Shares may be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator). The Company may place legends on certificates issued under the Plan that the Administrator deems necessary or appropriate to comply with Applicable Laws.

	
10.3
	
Effective Date and Term of Plan.

Unless earlier terminated by the Board, the Plan will become effective on the day prior to the NASDAQ Listing Date and will remain in effect until the tenth anniversary of the effective date, but Awards previously granted may extend beyond that date in accordance with the Plan. If the Plan is not approved by the Company’s shareholders, the Plan will not become effective, no Awards will be granted under the Plan and the Prior Plans will continue in full force and effect in accordance with their terms.

	
10.4
	
Amendment of Plan.

The Administrator may amend, suspend or terminate the Plan at any time; provided that no amendment, other than an increase to the Share Reserve, may materially and adversely affect any Award outstanding at the time of such amendment without the affected Participant’s consent. No Awards may be granted under the Plan during any suspension period or after Plan termination. Awards outstanding at the time of any Plan suspension or termination will continue to be governed by the Plan and the Award Agreement, as in effect before such suspension or termination. The Board will obtain shareholder approval of any Plan amendment to the extent necessary to comply with Applicable Laws.

	
10.5
	
Provisions for Foreign Participants.

The Administrator may modify Awards granted to Participants who are foreign nationals or employed outside the United States or establish subplans or procedures under the Plan to address differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.

 

	
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10.6
	
Section 409A.

The following provisions only apply to Participants subject to tax in the United States.

	
 
	
(a)
	
General. 

The Company intends that all Awards be structured to comply with, or be exempt from, Section 409A, such that no adverse tax consequences, interest, or penalties under Section 409A apply. Notwithstanding anything in the Plan or any Award Agreement to the contrary, the Administrator may, without a Participant’s consent, amend this Plan or Awards, adopt policies and procedures, or take any other actions (including amendments, policies, procedures and retroactive actions) as are necessary or appropriate to preserve the intended tax treatment of Awards, including any such actions intended to (A) exempt this Plan or any Award from Section 409A, or (B) comply with Section 409A, including regulations, guidance, compliance programs and other interpretative authority that may be issued after an Award’s grant date. The Company makes no representations or warranties as to an Award’s tax treatment under Section 409A or otherwise. The Company will have no obligation under this Section 10.6 or otherwise to avoid the taxes, penalties or interest under Section 409A with respect to any Award and will have no liability to any Participant or any other person if any Award, compensation or other benefits under the Plan are determined to constitute noncompliant “nonqualified deferred compensation” subject to taxes, penalties or interest under Section 409A.

	
 
	
(b)
	
Separation from Service. 

If an Award constitutes “nonqualified deferred compensation” under Section 409A, any payment or settlement of such Award upon a termination of a Participant’s Service Provider relationship will, to the extent necessary to avoid taxes under Section 409A, be made only upon the Participant’s “separation from service” (within the meaning of Section 409A), whether such “separation from service” occurs upon or after the termination of the Participant’s Service Provider relationship. For purposes of this Plan or any Award Agreement relating to any such payments or benefits, references to a “termination,” “termination of employment” or like terms means a “separation from service.”

	
 
	
(c)
	
Payments to Specified Employees. 

Notwithstanding any contrary provision in the Plan or any Award Agreement, any payment(s) of “nonqualified deferred compensation” required to be made under an Award to a “specified employee” (as defined under Section 409A and as the Administrator determines) due to his or her “separation from service” will, to the extent necessary to avoid taxes under Section 409A(a)(2)(B)(i) of the Code, be delayed for the six-month period immediately following such “separation from service” (or, if earlier, until the specified employee’s death) and will instead be paid (as set forth in the Award Agreement) on the day immediately following such six-month period or as soon as administratively practicable thereafter (without interest). Any payments of “nonqualified deferred compensation” under such Award payable more than six months following the Participant’s “separation from service” will be paid at the time or times the payments are otherwise scheduled to be made.

 

	
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10.7
	
Limitations on Liability.

Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, other employee or agent of the Company or any Subsidiary will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan or any Award, and such individual will not be personally liable with respect to the Plan because of any contract or other instrument executed in his or her capacity as an Administrator, director, officer, other employee or agent of the Company or any Subsidiary. The Company will indemnify and hold harmless each director, officer, other employee and agent of the Company or any Subsidiary that has been or will be granted or delegated any duty or power relating to the Plan’s administration or interpretation, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Administrator’s approval) arising from any act or omission concerning this Plan unless arising from such person’s own fraud or bad faith.

	
10.8
	
Lock-Up Period.

The Company may, at the request of any underwriter representative or otherwise, in connection with registering the offering of any Company securities under the Securities Act, prohibit Participants from, directly or indirectly, selling or otherwise transferring any Shares or other Company securities during a period of up to one hundred eighty days following the effective date of a Company registration statement filed under the Securities Act, or such longer period as determined by the underwriter.

	
10.9
	
Data Privacy.

As a condition for receiving any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this section by and among the Company and its Subsidiaries and affiliates exclusively for implementing, administering and managing the Participant’s participation in the Plan. The Company and its Subsidiaries and affiliates may hold certain personal information about a Participant, including the Participant’s name, address and telephone number; birthdate; social security, insurance number or other identification number; salary; nationality; job title(s); any Shares held in the Company or its Subsidiaries and affiliates; and Award details, to implement, manage and administer the Plan and Awards (the “Data”). The Company and its Subsidiaries and affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage a Participant’s participation in the Plan, and the Company and its Subsidiaries and affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management. These recipients may be located in the Participant’s country, or elsewhere, and the Participant’s country may have different data privacy laws and protections than the recipients’ country. By accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Participant’s participation in the Plan, including any required Data transfer to a broker or other third party with whom the Company or the Participant may elect to deposit any Shares. The Data related to a Participant will be held only as long as necessary to implement, administer, and manage the Participant’s participation in the Plan. A Participant may, at any time, view the Data that the Company holds regarding such Participant, request additional information about the storage and processing of the Data regarding such Participant, recommend any necessary corrections to the Data regarding the Participant or refuse or withdraw the consents in this Section 10.9 in writing, without cost, by contacting the local human resources representative. The Company may cancel Participant’s ability to participate in the Plan and, in the Administrator’s discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents in this Section 10.9. For more information on the consequences of refusing or withdrawing consent, Participants may contact their local human resources representative.

 

	
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10.10
	
Severability.

If any portion of the Plan or any action taken under it is held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provisions had been excluded, and the illegal or invalid action will be null and void.

	
10.11
	
Governing Documents.

If any contradiction occurs between the Plan and any Award Agreement or other written agreement between a Participant and the Company (or any Subsidiary) that the Administrator has approved, the Plan will govern, unless it is expressly specified in such Award Agreement or other written document that a specific provision of the Plan will not apply.

	
10.12
	
Governing Law.

The Plan and all Awards will be governed by and interpreted in accordance with the laws of the United Kingdom, disregarding any state’s choice-of-law principles requiring the application of a jurisdiction’s laws other than the United Kingdom.

	
10.13
	
Claw-back Provisions.

All Awards (including any proceeds, gains or other economic benefit the Participant actually or constructively receives upon receipt or exercise of any Award or the receipt or resale of any Shares underlying the Award) will be subject to any Company claw-back policy, including any claw-back policy adopted to comply with Applicable Laws (including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder) as set forth in such claw-back policy or the Award Agreement.

	
10.14
	
Titles and Headings.

The titles and headings in the Plan are for convenience of reference only and, if any conflict, the Plan’s text, rather than such titles or headings, will control.

	
10.15
	
Conformity to Securities Laws.

Participant acknowledges that the Plan is intended to conform to the extent necessary with Applicable Laws. Notwithstanding anything herein to the contrary, the Plan and all Awards will be administered only in conformance with Applicable Laws. To the extent Applicable Laws permit, the Plan and all Award Agreements will be deemed amended as necessary to conform to Applicable Laws.

	
10.16
	
Relationship to Other Benefits.

No payment under the Plan will be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except as expressly provided in writing in such other plan or an agreement thereunder.

 

	
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10.17
	
Broker-Assisted Sales.

In the event of a broker-assisted sale of Shares in connection with the payment of amounts owed by a Participant under or with respect to the Plan or Awards, including amounts to be paid under the final sentence of Section 9.5: (a) any Shares to be sold through the broker-assisted sale will be sold on the day the payment first becomes due, or as soon thereafter as practicable; (b) such Shares may be sold as part of a block trade with other Participants in the Plan in which all participants receive an average price; (c) the applicable Participant will be responsible for all broker’s fees and other costs of sale, and by accepting an Award, each Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the Company or its designee receives proceeds of such sale that exceed the amount owed, the Company will pay such excess in cash to the applicable Participant as soon as reasonably practicable; (e) the Company and its designees are under no obligation to arrange for such sale at any particular price; and (f) in the event the proceeds of such sale are insufficient to satisfy the Participant’s applicable obligation, the Participant may be required to pay immediately upon demand to the Company or its designee an amount in cash sufficient to satisfy any remaining portion of the Participant’s obligation.

	
11.
	
DEFINITIONS.

As used in the Plan, the following words and phrases will have the following meanings:

	
11.1
	
“ADSs” means American Depositary Shares, representing Ordinary Shares on deposit with a U.S. banking institution selected by the Company and which are registered pursuant to a Form F-6.

	
11.2
	
“Administrator” means the Board or a Committee to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee.

	
11.3
	
“Applicable Laws” shall mean any applicable law, including without limitation: (a) the requirements relating to the administration of equity incentive plans under U.S. federal and state securities, tax and other applicable laws, rules and regulations, the applicable rules of any stock exchange or quotation system on which the Shares are listed or quoted and the applicable laws and rules of any foreign country or other jurisdiction where Awards are granted; and (b) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether U.S. federal, state, local or foreign, applicable in the United Kingdom, United States or any other relevant jurisdiction.

	
11.4
	
“Award” means, individually or collectively, a grant under the Plan of Options, Share Appreciation Rights, Restricted Shares, Restricted Share Units or Other Share Based Awards.

	
11.5
	
“Award Agreement” means a written agreement evidencing an Award, which may be electronic, that contains such terms and conditions as the Administrator determines, consistent with and subject to the terms and conditions of the Plan.

	
11.6
	
“Board” means the Board of Directors of the Company.

 

	
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11.7
	
“Cause” means (i) if a Participant is a party to a written employment or consulting agreement with the Company or any of its Subsidiaries or an Award Agreement in which the term “cause” is defined (a “Relevant Agreement”), “Cause” as defined in the Relevant Agreement, and (ii) if no Relevant Agreement exists, (A) the Administrator’s determination that the Participant failed to substantially perform the Participant’s duties (other than a failure resulting from the Participant’s Disability); (B) the Administrator’s determination that the Participant failed to carry out, or comply with any lawful and reasonable directive of the Board or the Participant’s immediate supervisor; (C) the occurrence of any act or omission by the Participant that could reasonably be expected to result in (or has resulted in) the Participant’s conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony or indictable offense or crime involving moral turpitude; (D) the Participant’s unlawful use (including being under the influence) or possession of illegal drugs on the premises of the Company or any of its Subsidiaries or while performing the Participant’s duties and responsibilities for the Company or any of its Subsidiaries; or (E) the Participant’s commission of an act of fraud, embezzlement, misappropriation, misconduct, or breach of fiduciary duty against the Company or any of its Subsidiaries.

	
11.8
	
“Change in Control” means and includes each of the following:

	
 
	
(a)
	
a Sale; or

	
 
	
(b)
	
a Takeover.

The Administrator shall have full and final authority, which shall be exercised in its sole discretion, to determine conclusively whether a Change in Control has occurred pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.

	
11.9
	
“Code” means the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.

	
11.10
	
“Committee” means one or more committees or subcommittees of the Board, which may include one or more Company directors or executive officers, to the extent Applicable Laws permit. To the extent required to comply with the provisions of Rule 16b-3, it is intended that each member of the Committee will be, at the time the Committee takes any action with respect to an Award that is subject to Rule 16b-3, a “non-employee director” within the meaning of Rule 16b-3; however, a Committee member’s failure to qualify as a “non-employee director” within the meaning of Rule 16b-3 will not invalidate any Award granted by the Committee that is otherwise validly granted under the Plan.

	
11.11
	
“Company” means Nightstar Therapeutics plc, registered in England and Wales with company number 855822, or any successor.

	
11.12
	
“Control” shall have the meaning given in section 995 (2) of the UK Income Tax Act 2007, unless otherwise specified.

 

	
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11.13
	
“Designated Beneficiary” means the beneficiary or beneficiaries the Participant designates, in a manner the Administrator determines, to receive amounts due or exercise the Participant’s rights if the Participant dies or becomes incapacitated. Without a Participant’s effective designation, “Designated Beneficiary” will mean the Participant’s estate.

	
11.14
	
“Director” means a Board member.

	
11.15
	
“Disability” means a permanent and total disability under Section 22(e)(3) of the Code, as amended.

	
11.16
	
“Dividend Equivalents” means a right granted to a Participant under the Plan to receive the equivalent value (in cash or Shares) of dividends paid on Shares.

	
11.17
	
“Employee” means any employee of the Company or its Subsidiaries.

	
11.18
	
“Equity Restructuring” means a nonreciprocal transaction between the Company and its shareholders, such as a share dividend, share split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of Shares (or other Company securities) or the price of Shares (or other Company securities) and causes a change in the per share value of the Shares underlying outstanding Awards.

	
11.19
	
“Exchange Act” means the Securities Exchange Act of 1934, as amended.

	
11.20
	
“Fair Market Value” means, as of any date, the value of Shares determined as follows: (i) if the Shares are listed on any established stock exchange, its Fair Market Value will be the closing sales price for Shares as quoted on such exchange for the last day preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; (ii) if the Shares are not traded on a stock exchange but is quoted on a national market or other quotation system, the closing sales price on the last date preceding such date during which a sale occurred, as reported in The Wall Street Journal or another source the Administrator deems reliable; or (iii) without an established market for the Shares, the Administrator will determine the Fair Market Value in its discretion. Notwithstanding the foregoing, with respect to any Award granted on the pricing date of the Company’s initial public offering, the Fair Market Value shall mean the initial public offering price of a Share as set forth in the Company’s final prospectus relating to its initial public offering filed with the Securities and Exchange Commission.

	
11.21
	
“Greater Than 10% Shareholder” means an individual then owning (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of equity securities of the Company or its parent or subsidiary corporation, as defined in Section 424(e) and (f) of the Code, respectively.

	
11.22
	
“Incentive Option” means an Option intended to qualify as an “incentive stock option” as defined in Section 422 of the Code.

	
11.23
	
“NASDAQ Listing Date” means the first date upon which the Shares are listed (or approved for listing) upon notice of issuance on the NASDAQ Global Market.

	
11.24
	
“Non-Employee Sub-Plan” means the Non-Employee Sub-Plan to the Plan adopted by the Board;

 

	
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11.25
	
“Non-Qualified Option” means an Option not intended or not qualifying as an Incentive Option.

	
11.26
	
“Option” means an option to purchase Shares.

	
11.27
	
“Ordinary Share” means an ordinary share of £0.01 each in the capital of the Company.

	
11.28
	
“Other Share Based Awards” means awards of Shares, and other awards valued wholly or partially by referring to, or are otherwise based on, Shares or other property.

	
11.29
	
“Participant” means a Service Provider who has been granted an Award.

	
11.30
	
“Performance Criteria” mean the criteria (and adjustments) that the Administrator may select for an Award to establish performance goals for a performance period. 

	
11.31
	
“Plan” means this 2017 Equity Incentive Plan.

	
11.32
	
“Prior Plans” means any prior equity incentive plans of the Company or its predecessor.

	
11.33
	
“Prior Plan Award” means an award outstanding under the Prior Plans as of the Plan’s effective date in Section 10.3.

	
11.34
	
“Restricted Shares” means Shares awarded to a Participant under Section 6 subject to certain vesting conditions and other restrictions.

	
11.35
	
“Restricted Share Unit” means an unfunded, unsecured right to receive, on the applicable settlement date, one Share or an amount in cash or other consideration determined by the Administrator to be of equal value as of such settlement date, subject to certain vesting conditions and other restrictions.

	
11.36
	
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act.

	
11.37
	
“Sale” shall mean the sale of all or substantially all of the assets of the Company.

	
11.38
	
“Section 409A” means Section 409A of the Code and all regulations, guidance, compliance programs and other interpretative authority thereunder.

	
11.39
	
“Securities Act” means the Securities Act of 1933, as amended.

	
11.40
	
“Service Provider” means an Employee or a Director who is an Employee.

	
11.41
	
“Share” means an Ordinary Share or the number of ADSs equal to an Ordinary Share.

	
11.42
	
“Share Appreciation Right” means a Share Appreciation right granted under Section 5.

	
11.43
	
“Subsidiary” means any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing at least 50% of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

 

	
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11.44
	
“Substitute Awards” shall mean Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, awards previously granted, or the right or obligation to make future awards, in each case by a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines.

	
 
	
(a)
	
“Takeover” shall mean if any person (or a group of persons acting in concert) (the “Acquiring Person”):

	
 
	
(i)
	
obtains Control of the Company as the result of making a general offer to:-

	
 
	
(A)
	
acquire all of the issued ordinary share capital of the Company, which is made on a condition that, if it is satisfied, the Acquiring Person will have Control of the Company; or

	
 
	
(B)
	
acquire all of the shares in the Company which are of the same class as the Shares; or

	
 
	
(ii)
	
obtains Control of the Company as a result of a compromise or arrangement sanctioned by a court under Section 899 of the UK Companies Act 2006, or sanctioned under any other similar law of another jurisdiction; or

	
 
	
(iii)
	
becomes bound or entitled under Sections 979 to 985 of the UK Companies Act 2006 (or similar law of another jurisdiction) to acquire shares of the same class as the Shares; or

	
 
	
(iv)
	
obtains Control of the Company in any other way.

	
11.45
	
“Termination of Service” means the date the Participant ceases to be a Service Provider.

 

 

	
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NIGHTSTAR THERAPEUTICS PLC
2017 EQUITY INCENTIVE PLAN[: NON-EMPLOYEE SUB-PLAN]1

OPTION GRANT NOTICE

Capitalized terms not specifically defined in this Option Grant Notice (the “Grant Notice”) have the meanings given to them in the 2017 Equity Incentive Plan[: Non-Employee Sub-Plan] 1  (as amended from time to time, the “Plan”) of Nightstar Therapeutics plc (the “Company”).

The Company has granted to the participant listed below (“Participant”) the option described in this Grant Notice (the “Option”), subject to the terms and conditions of the Plan and the Option Agreement attached as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference.

	
Participant:
	
 
	
 

	
Grant Date:
	
 
	
 

	
Exercise Price per Share:
	
 
	
 

	
Shares Subject to the Option:
	
 
	
 

	
Final Expiration Date:
	
 
	
 

	
Vesting Commencement Date:
	
 
	
 

	
Vesting Schedule:
	
 
	
So long as Participant remains continuously a Service Provider [____]% of the total number of Shares subject to the Option shall vest and become exercisable on the [____] anniversary of the Vesting Commencement Date and [______]% of the total number of Shares subject to the Option shall vest and become exercisable [____] thereafter [and upon a Change in Control, the Option will vest and become exercisable in full immediately prior to such Change in Control]2.

[In addition, if a Change in Control occurs and (i) in connection with a Change in Control, this Option is assumed or continued by the successor or acquiror entity in such Change in Control or this Option is substituted for a similar award of the successor or acquiror entity pursuant to Section 8.2(c) of the Plan and (ii) on or within 12 months following the effective date of such Change in Control, the Company (or its successor or the applicable Subsidiary thereof) Terminates the Service of the Participant without Cause (as defined in the Plan), then, effective as of the date of such Termination of Service any then unvested  Shares subject to this Option shall become immediately vested and exercisable.]3

	
Type of Option
	
 
	
[Incentive Option/Non-Qualified Option]

	
	 

	
1 
	
 For consultants, advisers and non-employee directors

	
2 
	
 “Single-trigger” language for BOD members of Nightstar Therapeutics plc

	
3 
	
 “Double-trigger” language should not be included for BOD members of Nightstar Therapeutics plc

152032510 v2 

 

By Participant’s signature below, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, 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, 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, this Grant Notice or the Agreement.

 

	
NIGHTSTAR THERAPEUTICS PLC
	
 
	
PARTICIPANT

	
By:
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Name:
	
 
	
[Participant Name]

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Title:

 
	
 
	
 

 

 

				
	
 
	
 
	
 
	
 

 

152032510 v2 

 

Exhibit A

OPTION 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.

	
1.
	
GENERAL

	
1.1
	
Grant of Option.

The Company has granted to Participant the Option effective as of the grant date set forth in the Grant Notice (the “Grant Date”).

	
1.2
	
Incorporation of Terms of Plan.

The Option is subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

	
2.
	
PERIOD OF EXERCISABILITY

	
2.1
	
Commencement of Exercisability.

The Option will vest and become exercisable according to the vesting schedule in the Grant Notice (the “Vesting Schedule”) except that any fraction of a Share as to which the Option would be vested or exercisable will be accumulated and will vest and become exercisable only when a whole Share has accumulated. Notwithstanding anything in the Grant Notice, the Plan or this Agreement to the contrary, unless the Administrator otherwise determines, the Option will immediately expire and be forfeited as to any portion that is not vested and exercisable as of Participant’s Termination of Service for any reason.

	
2.2
	
Duration of Exercisability.

The Vesting Schedule is cumulative. Any portion of the Option which vests and becomes exercisable will remain vested and exercisable until the Option expires. The Option will be forfeited immediately upon its expiration.

	
2.3
	
Expiration of Option.

The Option may not be exercised to any extent by anyone after, and will expire on, the first of the following to occur:

	
 
	
(a)
	
The final expiration date in the Grant Notice;

	
 
	
(b)
	
Except as the Administrator may otherwise approve, the expiration of three (3) months from the date of Participant’s Termination of Service, unless Participant’s Termination of Service is for Cause or by reason of Participant’s death or Disability;

152032510 v2 

 

	
 
	
(c)
	
Except as the Administrator may otherwise approve, the expiration of one (1) year from the date of Participant’s Termination of Service by reason of Participant’s death or Disability; and

	
 
	
(d)
	
Except as the Administrator may otherwise approve, Participant’s Termination of Service for Cause.

	
3.
	
EXERCISE OF OPTION

	
3.1
	
Person Eligible to Exercise.

During Participant’s lifetime, only Participant may exercise the Option. After Participant’s death, any exercisable portion of the Option may, prior to the time the Option expires, be exercised by Participant’s Designated Beneficiary as provided in the Plan.

	
3.2
	
Partial Exercise.

Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised, in whole or in part, according to the procedures in the Plan at any time prior to the time the Option or portion thereof expires, except that the Option may only be exercised for whole Shares.

	
3.3
	
Tax Withholding.

	
 
	
(a)
	
The Company has the right and option, but not the obligation, to treat Participant’s failure to provide timely payment in accordance with the Plan of any withholding tax arising in connection with the Option as Participant’s election to satisfy all or any portion of the withholding tax by requesting the Company retain Shares otherwise issuable under the Option.

	
 
	
(b)
	
Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the Option, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the Option. 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 exercise of the Option or the subsequent sale of Shares. The Company and the Subsidiaries do not commit and are under no obligation to structure the Option to reduce or eliminate Participant’s tax liability.

	
4.
	
OTHER PROVISIONS

	
4.1
	
Adjustments.

Participant acknowledges that the Option is subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

152032510 v2 

 

	
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 (or, if Participant is then deceased, to the person entitled to exercise the Option) 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 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, 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 or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the Option 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 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.

152032510 v2 

 

	
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.

	
4.9
	
Limitation on Participant’s Rights.

Participation in the Plan 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, 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 Option, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to the Option, as and when exercised pursuant to the terms hereof.

	
4.10
	
Not a Contract of Employment.

Nothing in the Plan, 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.

	
4.12
	
Incentive Options.

If the Option is designated as an Incentive Option:

	
 
	
(a)
	
Participant acknowledges that to the extent the aggregate fair market value of shares (determined as of the time the option with respect to the shares is granted) with respect to which options intended to qualify as “incentive stock options” under Section 422 of the Code, including the Option, are exercisable for the first time by Participant during any calendar year exceeds $100,000 or if for any other reason such options do not qualify or cease to qualify for treatment as “incentive stock options” under Section 422 of the Code, such options (including the Option) will be treated as non-qualified options. Participant further acknowledges that the rule set forth in the preceding sentence will be applied by taking the Option and other options into account in the order in which they were granted, as determined under Section 422(d) of the Code. Participant also acknowledges that if the Option is exercised more than three (3) months after Participant’s Termination of Service, other than by reason of death or disability, the Option will be taxed as a Non-Qualified Option.

	
 
	
(b)
	
Participant will give prompt written notice to the Company of any disposition or other transfer of any Shares acquired under this Agreement if such disposition or other transfer is made (a) within two (2) years from the Grant Date or (b) within one (1) year after the transfer of such Shares to Participant. Such notice will specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer.

 

152032510 v2 

 

NIGHTSTAR THERAPEUTICS PLC
2017 EQUITY INCENTIVE PLAN[: NON-EMPLOYEE SUB-PLAN]4

RESTRICTED SHARE GRANT NOTICE

Capitalized terms not specifically defined in this Restricted Share Grant Notice (the “Grant Notice”) have the meanings given to them in the 2017 Equity Incentive Plan[: Non-Employee Sub-Plan] (as amended from time to time, the “Plan”) of Nightstar Therapeutics plc (the “Company”).

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

	
Participant:
	
 
	
 

	
Grant Date:
	
 
	
 

	
Number of Restricted Shares:
	
 
	
 

	
Vesting Commencement Date:
	
 
	
 

	
Vesting Schedule:
	
 
	
So long as Participant remains continuously a Service Provider [___]% of the total number of Restricted Shares shall vest on the [____] anniversary of the Vesting Commencement Date and [____]% of the total number of Restricted Shares shall vest [____] thereafter, [and upon a Change in Control the Restricted Shares shall vest in full immediately prior to such Change in Control]5.

[In addition, if a Change in Control occurs and (i) in connection with a Change in Control, the Restricted Shares are substituted for a similar award of the successor or acquiror entity pursuant to Section 8.2(c) of the Plan and (ii) upon or within 12 months following the effective date of such Change in Control, the Company (or its successor or the applicable Subsidiary thereof) Terminates the Service of the Participant without Cause (as defined in the Plan), then, effective as of the date of such Termination of Service  any then unvested Restricted Shares subject to this Award shall become immediately vested.]6

	
	 

	
4 
	
 For consultants, advisers and non-employee directors

	
5 
	
 “Single-trigger” language for BOD members of Nightstar Therapeutics plc

	
6 
	
 “Double-trigger” language should not be included for BOD members of Nightstar Therapeutics plc

156294346 v2 

 

	
Mandatory Sale to Cover Withholding Taxes:
	
 
	
As a condition to acceptance of this award, to the fullest extent permitted under the Plan and applicable law, withholding taxes and other tax related items will be satisfied through the sale of a number of the shares subject to the Award as determined in accordance with Section 3.3 of the Agreement and the remittance of the cash proceeds to the Company. Under the Agreement, the Company is authorized and directed by the Participant to make payment from the cash proceeds of this sale directly to the appropriate taxing authorities in an amount equal to the taxes required to be withheld. The mandatory sale of shares to cover withholding taxes and tax related items is imposed by the Company on the Participant in connection with the receipt of this Award, and it is intended to comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act and be interpreted to meet the requirements of Rule 10b5-1(c).

By Participant’s signature below, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, 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, 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, this Grant Notice or the Agreement.

 

	
NIGHTSTAR THERAPEUTICS PLC
	
 
	
PARTICIPANT

	
By:
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Name:
	
 
	
[Participant Name]

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Title:

 
	
 
	
 

 

 

 

 

 

156294346 v2 

 

Exhibit A

RESTRICTED SHARE 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.

	
1.
	
GENERAL

	
1.1
	
Issuance of Restricted Shares.

The Company will issue the Restricted Shares to the Participant effective as of the grant date set forth in the Grant Notice and will cause (a) a certificate or certificates representing the Restricted Shares to be registered in Participant’s name or (b) the Restricted Shares to be held in book-entry form. If a certificate representing the Restricted Shares is issued, the certificate will be delivered to, and held in accordance with this Agreement by, the Company or its authorized representatives and will bear the restrictive legends required by this Agreement. If the Restricted Shares are held in book-entry form, then the book-entry will indicate that the Restricted Shares are subject to the restrictions of this Agreement.

	
1.2
	
Incorporation of Terms of Plan.

The Restricted Shares are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

	
2.
	
VESTING, FORFEITURE AND ESCROW

	
2.1
	
Vesting.

The Restricted Shares will become vested Shares (the “Vested Shares”) according to the vesting schedule in the Grant Notice except that any fraction of a Share that would otherwise become a Vested Share will be accumulated and will become a Vested Share only when a whole Vested Share has accumulated.

	
2.2
	
Forfeiture.

In the event of Participant’s Termination of Service for any reason, Participant will immediately and automatically forfeit to the Company any Shares that are not Vested Shares (the “Unvested Shares”) at the time of Participant’s Termination of Service, except as otherwise determined by the Administrator or provided in a binding written agreement between Participant and the Company. Upon forfeiture of Unvested Shares, the Company will become the legal and beneficial owner of the Unvested Shares and all related interests and Participant will have no further rights with respect to the Unvested Shares.

156294346 v2 

 

	
2.3
	
Escrow.

	
 
	
(a)
	
Unvested Shares will be held by the Company or its authorized representatives until (i) they are forfeited, (ii) they become Vested Shares or (iii) this Agreement is no longer in effect. By accepting this Award, Participant appoints the Company and its authorized representatives as Participant’s attorney(s)-in-fact to take all actions necessary to effect any transfer of forfeited Unvested Shares (and Retained Distributions (as defined below), if any, paid on such forfeited Unvested Shares) to the Company as may be required pursuant to the Plan or this Agreement and to execute such representations or other documents or assurances as the Company or such representatives deem necessary or advisable in connection with any such transfer. The Company, or its authorized representative, will not be liable for any good faith act or omission with respect to the holding in escrow or transfer of the Restricted Shares.

	
 
	
(b)
	
All cash dividends and other distributions made or declared with respect to Unvested Shares (“Retained Distributions”) will be held by the Company until the time (if ever) when the Unvested Shares to which such Retained Distributions relate become Vested Shares. The Company will establish a separate Retained Distribution bookkeeping account (“Retained Distribution Account”) for each Unvested Share with respect to which Retained Distributions have been made or declared in cash and credit the Retained Distribution Account (without interest) on the date of payment with the amount of such cash made or declared with respect to the Unvested Share. Retained Distributions (including any Retained Distribution Account balance) will immediately and automatically be forfeited upon forfeiture of the Unvested Share with respect to which the Retained Distributions were paid or declared.

	
 
	
(c)
	
As soon as reasonably practicable following the date on which an Unvested Share becomes a Vested Share, the Company will (i) cause the certificate (or a new certificate without the legend required by this Agreement, if Participant so requests) representing the Share to be delivered to Participant or, if the Share is held in book-entry form, cause the notations indicating the Share is subject to the restrictions of this Agreement to be removed and (ii) pay to Participant the Retained Distributions relating to the Share.

	
2.4
	
Rights as Shareholder.

Except as otherwise provided in this Agreement or the Plan, upon issuance of the Restricted Shares by the Company, Participant will have all the rights of a shareholder with respect to the Restricted Shares, including the right to vote the Restricted Shares and to receive dividends or other distributions paid or made with respect to the Restricted Shares.

	
3.
	
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 the Restricted Shares 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.

156294346 v2 

 

	
3.2
	
Section 83(b) Election.

If Participant makes an election under Section 83(b) of the Code with respect to the Restricted Shares, Participant will deliver a copy of the election to the Company promptly after filing the election with the Internal Revenue Service.

	
3.3
	
Tax Withholding.

	
 
	
(a)
	
On each vesting date, and on or before the Restricted Shares vest, and at any other time as reasonably requested by the Company in accordance with applicable tax laws (including, without limitation, in connection with the payment of any Retained Distributions), Participant hereby authorizes any required withholding from the shares issuable to Participant and/or otherwise agree to make adequate provision in cash for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any parent or subsidiary that arise in connection with Participant’s Restricted Shares (the “Withholding Taxes”).  Specifically, pursuant to Section 3.3(b), Participant has agreed to a “same day sale” commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby Participant has irrevocably agreed to sell a portion of the shares in connection with Participant’s Restricted Shares to satisfy the Withholding Taxes and whereby the FINRA Dealer committed to forward the proceeds necessary to satisfy the Withholding Taxes directly to the Company and/or its parents or subsidiaries.  If, for any reason, such “same day sale” commitment pursuant to Section 3.3(b) does not result in sufficient proceeds to satisfy the Withholding Taxes or would be prohibited by applicable law at the applicable time, Participant hereby authorizes the Company and/or the relevant parent or subsidiary, or their respective agents, at their discretion, to satisfy the obligations with regard to all Withholding Taxes by one or a combination of the following: (i) withholding from any compensation otherwise payable to Participant by the Company or any parent or subsidiary; (ii) causing Participant to tender a cash payment (which may be in the form of a check, electronic wire transfer or other method permitted by the Company); or (iii) withholding shares from the shares issued or otherwise issuable to Participant in connection with Participant’s Restricted Shares with a fair market value (measured as of the date shares are issued to Participant) equal to the amount of such Withholding Taxes; provided, however, that the number of such shares so withheld will not exceed the amount necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates for federal, state, local and, if applicable, foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income; and, provided, further, that to the extent necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will be subject to the prior approval of the Company’s Remuneration Committee.

156294346 v2 

 

	
 
	
(b)
	
Participant hereby acknowledges and agrees to the following:

	
 
	
(i)
	
Participant hereby appoints such FINRA Dealer appointed by the Company for purposes of this Section 3.3(b) as Participant’s agent (the “Agent”), and authorize the Agent:

	
 
	
(A)
	
To sell on the open market at the then prevailing market price(s), on Participant’s behalf, as soon as practicable on or after each date on which the shares underlying Participant’s Restricted Shares vest, the number (rounded up to the next whole number) of the shares to be delivered to Participant in connection with the vesting of those shares sufficient to generate proceeds to cover (A) the Withholding Taxes that Participant is required to pay pursuant to the Plan and this Agreement as a result of the shares vesting (or being issued, as applicable) and (B) all applicable fees and commissions due to, or required to be collected by, the Agent with respect thereto; and

	
 
	
(B)
	
To remit any remaining funds to Participant.

	
 
	
(ii)
	
Participant hereby authorizes the Company and the Agent to cooperate and communicate with one another to determine the number of shares that must be sold pursuant to this Section 3.3(b).

	
 
	
(iii)
	
Participant understands that the Agent may effect sales as provided in this Section 3.3(b) in one or more sales and that the average price for executions resulting from bunched orders will be assigned to Participant’s account. In addition, Participant acknowledges that it may not be possible to sell shares underlying Participant’s Restricted Shares as provided by in this Section 3.3(b) due to (A) a legal or contractual restriction applicable to Participant or the Agent, (B) a market disruption, or (C) rules governing order execution priority on the national exchange where the shares may be traded. In the event of the Agent’s inability to sell shares underlying Participant’s Restricted Shares, Participant will continue to be responsible for the timely payment to the Company of all Withholding Taxes and any other federal, state, local and foreign taxes that are required by applicable laws and regulations to be withheld, including but not limited to those amounts specified in this Section 3.3(b).

	
 
	
(iv)
	
Participant acknowledges that regardless of any other term or condition of this Section 3.3(b), the Agent will not be liable to Participant for (A) special, indirect, punitive, exemplary, or consequential damages, or incidental losses or damages of any kind, or (B) any failure to perform or for any delay in performance that results from a cause or circumstance that is beyond its reasonable control.

	
 
	
(v)
	
Participant hereby agrees to execute and deliver to the Agent any other agreements or documents as the Agent reasonably deems necessary or appropriate to carry out the purposes and intent of this Section 3.3(b). The Agent is a third-party beneficiary of this Section 3.3(b).

156294346 v2 

 

	
 
	
(vi)
	
Participant hereby agrees that if Participant has signed the Grant Notice at a time that Participant is in possession of material non-public information, unless Participant informs the Company in writing within five business days following the date Participant ceases to be in possession of material non-public information that Participant is not in agreement with the provisions of this Section 3.3(b), Participant not providing such written determination shall be a determination and agreement that Participant has agreed to the provisions set forth in this Section 3.3(b) on such date as Participant has ceased to be in possession of material non-public information.

	
 
	
(vii)
	
This Section 3.3(b) shall terminate not later than the date on which all withholding taxes arising in connection with the vesting of Participant’s Restricted Shares have been satisfied.

	
 
	
(c)
	
Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the Restricted Shares, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the Restricted Shares. 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 Restricted Shares or the subsequent sale of the Restricted Shares. The Company and the Subsidiaries do not commit and are under no obligation to structure this Award to reduce or eliminate Participant’s tax liability.

	
4.
	
RESTRICTIVE LEGENDS AND TRANSFERABILITY

	
4.1
	
Legends.

Any certificate representing a Restricted Share will bear the following legend until the Restricted Share becomes a Vested Share:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE IN FAVOR OF THE COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A RESTRICTED SHARE AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

	
4.2
	
Transferability.

The Restricted Shares and any Retained Distributions are subject to the restrictions on transfer in the Plan and may not be sold, assigned or transferred in any manner unless and until they become Vested Shares. Any attempted transfer or disposition of Unvested Shares or related Retained Distributions prior to the time the Unvested Shares become Vested Shares will be null and void. The Company will not be required to (a) transfer on its books any Restricted Share that has been sold or otherwise transferred in violation of this Agreement or (b) treat as owner of such Restricted Share or accord the right to vote or pay dividends to any purchaser or other transferee to whom such Restricted Share has been so transferred. The Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, or make appropriate notations to the same effect in its records.

156294346 v2 

 

	
5.
	
OTHER PROVISIONS

	
5.1
	
Adjustments.

Participant acknowledges that the Restricted Shares are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.

	
5.2
	
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.

	
5.3
	
Titles.

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

	
5.4
	
Conformity to Securities Laws.

Participant acknowledges that the Plan, 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.

	
5.5
	
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 this Agreement or the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

	
5.6
	
Limitations Applicable to Section 16 Persons.

Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the Restricted Shares 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.

156294346 v2 

 

	
5.7
	
Entire Agreement.

The Plan, 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.

	
5.8
	
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.

	
5.9
	
Limitation on Participant’s Rights.

Participation in the Plan 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, 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 Award.

	
5.10
	
Not a Contract of Employment.

Nothing in the Plan, 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.

	
5.11
	
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.

 

156294346 v2 

 

NIGHTSTAR THERAPEUTICS PLC
2017 EQUITY INCENTIVE PLAN

PERFORMANCE RESTRICTED SHARE UNIT GRANT NOTICE

Capitalized terms not specifically defined in this Performance Restricted Share Unit Grant Notice (the “Grant Notice”) have the meanings given to them in the 2017 Equity Incentive Plan (as amended from time to time, the “Plan”) of Nightstar Therapeutics plc (the “Company”).

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

	
Participant:
	
 
	
 

	
Grant Date:
	
 
	
 

	
Number of PRSUs:
	
 
	
 

	
Vesting Commencement Date:
	
 
	
 

	
Vesting Schedule:
	
 
	
[To be specified in individual award agreements]

	
Mandatory Sale to Cover Withholding Taxes:
	
 
	
As a condition to acceptance of this award, to the fullest extent permitted under the Plan and applicable law, withholding taxes and other tax related items will be satisfied through the sale of a number of the shares subject to the Award as determined in accordance with Section 3.2 of the Agreement and the remittance of the cash proceeds to the Company. Under the Agreement, the Company is authorized and directed by the Participant to make payment from the cash proceeds of this sale directly to the appropriate taxing authorities in an amount equal to the taxes required to be withheld. The mandatory sale of shares to cover withholding taxes and tax related items is imposed by the Company on the Participant in connection with the receipt of this Award, and it is intended to comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act and be interpreted to meet the requirements of Rule 10b5-1(c).

156294346 v2 

 

By Participant’s signature below, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, 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, 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, this Grant Notice or the Agreement.

 

	
NIGHTSTAR THERAPEUTICS PLC
	
 
	
PARTICIPANT

	
By:
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Name:
	
 
	
[Participant Name]

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Title:

 
	
 
	
 

 

 

 

156294346 v2 

 

Exhibit A

PERFORMANCE 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.

	
1.
	
GENERAL

	
1.1
	
Award of PRSUs and Dividend Equivalents.

	
 
	
(a)
	
The Company has granted the PRSUs to Participant effective as of the grant date set forth in the Grant Notice (the “Grant Date”). Each PRSU 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 PRSUs have vested.

	
 
	
(b)
	
The Company hereby grants to Participant, with respect to each PRSU, 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 PRSU 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.

The PRSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.

	
1.3
	
Unsecured Promise.

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

	
2.
	
VESTING; FORFEITURE AND SETTLEMENT

	
2.1
	
Vesting; Forfeiture.

The PRSUs will vest according to the vesting schedule in the Grant Notice except that any fraction of an PRSU that would otherwise be vested will be accumulated and will vest only when a whole PRSU has accumulated. In the event of Participant’s Termination of Service for any reason, all unvested PRSUs 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. Dividend Equivalents (including any Dividend Equivalent Account balance) will vest or be forfeited, as applicable, upon the vesting or forfeiture of the PRSU with respect to which the Dividend Equivalent (including the Dividend Equivalent Account) relates.

156294346 v2 

 

	
2.2
	
Settlement.

	
 
	
(a)
	
PRSUs 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 PRSU, but in no event more than sixty (60) days after the PRSU’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.

	
 
	
(b)
	
If an PRSU is paid in cash, the amount of cash paid with respect to the PRSU 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.

	
3.
	
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.

	
 
	
(c)
	
On each vesting date, and on or before the time Participant receives a distribution of the shares underlying the PRSUs, and at any other time as reasonably requested by the Company in accordance with applicable tax laws (including, without limitation, in connection with the payment of any Dividend Equivalent), Participant hereby authorizes any required withholding from the shares issuable to Participant and/or otherwise agree to make adequate provision in cash for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any parent or subsidiary that arise in connection with Participant’s PRSU (the “Withholding Taxes”).  Specifically, pursuant to Section 3.2(b), Participant has agreed to a “same day sale” commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby Participant has irrevocably agreed to sell a portion of the shares to be delivered in connection with Participant’s PRSUs to satisfy the Withholding Taxes and whereby the FINRA Dealer committed to forward the proceeds necessary to satisfy the Withholding Taxes directly to the Company and/or its parents or subsidiaries.  If, for any reason, such “same day sale” commitment pursuant to Section 3.2(b) does not result in sufficient proceeds to satisfy the Withholding Taxes or would be prohibited by applicable law at the applicable time, Participant hereby authorizes the Company and/or the relevant parent or subsidiary, or their respective agents, at their discretion, to satisfy the obligations with regard to all Withholding Taxes by one or a combination of the following: (i) withholding from any compensation otherwise payable to Participant by the Company or any parent or subsidiary; (ii) causing Participant to tender a cash payment (which may be in the form 

156294346 v2 

 

	
 
		
of a check, electronic wire transfer or other method permitted by the Company); or (iii) withholding shares from the shares issued or otherwise issuable to Participant in connection with Participant’s PRSUs with a fair market value (measured as of the date shares are issued to Participant) equal to the amount of such Withholding Taxes; provided, however, that the number of such shares so withheld will not exceed the amount necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates for federal, state, local and, if applicable, foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income; and, provided, further, that to the extent necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will be subject to the prior approval of the Company’s Remuneration Committee.

	
 
	
(d)
	
Participant hereby acknowledges and agrees to the following:

	
 
	
(i)
	
Participant hereby appoints such FINRA Dealer appointed by the Company for purposes of this Section 3.2(b) as Participant’s agent (the “Agent”), and authorize the Agent:

	
 
	
(A)
	
To sell on the open market at the then prevailing market price(s), on Participant’s behalf, as soon as practicable on or after each date on which the shares underlying Participant’s PRSUs vest, the number (rounded up to the next whole number) of the shares to be delivered to Participant in connection with the vesting of those shares sufficient to generate proceeds to cover (A) the Withholding Taxes that Participant is required to pay pursuant to the Plan and this Agreement as a result of the shares vesting (or being issued, as applicable) and (B) all applicable fees and commissions due to, or required to be collected by, the Agent with respect thereto; and

	
 
	
(B)
	
To remit any remaining funds to Participant.

	
 
	
(ii)
	
Participant hereby authorizes the Company and the Agent to cooperate and communicate with one another to determine the number of shares that must be sold pursuant to this Section 3.2(b).

	
 
	
(iii)
	
Participant understands that the Agent may effect sales as provided in this Section 3.2(b) in one or more sales and that the average price for executions resulting from bunched orders will be assigned to Participant’s account. In addition, Participant acknowledges that it may not be possible to sell shares underlying Participant’s PRSUs as provided by in this Section 3.2(b) due to (A) a legal or contractual restriction applicable to Participant or the Agent, (B) a market disruption, or (C) rules governing order execution priority on the national exchange where the shares may be traded. In the event of the Agent’s inability to sell shares underlying Participant’s PRSUs, Participant will continue to be responsible for the timely payment to the Company of all Withholding Taxes and any other federal, state, local and foreign taxes that are required by applicable laws and regulations to be withheld, including but not limited to those amounts specified in this Section 3.2(b).

156294346 v2 

 

	
 
	
(iv)
	
Participant acknowledges that regardless of any other term or condition of this Section 3.2(b), the Agent will not be liable to Participant for (A) special, indirect, punitive, exemplary, or consequential damages, or incidental losses or damages of any kind, or (B) any failure to perform or for any delay in performance that results from a cause or circumstance that is beyond its reasonable control.

	
 
	
(v)
	
Participant hereby agrees to execute and deliver to the Agent any other agreements or documents as the Agent reasonably deems necessary or appropriate to carry out the purposes and intent of this Section 3.2(b). The Agent is a third-party beneficiary of this Section 3.2(b).

	
 
	
(vi)
	
Participant hereby agrees that if Participant has signed the Grant Notice at a time that Participant is in possession of material non-public information, unless Participant informs the Company in writing within five business days following the date Participant ceases to be in possession of material non-public information that Participant is not in agreement with the provisions of this Section 3.2(b), Participant not providing such written determination shall be a determination and agreement that Participant has agreed to the provisions set forth in this Section 3.2(b) on such date as Participant has ceased to be in possession of material non-public information.

	
 
	
(vii)
	
This Section 3.2(b) shall terminate not later than the date on which all withholding taxes arising in connection with the vesting of Participant’s PRSUs have been satisfied.

	
 
	
(e)
	
Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the PRSUs 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 PRSUs or Dividend Equivalents. 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 PRSUs 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 PRSUs or Dividend Equivalents to reduce or eliminate Participant’s tax liability.

	
4.
	
OTHER PROVISIONS

	
4.1
	
Adjustments.

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

156294346 v2 

 

	
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 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, 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 or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement, the PRSUs 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 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.

156294346 v2 

 

	
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.

	
4.9
	
Limitation on Participant’s Rights.

Participation in the Plan 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, 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 PRSUs 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 PRSUs 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 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.

 

156294346 v2 

 

NIGHTSTAR THERAPEUTICS PLC
2017 EQUITY INCENTIVE PLAN[: NON-EMPLOYEE SUB-PLAN]7

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 2017 Equity Incentive Plan[: Non-Employee Sub-Plan] (as amended from time to time, the “Plan”) of Nightstar Therapeutics plc (the “Company”).

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

 

	
Participant:
	
 
	
 

	
Grant Date:
	
 
	
 

	
Number of RSUs:
	
 
	
 

	
Vesting Commencement Date:
	
 
	
 

	
Vesting Schedule:
	
 
	
So long as Participant remains continuously a Service Provider [___]% of the total number of RSUs shall vest on the [____] anniversary of the Vesting Commencement Date and [_____]% of the total number of RSUs shall vest [____] thereafter [and upon a Change in Control the RSUs shall vest in full immediately prior to such Change in Control]8.

[In addition, if a Change in Control occurs and (i) in connection with a Change in Control, the RSUs are assumed or continued by the successor or acquiror entity in such Change in Control or the RSUs are substituted for similar award of the successor or acquiror entity pursuant to Section 8.2(c) of the Plan and (ii) upon or within 12 months following the effective date of such Change in Control, the Company (or its successor or the applicable Subsidiary thereof) Terminates the Service of the Participant without Cause (as defined in the Plan), then, effective as of the date of such Termination of Service any then unvested  RSUs subject to this Award shall become immediately vested.]9

	
	 

	
7 
	
 For consultants, advisers and non-employee directors 

	
8 
	
 “Single-trigger” language for BOD members of Nightstar Therapeutics plc

	
9 
	
 “Double-trigger” language for all Participants except for BOD members of Nightstar Therapeutics plc

	
150403203 v6 
	
 
	
 

 

 

	
Mandatory Sale to Cover Withholding Taxes:
	
 
	
As a condition to acceptance of this award, to the fullest extent permitted under the Plan and applicable law, withholding taxes and other tax related items will be satisfied through the sale of a number of the shares subject to the Award as determined in accordance 

with Section 3.2 of the Agreement and the remittance of the cash proceeds to the Company. Under the Agreement, the Company is authorized and directed by the Participant to make payment from the cash proceeds of this sale directly to the appropriate taxing authorities in an amount equal to the taxes required to be withheld. The mandatory sale of shares to cover withholding taxes and tax related items is imposed by the Company on the Participant in connection with the receipt of this Award, and it is intended to comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act and be interpreted to meet the requirements of Rule 10b5-1(c).

 

By Participant’s signature below, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement. Participant has reviewed the Plan, 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, 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, this Grant Notice or the Agreement.

 

	
NIGHTSTAR THERAPEUTICS PLC
	
 
	
PARTICIPANT

	
By:
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Name:
	
 
	
[Participant Name]

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
Title:

 
	
 
	
 

 

 

 

 

	
150403203 v6 
	
 
	
 

 

 

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.

	
1.
	
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.

The RSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan 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.

	
2.
	
VESTING; FORFEITURE AND SETTLEMENT

	
2.1
	
Vesting; Forfeiture.

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 Service 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. 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.

	
150403203 v6 
	
 
	
 

 

 

	
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.

	
 
	
(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.

	
3.
	
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)
	
On each vesting date, and on or before the time Participant receives a distribution of the shares underlying the RSUs, and at any other time as reasonably requested by the Company in accordance with applicable tax laws (including, without limitation, in connection with the payment of any Dividend Equivalent), Participant hereby authorizes any required withholding from the shares issuable to Participant and/or otherwise agree to make adequate provision in cash for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any parent or subsidiary that arise in connection with Participant’s RSU (the “Withholding Taxes”).  Specifically, pursuant to Section 3.2(b), Participant has agreed to a “same day sale” commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby Participant has irrevocably agreed to sell a portion of the shares to be delivered in connection with Participant’s RSUs to satisfy the Withholding Taxes and whereby the FINRA Dealer committed to forward the proceeds necessary to satisfy the Withholding Taxes directly to the Company and/or its parents or subsidiaries.  If, for any reason, such “same day sale” commitment pursuant to Section 3.2(b) does not result in sufficient proceeds to satisfy the Withholding Taxes or would be prohibited by applicable law at the applicable time, Participant hereby authorizes the Company and/or the relevant parent or subsidiary, or their respective agents, at their discretion, to satisfy the obligations with regard to all Withholding Taxes by one or a combination of the following: (i) withholding from any compensation otherwise payable to Participant by the Company or any parent or subsidiary; (ii) causing Participant to tender a cash payment (which may be in the form 

	
150403203 v6 
	
 
	
 

 

 

	
 
		
of a check, electronic wire transfer or other method permitted by the Company); or (iii) withholding shares from the shares issued or otherwise issuable to Participant in connection with Participant’s RSUs with a fair market value (measured as of the date shares are issued to Participant) equal to the amount of such Withholding Taxes; provided, however, that the number of such shares so withheld will not exceed the amount necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates for federal, state, local and, if applicable, foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income; and, provided, further, that to the extent necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will be subject to the prior approval of the Company’s Remuneration Committee.

	
 
	
(b)
	
Participant hereby acknowledges and agrees to the following:

	
 
	
(i)
	
Participant hereby appoints such FINRA Dealer appointed by the Company for purposes of this Section 3.2(b) as Participant’s agent (the “Agent”), and authorize the Agent:

	
 
	
(A)
	
To sell on the open market at the then prevailing market price(s), on Participant’s behalf, as soon as practicable on or after each date on which the shares underlying Participant’s RSUs vest, the number (rounded up to the next whole number) of the shares to be delivered to Participant in connection with the vesting of those shares sufficient to generate proceeds to cover (A) the Withholding Taxes that Participant is required to pay pursuant to the Plan and this Agreement as a result of the shares vesting (or being issued, as applicable) and (B) all applicable fees and commissions due to, or required to be collected by, the Agent with respect thereto; and

	
 
	
(B)
	
To remit any remaining funds to Participant.

	
 
	
(ii)
	
Participant hereby authorizes the Company and the Agent to cooperate and communicate with one another to determine the number of shares that must be sold pursuant to this Section 3.2(b).

	
 
	
(iii)
	
Participant understands that the Agent may effect sales as provided in this Section 3.2(b) in one or more sales and that the average price for executions resulting from bunched orders will be assigned to Participant’s account. In addition, Participant acknowledges that it may not be possible to sell shares underlying Participant’s RSUs as provided by in this Section 3.2(b) due to (A) a legal or contractual restriction applicable to Participant or the Agent, (B) a market disruption, or (C) rules governing order execution priority on the national exchange where the shares may be traded. In the event of the Agent’s inability to sell shares underlying Participant’s RSUs, Participant will continue to be responsible for the timely payment to the Company of all Withholding Taxes and any other federal, state, local and foreign taxes that are required by applicable laws and regulations to be withheld, including but not limited to those amounts specified in this Section 3.2(b).

	
150403203 v6 
	
 
	
 

 

 

	
 
	
(iv)
	
Participant acknowledges that regardless of any other term or condition of this Section 3.2(b), the Agent will not be liable to Participant for (A) special, indirect, punitive, exemplary, or consequential damages, or incidental losses or damages of any kind, or (B) any failure to perform or for any delay in performance that results from a cause or circumstance that is beyond its reasonable control.

	
 
	
(v)
	
Participant hereby agrees to execute and deliver to the Agent any other agreements or documents as the Agent reasonably deems necessary or appropriate to carry out the purposes and intent of this Section 3.2(b). The Agent is a third-party beneficiary of this Section 3.2(b).

	
 
	
(vi)
	
Participant hereby agrees that if Participant has signed the Grant Notice at a time that Participant is in possession of material non-public information, unless Participant informs the Company in writing within five business days following the date Participant ceases to be in possession of material non-public information that Participant is not in agreement with the provisions of this Section 3.2(b), Participant not providing such written determination shall be a determination and agreement that Participant has agreed to the provisions set forth in this Section 3.2(b) on such date as Participant has ceased to be in possession of material non-public information.

	
 
	
(vii)
	
This Section 3.2(b) shall terminate not later than the date on which all withholding taxes arising in connection with the vesting of Participant’s RSUs have been satisfied.

	
 
	
(c)
	
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. 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.

	
4.
	
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 and the Plan.

	
150403203 v6 
	
 
	
 

 

 

	
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 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, 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 or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, 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 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.

	
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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.

	
4.9
	
Limitation on Participant’s Rights.

Participation in the Plan 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, 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 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.

 

	
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NON-EMPLOYEE SUB-PLAN 

TO THE NIGHTSTAR THERAPEUTICS PLC 2017 EQUITY INCENTIVE PLAN

This sub-plan (the "Non-Employee Sub-Plan") to the Nightstar Therapeutics Plc 2017 Equity Incentive Plan (the “Plan”) governs the grant of Awards to Consultants (defined below) and Directors who are not Employees, and has been adopted in accordance with Section 10.5 of the Plan. The Non-Employee Sub-Plan incorporates all the provisions of the Plan except as modified in accordance with the provisions of this UK Sub-Plan and was adopted by the Board on 12 September 2017. 

Awards granted pursuant to the Non-Employee Sub-Plan are not granted pursuant to an “employees’ share scheme” for the purposes of UK legislation.

For the purposes of the Non-Employee Sub-Plan, the provisions of the Plan shall operate subject to the following modifications: 

	
1.
	
Eligibility

1.1A definition of “Consultant” shall be included as follows:

“Consultant” means any person, including any adviser, engaged by the Company or its parent or Subsidiary to render services to such entity if the consultant or adviser: (i) renders bona fide services to the Company; (ii) renders services not in connection with the offer or sale of securities in a capital-raising transaction and does not directly or indirectly promote or maintain a market for the Company’s securities; and (iii) is a natural person.

1.2The definition of “Service Provider” set out in the Plan shall be read and construed as follows:

“Service Provider” means an Employee, Consultant or Director.

	
2.
	
Shares available for Awards

2.1A definition of “Overall Share Limit” shall be included as follows:

“Overall Share Limit” means 500,000 Shares; 

2.2Section 4 of the Plan shall be replaced with the following wording:

“4.SHARES AVAILABLE FOR AWARDS

4.1Number of Shares 

Subject to adjustment under Section 8 of the Plan and the terms of this Section 4, Awards may be made under the Non-Employee Sub-Plan covering up to the Overall Share Limit. 

	
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4.2Share Recycling. 

If all or any part of an Award granted under the Non-Employee Sub-Plan expires, lapses or is terminated, exchanged for cash, surrendered, repurchased, cancelled without having been fully exercised or forfeited, in any case, in a manner that results in the Company acquiring Shares covered by the Award at a price not greater than the price (as adjusted to reflect any Equity Restructuring) paid by the Participant for such Shares or not issuing any Shares covered by the Award, the unused Shares covered by the Award will become or again be available for Award grants under the Non-Employee Sub-Plan. Further, Shares delivered (either by actual delivery or attestation) to the Company by a Participant to satisfy the applicable exercise or purchase price of an Award and/or to satisfy any applicable tax withholding obligation (including Shares retained by the Company from the Award being exercised or purchased and/or creating the tax obligation) will, as applicable, become or again be available for Award grants under the Non-Employee Sub-Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not count against the Overall Share Limit.”

	
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EXHIBIT 10.8

NIGHTSTARX LIMITED EMPLOYMENT AGREEMENT         

AGREEMENT, dated and entered into as of the 1st day of June, 2017 (“Effective Date”), by and between NightstaRx Limited, a company registered in England and Wales (the “Company”), and Tuyen Ong, (the “Employee”).

WHEREAS, the Company desires to engage the full-time services of the Employee; WHEREAS, the Employee desires to be so employed by the Company; and

WHEREAS, the Company desires to be assured that the unique and expert services of the Employee will be available solely to the Company on such full-time basis, and that the Employee is willing and able to render such services on the terms and conditions hereinafter set forth;

WHEREAS, the Company desires to be assured that the confidential information and good will of the Company will be preserved for the exclusive benefit of the Company.

NOW, THEREFORE, in consideration of such employment and the mutual covenants and promises herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Employee agree as follows:

Section 1.Employment. The Company hereby employs the Employee as an Executive Vice President, Chief Development Officer, and the Employee hereby accepts such employment subject to the terms and conditions hereinafter set forth.

Section 2.Term. The term of employment under this Agreement shall begin on August 7th, 2017, and shall conclude pursuant to Section 7 (the “Term”).

Section 3.Duties. The Employee will report directly to the Chief Executive Officer and shall be responsible for the reasonable duties of an Executive Vice President, Chief Development Officer, including but not limited to, the following: leading, managing and directing the clinical strategy and operations of the company. The Employee will be responsible for the design and execution of all clinical trials, oversee the analysis and interpretation of clinical trial data and reporting of clinical trial results. The Employee will manage the clinical aspects of regulatory submissions and interactions with Health Authorities. The role will be responsible for leading interaction with thought leaders, investigators and patient advocacy groups. This position will represent the company and its programs to external audiences including investors, analysts, the medical community and the biotechnology industry. The Employee will identify, select and validate novel endpoints for use in the rare retinal disease space. The Employee will serve as a business partner and strategic advisor to the CEO and to other members of the top leadership team. The CDO position will interface directly with the Board and the Scientific Advisory Board. The Employee shall perform services in a managerial capacity subject to the general supervision of the Chief Executive Officer. The Employee hereby agrees to devote his full business time and best efforts to the faithful performance of such duties and to the business and affairs of the Company for the Term. Notwithstanding the foregoing, the Employee may serve on other boards of directors, with the approval of the Board, or engage in charitable or other community activities as long as such services and activities are disclosed to the Board and do not materially interfere with the Executive’s performance of his duties to the Company as provided in this Agreement.

 

 

Section 4.Compensation. 

(a)Salary.  In consideration of the services rendered by the Employee under this  Agreement, the Company shall pay the Employee a base salary (the “Base Salary”) at the  annualized rate of four hundred and twenty thousand dollars ($420,000) per calendar year. 

The Base Salary shall be paid in such installments and at such times as the Company pays its regular, salaried employees, and the Company will review and may revise upwards the Base Salary annually in a manner that is consistent with the Company’s policies.

(b)Equity. The Employee shall receive 597,000 of F Ordinary Shares, as defined in the Company’s Articles of Association, (the “Incentive Shares”), which Incentive Shares currently equate to a 1.25% interest in the Company. The F Threshold Amount (as defined in the Company’s Articles of Association) for the Incentive Shares shall be [$4.016]. All Incentive Shares will be issued on or about July 1, 2017 and will vest on a four year linear monthly basis with a one year cliff. The Employee will be required to pay the nominal value of the Incentive Shares (£0.00001 per Incentive Share) at the time of issuance. For income tax purposes, in the event the Incentive Shares are deemed to have a value above the nominal value paid (£.00001) and at or below the F Threshold Amount, and this value is considered taxable income, the Company will reimburse the Employee for the taxable income recognized (including (i) any penalties and interest, and (ii) all costs incurred by Employee, including reasonable attorney’s and/or accountant’s fees, in any audit or similar proceeding with any governmental taxing authority), which reimbursement will be “grossed up” so that all federal and state taxes associated with the reimbursement will be covered by the Company. Any income tax due on proceeds above the F Threshold Amount will be the responsibility of the Employee.

In the event that the Employee’s employment is terminated and such termination is both (A) in anticipation of, upon the consummation of, or within 12 months following, a Change of Control and (B) by the Company without Cause (as defined in Section 7.04) or by you as a result of your resignation for Good Reason (as defined in Section 7.06), then 100% of the then unvested F Ordinary Shares awarded to the Employee under this Section 4(b), and other equity-based incentives that may be granted in the future, will immediately vest and become exercisable upon the date of such termination.

A “Change of Control” is defined as (i) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (ii) a merger, reorganization or consolidation pursuant to which the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the surviving or resulting entity (or its ultimate parent, if applicable), (iii) the acquisition of all or a majority of the outstanding voting stock of the Company in a single transaction or a series of related transactions by a person or entity or group of persons and/or entities, or (iv) any other acquisition of the business of the Company, as determined by the Board; provided, however, that the Company’s Initial Public Offering, any subsequent public offering or any other capital raising event, public or private, or a merger effected solely to change the Company’s domicile shall not constitute a “Change of Control.”

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(c)Reimbursement of Expenses. The Company shall reimburse Employee for reasonable travel, entertainment and other expenses incurred or paid in connection with, or related to the performance of Employee’s duties, responsibilities or services under this Agreement, upon presentation by Employee of documentation, expense statements, vouchers and/or such other supporting information as the Company may request. Employee must submit proper documentation for each such expense within sixty (60) days after the later of (i) his incurrence of such expense or (ii) his receipt of the invoice for such expense. The Company will reimburse Employee for that expense within thirty (30) days after receipt of the documentation.

Section 5.Annual Bonus. The Employee shall be eligible to earn an annual cash bonus of up to 40 % of his Base Salary, subject to (a) objective criteria set forth by the Company’s Board of Directors or an authorized delegate thereof on an annual basis; and (b) the overall performance of the Company, to be determined at the sole discretion of the Company. For clarity, the Employee will be entitled to up to 40% annual bonus or as modified in the Performance Review Calibration Schedule 1 (attached) in each calendar year. The Company confirms the Employee will also be eligible for the pro-rated bonus based on date of hire for the first year. The annual bonus shall be paid in a single lump sum no later than 2.5 months after the end of the calendar year in which the annual bonus, if any, was earned.

A onetime sign on bonus will be paid to the Employee in the first payroll period after he starts employment in the gross sum of $40,000, less applicable withholdings upon hiring.

Section 6.Fringe Benefits. The Employee will be eligible to participate in the Company’s health insurance plans (including medical, dental, and vision coverage, for which the Company will pay 75% of the premium). The Employee will also be entitled to take up to twenty days paid vacation per year, accrued at the rate of 1.66 days per month; such days must be taken in the year accrued, and may not be carried over to subsequent years without prior consent of the CEO. In addition, the Employee will also receive paid holidays subject to the Company’s holiday schedule.

Section 7.Termination. The parties acknowledge that the Employee’s employment with the Company is at-will. The provisions of Sections 7 and 8 govern the amount of compensation and continued benefits, if any, to be provided to the Employee upon termination of employment and do not alter this at-will status. This Agreement shall be terminated as follows:

Section 7.01Death. This Agreement shall terminate upon the death of the Employee, except that the compensation provided in Section 4(a) shall continue through the end of the month in which the Employee’s death occurs.

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Section 7.02Permanent Disability. In the event of any physical or mental disability or incapacity of the Employee rendering the Employee unable to perform the essential functions of his position with or without reasonable accommodation for a period of at least ninety (90) consecutive days and the further determination that such disability is permanent, this Agreement shall terminate automatically. Any determination of disability shall be made by the Company in consultation with a qualified physician or physicians selected by the Company and reasonably acceptable to the Employee. The failure of the Employee to submit to a reasonable examination by such physician or physicians shall preclude any objection by the Employee to the determination of disability by the Company.

Section 7.03By The Company For Cause. The employment of the Employee may be terminated by the Company for Cause (as defined below) at any time effective upon written notice to the Employee. For purposes hereof, the term “Cause” shall mean that the Company has determined that any one or more of the following has occurred: (i) Employee’s willful engagement in , illegal conduct or gross misconduct, which is, in each case, materially injurious to the Company or any affiliate; (ii) Employee’s willful, material and deliberate repeated insubordination;(iii) Employee’s substantial malfeasance or nonfeasance of duty; (iv) Employee’s material unauthorized disclosure of confidential information which is materially injurious to the Company; (v) Employee’s embezzlement, misappropriation or fraud, whether or not related to Employee’s employment with the Company; (vi) Employee’s breach of a material provision of this Agreement or any employment, non-disclosure, invention assignment, non-competition, or similar agreement between Employee and Company, or (v) the Employee shall have been convicted of, or shall have pleaded guilty or nolo contendere to, any felony. In all cases, the Company shall provide Employee with a description of the specific conduct or events that the Company believes constitutes Cause and, in case of (ii), (iii) and (vi) above, Employee shall have thirty (30) days to effect a cure of the claimed conduct or events, and only if the Employee does not cure will he be terminated for Cause .

Section 7.04By The Company Without Cause. The Company may terminate the Employee’s employment at any time without Cause effective upon 30 business days’ written notice to the Employee.

Section 7.05By the Employee Voluntarily. The Employee may terminate this Agreement at any time effective upon at least thirty (30) business days’ prior written notice to the Company.

Section 7.06By the Employee For Good Reason. The Employee may terminate this Agreement for Good Reason. As used herein, “Good Reason” shall mean: (i) relocation of Employee’s principal business location to a location more than fifty (50) miles from Employee’s then-current business location; (ii) a material diminution in Employee’s duties, authority or responsibilities; or (iii) a material reduction in the Employee’s Base Salary or target bonus without the Employee’s consent (other than a reduction generally applicable to all executive employees of the Company); provided that (A) Employee provides Company with written notice that Employee intends to terminate Employee’s employment hereunder for one of the circumstances set forth in this Section 7.06 within thirty (30) days of such circumstance occurring, (B) if such circumstance is capable of being cured, the Company has failed to cure such circumstance within a period of thirty (30) days from the date of such written notice, and (C) Employee terminates Employee’s employment within forty-five days from the date that Good Reason first occurs. For purposes of 

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clarification, the above-listed conditions shall apply separately to each occurrence of Good Reason and failure to adhere to such conditions in the event of Good Reason shall not disqualify Employee from asserting Good Reason for any subsequent occurrence of Good Reason. For purposes of this Agreement, “Good Reason” shall be interpreted in a manner, and limited to the extent necessary, so that it shall not cause, to the extent possible, adverse tax consequences for either party with respect to Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”), and any successor statute, regulation and guidance thereto.

Section 8.Termination Payments and Benefits.

Section 8.01Voluntary Termination by Employee, Termination For Cause By Company, Death, Permanent Disability. Upon any termination of this Agreement: (1) by the Employee, (2) upon the Employee’s Death or Permanent Disability; or (3) by the Company for Cause, all payments, salary and other benefits hereunder shall cease at the effective date of termination, except that in the case of the Employee’s Death, the compensation provided in Section 4(a) shall continue through the end of the month in which the Employee’s death occurs. Further, Employee will be paid his earned and unused vacation pay as required by law as well as his unpaid business expenses pursuant to Company policy.

Section 8.02Termination Without Cause or Good Reason. In the event that this Agreement is terminated by the Company without Cause or by the Employee for Good Reason, and the Employee executes a separation agreement and general release of legal claims in a form provided by the Company, the Company shall pay the Employee as follows:

(a)payment of a pro-rated bonus for the year of termination, through the date of termination, if any established performance or results criteria have been achieved on a pro-rated basis through that date payable on the 60th day after the date of termination; and

(b)severance pay equal to twelve (12) months of Employee’s base salary on the date of termination. Severance will be paid out on monthly basis for 12 months, subject to applicable taxes and withholdings, with the amounts to be paid on the first payroll date within the 60-day period following the date of Employee’s date of termination on which the Employee’s executed release is effective.

(c)for a period of twelve (12) months following the date of termination, if Employee elects COBRA health, dental and vision care continuation coverage, Employee shall be eligible to continue to receive the medical, dental and vision coverage provided by the Company as of the date of termination (or generally comparable coverage) for himself and, where applicable his spouse and dependents, as the same may be changed from time to time for employees of the Company generally provided; that in order to receive such continued coverage, the Company will pay the full cost of such coverage, including any administrative fee, for a 12 month period, or until Employee is eligible for such comparable coverage with a new employer, whichever comes first.

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(d)No payments or benefits payable to Employee upon the termination of Employee’s employment pursuant to this Section shall be made to Employee unless and until Employee executes a general release in a form satisfactory to the Company and such general release becomes effective pursuant to its terms not later than 60 days following Employee’s termination date. Such general release shall be provided to Employee on his termination date and shall not include additional restrictive covenant obligations than the ones stated in this Agreement.

Section 8.03Other Benefits. Except as specifically provided in this Section, the Employee shall not be entitled to any compensation, severance or other benefits from the company or any of its subsidiaries or affiliates upon the termination of his employment for any reason whatsoever.

Section 9.Merger Clause. The Company shall not consolidate, merge or transfer all or a substantial portion of its assets without requiring the transferee to assume this Agreement and the obligations hereunder.

Section 10.Confidentiality, Ownership and Assignment.

Section 10.01Licensed Property; Reservation of Rights. The Company and its respective licensors hereby reserves all rights not specifically and expressly granted hereunder.

Section 10.02Intellectual Property Rights. “Intellectual Property Rights” shall mean, collectively, worldwide Patents, Trade Secrets, Copyrights, Moral Rights, trade names, Trademarks, rights in trade dress and all other intellectual property rights and proprietary rights, whether arising under the laws of the United States or any other state, country or jurisdiction, including all rights or causes of action for infringement or misappropriation of any of the foregoing. “Patents” shall mean all patent rights and all right, title and interest in all letters patent or equivalent rights and applications for letters patent or rights and any reissuing division, continuation or continuation in part application throughout the world. “Trade Secrets” shall mean all right, title and interest in all trade secrets and trade secret rights arising under the common law, state law, U.S. federal law or laws of foreign countries. “Copyrights” shall mean all copyright rights, neighboring and derivative rights, and all other literary property and author rights and all right, title and interest in all copyrights, copyright registrations, certificates of copyright and copyrighted interests throughout the world. “Trademarks” shall mean all trademark and service mark rights arising under the common law, state law, U.S. federal law and laws of foreign countries and all right, title and interest in all trademarks, service marks, trademark and service mark applications and registrations and trademark and service mark interests throughout the world. “Moral Rights” shall mean any rights of paternity or integrity, any right to claim authorship of a work or to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, any work, whether or not such would be prejudicial to the Employee’s honor or reputation, and any similar rights existing under judicial or statutory law of any country in the world, or under any treaty, regardless of whether or not such right is denominated or generally referred to as a “moral” right, and shall include the right of an author to be known as the author of a work; to prevent others from being named as the author of a work; to prevent others from falsely attributing to an author the authorship of a work which he/she has not in fact created; to prevent others from making deforming changes in an author’s work; to withdraw a published work from distribution if it no longer represents the views of the author; and to prevent others from using the work or the author’s name in such a way as to reflect on his/her professional standing.

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Section 10.03Ownership. Ownership of the Intellectual Property Rights in and to the services, Deliverable Items, Milestones, and all derivatives thereof and improvements thereto, including, without limitation, any objects, scenes, artwork, models, textures, names, rules, products, materials, files, effects, reports, data, and any other audio or visual elements associated with each of the foregoing, and compilations or contributions to a collective work (collectively referred to as the “Work”) hereby automatically vests in and is transferred and assigned to the Company in perpetuity as its sole and exclusive property upon and as of the creation, conception, reduction to practice thereof (i.e., from the moment that the applicable Intellectual Property Right first comes into being), or if such events took place prior to the Effective Date, as of the Effective Date. The Employee hereby appoints the Company (or its designee) as its attorney-in-fact to execute any and all documents to effectuate such assignment. Through the Company’s ownership of such Intellectual Property Rights under this Agreement, the Company may make or have made, and accordingly will own all right, title and interest in any other work product and any other derivative works or improvements of any Deliverable Items. The Employee agrees and acknowledges that the Company may utilize the Work in any other software program or printed material or visual representation or license or sell the Work for incorporation into or as a basis for producing other products or otherwise exploiting the Work at the sole discretion of the Company without the payment of any royalty or other fee to the Employee, except for the compensation specifically set forth in this Agreement. Furthermore, the Company may, in its sole discretion, adapt, reproduce, add to, delete from, edit, modify, duplicate, license, display, provide to third parties and otherwise use and exploit the Deliverable Items for any purpose.

Section 10.04Work Made For Hire. The Employee agrees and acknowledges that the Work completed hereunder shall be considered “works made for hire,” that the Employee has no claim to any right, title or interest in the Work supplied to the Company pursuant to the terms of this Agreement or otherwise, and that the Employee will make no claims that the Work infringes upon the copyright or other right, title or interest of the Employee and that the Work shall, upon creation, be owned exclusively by the Company and be and hereby is assigned to the Company.

Section 10.05Retained Rights. If and to the extent the Employee may, under applicable law, the Employee is deemed to have retained any right, title or interest in or to any portion of the Work notwithstanding the other provisions of this Section 10, the Employee hereby transfers, grants, conveys, assigns and relinquishes solely and exclusively to the Company all of the Employee’s right, title and interest in and to the Work, without reservation and without additional consideration, under applicable Patent, Copyright, Trade Secret, Trademark and other similar laws or rights, in perpetuity, and in the alternative to the extent such assignment is ineffective under applicable law, the Employee hereby grants to the Company, its successors and assigns, a sole and exclusive, irrevocable, worldwide, paid-up license to reproduce, fix, adapt, modify, translate, create derivative works from, manufacture, introduce into circulation, publish, distribute, sell, license, sublicense, transfer, rent, lease, transmit or provide access electronically, broadcast, display, perform, enter into computer memory, and use and practice the Work, all modified and derivative works thereof, all portions and copies thereof in any form, all inventions, designs, and marks embodied therein, and all Intellectual Property Rights in and to the Work.

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Section 10.06Moral Rights. The Employee hereby irrevocably transfers and assigns to the Company any and all Moral Rights that the Employee may have in the Work. To the extent such Moral Rights cannot be assigned under applicable law and to the extent the following is allowed by the laws in the various countries where Moral Rights exist, the Employee also hereby forever waives and agrees never to assert any and all Moral Rights it may have in the Work, even after termination of the Employee’s work on behalf of the Company or this Agreement.

Section 10.07Execution of Documents. The Employee will cooperate with the Company, at the Company’s expense, in obtaining Patent, Copyright, Trademark or other statutory protections for the Work, in each country in which it, or derivatives thereof or improvements thereto, is sold, distributed or licensed and in taking any enforcement action, including any public or private prosecution, to protect the Company’s Intellectual Property Rights in and to the Work, the Employee hereby grants the Company the exclusive right, and appoints the Company (or its designee) as attorney-in-fact, to execute and prosecute in the Employee’s name as author or inventor or in the Company’s (or its designee’s) name as assignee any application for registration or recordation of any Copyright, Trademark, Patent or other right in or to the Work, and to undertake any enforcement action with respect to the Work. The Employee will execute such other documents of registration and recordation as may be necessary to perfect in the Company, or protect, the rights assigned to the Company hereunder in each country in which the Company reasonably determines to be prudent.

Section 10.08Survival. The provisions of this Section 10 shall survive any expiration or termination of this Agreement.

Section 10.09Confidentiality. In the course of performing this Agreement, the Employee may learn (or may have previously learned of) non-public, confidential or proprietary information of the Company (including their respective licensors or business partners), and their respective businesses, including, but not limited to, information developed and relating to products and services of the Company, customers, pricing, know-how, processes, and practices (collectively “Confidential Information”). The Employee will keep confidential and not disclose to third parties the Confidential Information, and shall not use any such Confidential Information for its own benefit or for the benefit of any third party, and shall use such Confidential Information solely for purposes of performing its obligations under this Agreement. It is understood, however, that the restrictions listed above shall not apply to any portion of the Confidential Information which: (a) was previously known to the Employee without obligations of confidentiality; (b) is obtained by the Employee after the effective date of this Agreement from a third party which is lawfully in possession of such information and not in violation of any contractual or legal obligation to the Company with respect to such information; or (c) is or becomes part of the public domain through no fault of the Employee. The Employee may disclose Confidential Information if and to the extent it is approved for release by written authorization of the Company or it is required to do so by administrative or judicial action (provided that the Employee immediately after receiving notice of such action notifies the Company of such action to give it the opportunity to seek any other legal remedies to maintain such Confidential Information in confidence). Should the Company need to enforce this provision, it shall not be required to post a bond before obtaining an injunction. At the termination of this Agreement, or earlier upon the completion of the services hereunder or the written request of the Company, and subject to the other provisions of this Agreement, the Employee shall return or destroy all drawings, specifications, manuals and other printed or 

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reproduced material (including information stored on machine readable media) related to any Work created hereunder as well as all other materials embodying any Confidential Information in its possession. Any and all Work produced under this Agreement by the Employee shall be deemed to be Confidential Information of the Company.

Section 10.10Publicity. No publicity or public announcements by the Employee regarding this Agreement, the Work or the business relationship set forth herein shall be made without the prior written consent of the Company.

Section 11.Restrictions on Activities of the Employee.

Section 11.01Acknowledgements. The Employee agrees that he is being employed hereunder in a key capacity with the Company and that the Company is engaged in a highly competitive business and that the success of the Company’s business in the marketplace depends upon its goodwill and reputation for quality and dependability. The Employee agrees that reasonable limits may be placed on his ability to compete against the Company as provided herein so as to protect and preserve the legitimate business interests and good will of the Company. The Employee further agrees that the Employee’s responsibilities, duties, position, compensation, title and/or other terms and conditions of employment may change from time to time and, notwithstanding any change in any terms and conditions of employment, this Agreement, including but not limited to this Section 11, shall remain in full force and effect;

Section 11.02General Restrictions.

(a)During the Term and the Non-Competition Period (as defined below), the Employee will not (anywhere in the world where the Company or any of its subsidiaries or affiliates then conducts business) engage or participate in, directly or indirectly, as principal, agent, employee, employer, consultant, investor or partner, or assist in the management of, or own any stock or any other ownership interest in, any business which is Competitive with the Company (as defined below). For purposes of this Agreement, a business shall be considered “Competitive with the Company” if it is engaged in the business of developing ophthalmic gene therapies for inherited retinal diseases. Notwithstanding the foregoing, the Employee may own, directly or indirectly, less than 1% of the capital stock of any public corporation.

(b)For purposes of this Agreement the “Non-Competition Period” shall mean the period of six (6) consecutive months after the Employee’s employment terminates for any reason.

Section 11.03Employees, Customers and Suppliers. 

(a)During the Term and the Non-Solicitation Period, the Employee will not solicit, or attempt to solicit, any officer, director, consultant, executive or employee of the Company or any of its subsidiaries or affiliates to leave his or her engagement with the Company or such subsidiary or affiliate, or hire or engage any officer, director, consultant, executive or employee of the Company or any of its subsidiaries or affiliates in any capacity, nor will he call upon, solicit, divert or attempt to solicit or divert from the Company or any of its affiliates or subsidiaries any of their customers or suppliers, or potential customers or suppliers, or of whose names he was aware during his employment with the Company; provided, however, that nothing in this Section shall be deemed to prohibit the Employee from calling upon or soliciting a customer or supplier during the Non-Solicitation Period if such action relates solely to a business which is not competitive with the Company.

9

 

(b)For purposes of this Agreement the “Non-Solicitation Period” shall mean the period of twelve (12) consecutive months after the Employee’s employment terminates for any reason.

Section 11.04THE EMPLOYEE REPRESENTS AND WARRANTS THAT THE KNOWLEDGE, SKILLS AND ABILITIES HE POSSESSES AT THE TIME OF COMMENCEMENT OF EMPLOYMENT HEREUNDER ARE SUFFICIENT TO PERMIT HIS EMPLOYMENT HEREUNDER, TO EARN A LIVELIHOOD SATISFACTORY TO HIMSELF WITHOUT VIOLATING ANY PROVISION OF SECTION 10 OR 11 HEREOF, FOR EXAMPLE, BY USING SUCH KNOWLEDGE, SKILLS AND ABILITIES, OR SOME OF THEM, IN THE SERVICE OF A NON-COMPETITOR. THE EMPLOYEE FURTHER REPRESENTS AND WARRANTS THAT HIS ABILITY SO TO EARN A LIVELIHOOD SATISFACTORY TO HIMSELF DOES NOT DEPEND UPON HIS SERVICES AT, OR IN EXCESS OF, THE LEVEL AT WHICH HE IS COMPENSATED BY THE COMPANY.

Section 12.Remedies. It is specifically understood and agreed that any breach of the provisions of Section 10 or 11 of this Agreement is likely to result in irreparable injury to the Company and that the remedy at law alone will be an inadequate remedy for such breach, and that in addition to any other remedy it may have, the Company shall be entitled to enforce the specific performance of this Agreement by the Employee and to seek both temporary and permanent injunctive relief (to the extent permitted by law) without the necessity of proving actual damages.

Section 13.Severable Provisions. The provisions of this Agreement are severable and the invalidity of any one or more provisions shall not affect the validity of any other provision. In the event that a court of competent jurisdiction shall determine that any provision of this Agreement or the application thereof is unenforceable in whole or in part because of the duration or scope thereof, the parties hereto agree that said court in making such determination shall have the power to reduce the duration and scope of such provision to the extent necessary to make it enforceable, and that the Agreement in its reduced form shall be valid and enforceable to the full extent permitted by law.

Section 14.Notices. All notices hereunder, to be effective, shall be in writing and shall be delivered by hand or mailed by certified mail, postage and fees prepaid, as follows:

		
	
If to the Company:
	
NightstaRx Limited

215 Euston Road 

London, UK NW1 2BE 

Attn: David Fellows

	
 
	
 

	
Copy to:
	
Mary Beth Kerrigan, Esq.

Morse, Barnes-Brown & Pendleton, P.C.

CityPoint

230 Third Avenue, 4th Floor

Waltham, MA 02451

	
 
	
 

	
If to the Employee:
	
Tuyen Ong

Address

10

 

or to such other address as a party may notify the other pursuant to a notice given in accordance with this Section 14.

Section 15.Mediation and Arbitration.

Section 15.01Mediation. In the event of a dispute regarding any of the terms and conditions of this Agreement, or otherwise relating to the Employee’s employment with the Company, either party may request that the other party engage in a mediation to resolve such dispute. If such request is made, the other party shall respond in writing by no later than seven (7) business days thereafter, stating whether such other party is willing to participate in such mediation, and such mediation shall occur within thirty (30) days following such notification. If the parties are unable to agree to a mediator, then the matter shall be submitted to the mediation program conducted by the American Arbitration Association in Boston, Massachusetts and a mediator shall be selected pursuant to the rules applicable to such program.

Section 15.02Arbitration. 

(a)In the event that the other party declines to participate in a mediation, if no mediation has been requested, or if mediation has not resulted in resolution of the dispute, either party may require that the dispute be submitted to binding arbitration, and in such event the dispute shall be settled by arbitration in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association, except that both parties agree that the matter shall be submitted to and resolved by a single arbitrator. Such arbitration shall occur in Boston, Massachusetts. Each party hereby agrees to a speedy hearing upon the matter in dispute and the judgment upon the award rendered by the arbitrator may be entered in a court as set forth in this Section. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to limit the Company’s right to seek immediate judicial relief in the event of a claimed breach by the Employee of his obligations in Sections 10 and/or 11 of this Agreement.

(b)Each party shall pay its own costs for the arbitration including, but not limited to, arbitrator or adjudication fees (arbitrator fees to be split equally between the parties), attorneys’ fees, witnesses’ fees, transcripts, and other expenses. The prevailing party in any arbitration shall be entitled to recover its reasonable attorneys’ fees and costs where authorized by contract or statute.

(c)The Employee understands that by signing this Agreement, the Employee agrees to submit any claims arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach or termination thereof, or his employment or the termination thereof, to binding arbitration, and that this arbitration provision constitutes a waiver of the Employee’s right to a jury trial and relates to the resolution of all disputes relating to all aspects of the employer/employee relationship, including but not limited to the following:

(i)Any and all claims for wrongful discharge of employment, breach of contract, both express and implied; breach of the covenant of good faith and fair dealing, both express and implied; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic advantage; and defamation;

11

 

(ii)Any and all claims for violation of any federal, state or municipal statute, including, without limitation, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Equal Pay Act, the Employee Retirement Income Security Act, as amended, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, the Fair Labor Standards Act, and the Massachusetts Fair Employment Practices Act; and

(iii)Any and all claims arising out of any other federal, state or local laws or regulations relating to employment or employment discrimination.

(d)This Agreement shall be governed by and construed in accordance with the substantive laws of the Commonwealth of Massachusetts, without giving effect to any choice or conflict of law  provision or rule, and any legal action permitted by this Agreement to enforce an award under this Section or for a claimed breach by the Employee of his obligations in Sections 10 and/or 11 of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts and shall be commenced and maintained solely in any state or federal court located in the Commonwealth of Massachusetts, and both parties hereby submit to the jurisdiction and venue of any such court.

Section 16.Miscellaneous. 

Section 16.01Modification. This Agreement constitutes the entire Agreement between the parties hereto with regard to the subject matter hereof, superseding all prior understandings and agreements, whether written or oral. This Agreement may not be amended or revised except by a writing signed by the parties.

Section 16.02Assignment and Transfer. This Agreement shall not be terminated by the merger or consolidation of the Company with any corporate or other entity or by the transfer of all or substantially all of the assets of the Company to any other person, corporation, firm or entity. The provisions of this Agreement shall be binding on and shall inure to the benefit of any such successor in interest to the Company. Neither this Agreement nor any of the rights, duties or obligations of the Employee shall be assignable by the Employee, nor shall any of the payments required or permitted to be made to the Employee by this Agreement be encumbered, transferred or in any way anticipated.

Section 16.03Captions. Captions herein have been inserted solely for the convenience of reference and in no way define, limit or describe the scope or substance of any provision of this Agreement.

12

 

Section 16.04Tax Treatment. This Agreement is intended to be in compliance with the requirements of Section 409A of the Internal Revenue Code of 1986 (“Code Section 409A”) to the extent it is not exempt from those requirements, and shall be effected and construed accordingly. The phrase “termination of employment” and words and phrases of similar impact mean a “separation from service” with the Company within the meaning of Code Section 409A. Any payments or distributions to be made to Employee under this Agreement upon a separation from service of amounts classified as “nonqualified deferred compensation” for purposes of Code Section 409A, payable due to a separation from service and not exempt from Code Section 409A, shall in no event be made or commence until 6 months after such separation from service if Employee is a specified employee (as defined in Code Section 409A) of a public company. Each payment or installment under this Agreement shall be treated as a separate payment for purposes of Code Section 409A. If Employee is entitled to any reimbursement of expenses or in-kind benefits that are includable in Employee’s federal gross taxable income, the amount of such expenses reimbursable or in-kind benefits provided in any one calendar year shall not affect the expenses eligible for reimbursement or the in-kind benefits to be provided in any other calendar year, and the reimbursement of an eligible expense must be made no later than December 31 of the year after the year in which the expense was incurred. Notwithstanding anything herein, the Company shall not be liable to Employee for any tax liability, including liability under Code Section 409A, incurred by Employee as a result of any payment of compensation made to Employee under this Agreement or otherwise.

Section 16.05Defend Trade Secrets Act of 2016 Notice. Notwithstanding any provision in this Agreement, an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, provided that such filing is made under seal. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, provided that the individual (A) files any document containing the trade secret under seal and (B) does not disclose the trade secret, except pursuant to court order.

Section 16.06Governing Law. This Agreement shall be construed under and enforced in accordance with the laws of the Commonwealth of Massachusetts.

Section 16.07Conditions. Employment is contingent upon the Employee providing satisfactory documentation to the Company concerning his employment eligibility as required by Congress under applicable immigration laws. This documentation must be received by the Company within three (3) business days of the Effective Date. Employment is also contingent upon the Company’s completion of a satisfactory investigation of the Employee’s background. The Employee agrees to release the Company, its employees and agents and any individuals who may provide the Company with information regarding the Employee’s background and references from any liability in connection with this investigation.

13

 

Section 17.Withholding; Payment of Taxes. 

Section 17.01U.S. Income Tax Withholding. The Company shall withhold from Employee’s compensation from the Company and remit to U.S. federal, state, local, or foreign taxing authorities any income taxes and any other amounts that may be required to be remitted pursuant to U.S. federal, state, local laws, or foreign laws and regulations.

Section 17.02UK Taxes. The Company shall remit, as such taxes become due, any income taxes required by the laws of the United Kingdom (the “UK”) to be paid or withheld from Employee’s compensation in respect of Employee’s services for the Company in the UK. For purposes of this Section 17.2, income tax shall mean any income taxes, and any other charges, fees, assessments or any other taxes that may be assessed by UK taxing authorities on Employee’s compensation from the Company pursuant to any law of the UK or governmental regulation thereunder. Notwithstanding the foregoing, social security and Medicare taxes shall be remitted to the United States government, and the Company and Employee shall complete all applicable documentation required to exempt Employee from UK social security taxes.

Section 18.Tax Equalization/Tax Indemnity.

Section 18.01Generally. The Company agrees that it shall indemnify Employee for any additional taxes incurred by him as a result of Employee performing services for the Company and its affiliates in the United Kingdom, such that Employee will not incur a greater combined U.S. federal, state, local and United Kingdom income tax expense in respect of his compensation from the Company than he would have if he were performing his services for the Company and its affiliates entirely in the United States during each year or partial year of his employment with the Company. Employee’s total compensation under this Agreement will be adjusted to fulfill the tax indemnity provisions of this paragraph (any additional amount payable by the Company to Employee pursuant to this paragraph 18 being a “Tax Indemnity Amount”). The Company shall also pay or reimburse Employee for the cost of preparing his U.S. federal, state, local and United Kingdom income tax returns by an accounting firm in order to implement this paragraph 18. If such income tax return preparation expenses are reimbursed such reimbursement shall be made no later than December 31 of the year following the year in which the expense is incurred by Employee.

Section 18.02Tax Indemnity Adjustments. 

(a)Any Tax Indemnity Amount payable to Employee pursuant to this paragraph 18 shall be paid promptly following a determination that such amount is due and in any event, no later than the end of the second calendar year beginning after the calendar year in which the Employee’s U.S. federal income tax return is required to be filed (including any extensions) for the year to which the compensation subject to the tax neutrality/tax indemnify payment relates, or, if later, the second calendar year beginning after the latest such calendar year in which the Employee’s foreign tax return or payment is required to be filed or made for the year to which the compensation subject to the tax neutrality/tax indemnity payment relates. Where such additional payments arise due to an audit, litigation or similar proceeding, the payments shall be scheduled and made in accordance with the provisions of Treas. Reg. §1.409A-3(i)(1)(v) (relating to the timing of tax gross-up payments).

14

 

(b)If for any UK income tax year, (i) amounts withheld from Employee’s compensation by the Company to satisfy applicable UK withholding obligations in respect of Employee’s services in the UK are insufficient to cover such withholding obligations (the “Insufficiency Amount”), and (ii) Employee will receive a foreign tax credit on his U.S. foreign tax return for such withholdings and for any additional amounts Employee pays to the Company or to the United Kingdom tax authorities to cover such insufficiency such that, as a result, Employee will not incur a greater combined U.S. federal, state, local, and United Kingdom income tax expense in respect of his compensation from the Company than he would have if he were performing his services for the Company and its affiliates entirely in the United States during each year or partial year of his employment with the Company. Employee shall pay the Insufficiency Amount (or, if less, the part of the Insufficiency Amount such that Employee would not incur a greater combined U.S. federal, state, local, and United Kingdom income tax expense in respect of his compensation from the Company than he would have if he were performing his services for the Company and its affiliates entirely in the United States during each year or partial year of his employment with the Company) to the Company within 60 days after the Insufficiency Amount is determined, including without limitation, for the 2015/2016 UK tax year. Employee shall not be liable to the Company for any penalties, interest or other liabilities assessed by UK taxing authorities against the Company for its failure to withhold sufficient amounts from Employee’s compensation.

Section 19.Limitation on Benefits . The Company will make the payments under this Agreement without regard to whether the deductibility of such payments (or any other payments or benefits) would be limited or precluded by Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and without regard to whether such payments would subject Executive to the federal excise tax levied on certain “excess parachute payments” under Section 4999 of the Code (the “Excise Tax”); provided, however, that if the Total After-Tax Payments (as defined below) would be increased by the reduction or elimination of any payment and/or other benefit (including the vesting of the options) under this Agreement, then the amounts payable under this Agreement will be reduced or eliminated as follows, if possible: (i) first, by reducing or eliminating any cash payments or other benefits (other than the vesting of the options) and (ii) second, by reducing or eliminating the vesting of that options that occurs as a result of such Change in Control (as provided above), to the extent necessary to maximize the Total After-Tax Payments. The Company’s independent, certified public accounting firm (the “Accounting Firm”) will determine whether and to what extent payments or vesting under this agreement are required to be reduced in accordance with the preceding sentence. For purposes of this Agreement, “Total After-Tax Payments” means the total of all “parachute payments” (as that term is defined in Section 280G(b)(2) of the Code) made to or for the benefit of Employee (whether made under the Agreement or otherwise) by the Company or any of its affiliates, after reduction for all applicable federal state and local income taxes, employment, social security and Medicare taxes, the imposition of the Excise Tax and all other taxes, determined by applying the highest marginal rate under Section 1 of the Code and under state and local laws which applied (or is likely to apply) to the Employee’s taxable income for the tax year in which the transaction which causes the application of Section 280G of the Code occurs, or such other rate(s) as the Accounting Firm determines to be likely to apply to the Employee in the relevant tax year(s) in which any of the parachute payments is expected to be made) than if the Employee received all of the parachute payments. The Company agrees to pay for all costs associated with the Accounting Firm and the determination of the payments or vesting required to be reduced and for the avoidance of doubt, 

15

 

shall not be required to pay any taxes, penalties, interest or other expenses to which Employee may be subject. If it is ultimately determined (by IRS private letter ruling or closing agreement, court decision or otherwise) that Employee parachute payments were reduced by too much or by too little in order to accomplish the purpose of this Section 5.6, the Employee and the Company shall promptly cooperate to correct such underpayment or overpayment in a manner consistent with the purpose of this Section 5.6.

16

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as a sealed instrument as of the day and year first above written.

 

	
By:
	
NIGHTSTARX LIMITED

	
 
	
 

	
/s/ David Fellows

	
 
	
David Fellows

	
 
	
CEO

	
 
	
 

	
/s/ Tuyen Ong

	
 
	
Tuyen Ong

	
 
	
Employee

 

17

 

Schedule 1

	
Performance Review Calibration

	
Rating

	
1 = Major  Improvement Needed 
(0 - 1.4)
	
2 = Some Improvement Needed 
(1.5 – 2.4)
	
3 = Meets Expectations (2.5 - 3.4)
	
4 = Often Exceeds Expectations 
(3.5 - 4.4)
	
5 = Consistently Exceeds Expectations 
(>4.5)

	
 
	
 
	
 
	
 
	
 

	
Salary Adjustment

	
0%
	
<1%
	
1-2%
	
2-3%
	
3-4%

	
Bonus

	
(% of Target)
	
 
	
 
	
 
	
 

	
0%
	
5-25%
	
26-60%
	
61-89%
	
90-100%

 

18

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