Document:

Exhibit 10.9

 

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

2014 EQUITY INCENTIVE PLAN

 

Section 1

Title

 

This Plan shall be known as the Biohaven Pharmaceutical Holding Company Ltd. 2014 Equity Incentive Plan.

 

Section 2

Purpose

 

The purpose of the Plan is to advance the interests of the Company by providing key employees and certain other persons with opportunities to participate in the ownership of the Company and its future growth through (a) the grant of options which qualify as “incentive stock options” under Section 422(b) of the Code; (b) the grant of options which do not qualify as ISOs and (c) other stock based awards.

 

Section 3

Definitions

 

As used in the Plan, the following capitalized words shall have the meanings indicated:

 

3.1          “Award” means, individually or collectively, a grant under the Plan of Options or Restricted Shares, or any other equity-based Award made pursuant to Section 9 below.

 

3.2          “Award Agreement” means the written agreement setting forth the terms and provisions applicable to an Award granted under the Plan, including any Option or Restricted Share agreement.

 

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

 

3.4          “Code” means the Internal Revenue Code of 1986, as amended.

 

3.5          “Committee” means the Compensation Committee of Board.

 

3.6          “Common Shares” means the Company’s common shares of no par value each.

 

3.7          “Company” means Biohaven Pharmaceutical Holding Company Ltd., a BVI business company incorporated and existing under the laws of the Territory of the British Virgin Islands, any successor thereto and any parent and all present and future subsidiaries of the Company as defined in Sections 424(e) and 424(f) of the Code.

 

3.8          “Disability” means “disability,” as such term is defined in Section 22(e)(3) of the Code.

 

3.9          “Disqualifying Disposition” means any disposition (within the meaning of Section 424(c) of the Code) of Shares acquired upon the exercise of an ISO before the later of (a) two years after the Participant was granted the ISO or (b) one year after the Participant acquired the Shares by exercising the ISO.

 

3.10        “Fair Market Value” means, with respect to a Share as of any date of determination, in the discretion of the Committee, (i) the average (on that date) of the high and low prices of the Common Shares on the principal national securities exchange on which the Common Shares are traded, if the Common Shares are then traded on a national securities exchange; or (ii) the last reported sale price (on that date) of the Common Shares on the NASDAQ Stock Market, if the Common Shares is not then traded on a national securities exchange; or (iii) the closing bid price (or average of bid prices) last quoted (on that date) by an established quotation service for over-the-counter securities, if the Common Shares is

 

 

not reported on the NASDAQ Stock Market; or (iv) if Shares are not publicly traded, the fair market value of such Share as determined by the Board in good faith  based on the reasonable application of a reasonable valuation method not inconsistent with Section 409A of the Code.

 

3.11        “Grant Date” means the effective date of an Award as specified by the Committee and set forth in the applicable Award Agreement.

 

3.12        “Incentive Share Option” or “ISO” means an option to purchase Shares awarded to a Participant under Section 7 of the Plan that is intended to meet the requirements of Section 422 of the Code.

 

3.13        “Initial Public Offering” means the first public offering of the Company’s equity securities registered under the Securities Act, or any successor statute, or such other event as a result of which outstanding equity securities of the Company (or any successor entity) shall be publicly traded.

 

3.14        “Non-Qualified Option” or “NQO” means an option to purchase Shares awarded to a Participant under Section 7 of the Plan that is not intended to be an ISO.

 

3.15        “Option” means an ISO or an NQO.

 

3.16        “Participant” means an individual or entity selected by the Committee to receive an Award under the Plan.

 

3.17        “Plan” means the Biohaven Pharmaceutical Holding Company Ltd. 2014 Equity Incentive Plan set forth in this document and as hereafter amended from time to time in accordance with Section 12.

 

3.18        “Restricted Shares” means Shares awarded to a Participant under Section 8 of the Plan pursuant to an Award that entitles the Participant to acquire Shares for a purchase price (which may be zero if permissible under applicable law), subject to such conditions as the Committee may determine to be appropriate, including a Company right during a specified period or periods to repurchase the Shares at their original purchase price (or to require forfeiture of the Shares if the purchase price was zero and if permissible under applicable law) upon conditions specified in connection with the Award.

 

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

 

3.20        “Shares” means the Common Shares.

 

Section 4

Administration

 

4.1          Administrator.  The Plan shall be administered by the Committee, or if there is no Committee, by the Board. All references in this Plan to the “Committee” shall mean the Board if no Committee has been appointed.

 

4.2          Duties of Administrator.  Subject to ratification of the grant or authorization of each Award by the Committee (if so required by applicable state law), and subject to the terms of the Plan, the Committee shall have the authority to (i) determine to whom (from among the class of persons eligible under Section 5 to receive Awards) Awards shall be granted; (ii) determine the time or times at which Awards shall be granted; (iii) determine the purchase price of Shares subject to each Award, (iv) determine whether each Option granted shall be an ISO or a NQO; (v) determine the time or times when each Award shall become exercisable and the duration of the exercise period; (vi) determine any other

 

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provisions applicable to the Award and the Common Shares issuable upon exercise thereof; (vii) interpret the Plan and prescribe and rescind rules and regulations relating to it; and (viii) make all other determinations necessary or advisable for administration of the Plan.  The interpretation and construction by the Committee of any provisions of the Plan or of any Award granted under it shall be final and conclusive unless otherwise determined by the Committee.  The Committee may from time to time adopt such rules and regulations for carrying out the Plan as it may deem advisable.  No member of the Board or the Committee nor any officer, director, employee or agent of the Company shall be liable for any action or determination made in good faith with respect to the Plan or any Award granted under it.

 

Section 5

Eligibility

 

The Committee may grant Awards to those employees, officers, directors, consultants and advisors whom the Committee, in its sole discretion, identifies as being in a position which enables such individuals to contribute to the continued growth, development and future financial success of the Company.  A director, officer or other person who is not also an employee of the Company shall not be eligible to receive an ISO.  The granting of any Award to any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant of Awards.

 

Section 6

Shares Reserved For Awards

 

6.1          Aggregate Number of Shares Available for Awards.  Subject to adjustment as provided in Section 10, the maximum number of Shares to be reserved for issuance under the Plan as Awards, including Incentive Share Options, shall be 4,000 Shares.  Any or all of the Shares subject to Awards under the Plan may be authorized but unissued Shares, or issued Shares that have been or shall have been reacquired by the Company, as the Board may from time to time determine.

 

6.2          Lapsed, Forfeited or Expired Awards.  If any Award granted under the Plan shall expire or terminate for any reason without having been exercised in full or shall cease for any reason to be exercisable in whole or in part, the unpurchased shares subject to such Award shall again be available for grants of Awards under the Plan unless the Plan shall have been terminated.

 

Section 7

Share Options

 

7.1          Grant of Options.  Subject to the limitations of the Plan, the Committee may, after consultation with and consideration of the recommendations of management and the Board as the Committee deems desirable, select those individuals to be granted Options and determine the time when each such Option shall be granted and such other terms of each Option.  The Committee shall clearly designate and identify each Option at the time it is granted as either an ISO or a Non-Qualified Option, as the case may be.  The Grant Date of an Option under the Plan will be the date specified by the Committee at the time it grants the Option; provided, however, that such date shall not be prior to the date on which the Committee acts to approve the grant.  ISOs may be granted only to persons who are employees of the Company on the Grant Date.  The Company shall have no liability to a Participant or to any other party if an Option (or any portion thereof) that is intended to be an ISO is determined not to be an ISO (including, without limitation, due to the determination that the exercise price per share of the Option was less than the Fair Market Value per share as of the Grant Date).  The Committee may grant both ISOs and NQOs to the same employee, and the exercise of one such Option does not in any way affect the employee’s right to exercise the other.  Each recipient of an Option shall execute an option agreement in such form not

 

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inconsistent with the Plan as may be approved by the Board of Directors from time to time.  Such Option agreements may differ among recipients.

 

7.2          Exercise Price.  Unless the Committee determines otherwise, the exercise price specified in the Option Agreement relating to each Option granted under the Plan shall be not less than one hundred percent (100%) of the Fair Market Value on the Grant Date.  In the case of an ISO, the exercise price of an ISO shall be not less than 100% of the Fair Market Value on the Grant Date; provided, however, that if on the Grant Date, the Participant owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or any parent or subsidiary, the exercise price per share specified in the agreement relating to such ISO shall not be less than one hundred ten percent (110%) of the Fair Market Value per Common Share on the Grant Date.

 

7.3          Exercise of Options.  Options shall become exercisable at such time or times as shall be determined by the Committee at or after the Grant Date.  The Committee may at any time accelerate the exercisability of all or any portion of any Option.

 

7.4          Method of Exercise.  An Option (or any part or installment thereof) shall be exercised by giving written notice to the Company at its principal office address, or to such transfer agent as the Company shall designate.  Such notice shall identify the Option being exercised and specify the number of shares as to which such Option is being exercised, accompanied by full payment of the purchase price therefore either (a) in United States dollars in cash or by check, (b) subject to the Committee’s discretion at the time of exercise, by the Optionee’s full recourse promissory note in a form approved by the Committee, provided, however, that the interest rate borne by such note shall not be less than the lowest applicable federal rate, as defined in Section 1274(d) of the Code, (c) subject to the Committee’s discretion, if the class of Common Shares is registered under the Securities Exchange Act of 1934 at such time, delivery of a properly executed exercise notice together with irrevocable instructions to a broker to deliver to the Company promptly the amount of the proceeds of the sale of all or a portion of the Option Shares or of a loan from the broker to the Optionee required to pay the exercise price, (d) by tender to the Company of Common Shares owned by the Optionee, having a Fair Market Value on the date of tender not less than the exercise price, (e) by retention of shares from the Award being exercised having a Fair Market Value on the date of exercise not less than the exercise price, or (f) at the discretion of the Committee, by any combination of the above.

 

7.5          Option Term.  The term of each Option shall be fixed by the Committee and shall be specified in the agreement pursuant to which an Option is issued; provided, however, that no Option shall be exercisable more than ten (10) years after the Option’s Grant Date, provided, further, that if an ISO is granted to an Participant who, together with persons whose share ownership is attributed to the Participant pursuant to Section 424(d) of the Code, owns shares possessing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company, the ISO may not be exercised after the expiration of five (5) years from the Grant Date.

 

7.6.         Annual Limit on Incentive Share Options.  Each eligible employee may be granted Options treated as ISOs only to the extent that, in the aggregate under this Plan and all incentive share option plans of the Company, ISOs do not become exercisable for the first time by such employee during any calendar year with respect to shares having a Fair Market Value (determined at the time the ISOs were granted) in excess of $100,000. The Company shall designate any Options granted in excess of such limitation as NQOs appropriately granted under this Plan or any incentive share option plan of the Company, or under any combination thereof, provided that such options otherwise meet the applicable plan’s requirements relating to NQOs.

 

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7.7          Termination of Employment, Death and Disability

 

7.7.1       ISO.  Unless otherwise specified in the agreement relating to such ISO, if a Participant ceases to be employed by the Company (including retirement) other than by reason of death or Disability, no further installments of his or her ISOs shall become exercisable, and his or her ISOs shall terminate on the earliest of (a) immediately upon termination of the Participant’s employment with the Company (or an Affiliate) by the Company (or such Affiliate) for Cause (as hereinafter defined), (b) thirty (30) days after the date of termination of the Participant’s employment with the Company (or an Affiliate) by the Participant or by the Company (or such Affiliate) other than for Cause, provided, however, if such termination occurs by reason of death or Disability, such period shall be extended to one (1) year following the date of such event, and (c) their specified expiration dates, except to the extent that such ISOs (or unexercised installments thereof) have been converted into Non-Qualified Options pursuant to Section 7.9 hereof.

 

7.7.2       Non-Qualified Option. Unless otherwise specified in the agreement relating to such NQO, if a Participant ceases to provide services to the Company (or an Affiliate) other than by reason of death or Disability, no further installments of his or her NSQs shall become exercisable, and his or her NQOs shall terminate on the earliest of (a) immediately upon the termination of the Participant’s provision of services to the Company (or an Affiliate) by the Company (or such Affiliate) for Cause (as hereinafter defined), (b) thirty (30) days after the date of termination of the Participant’s provision of services to the Company (or an Affiliate) by the Participant or by the Company (or such Affiliate) other than for Cause, provided, however, if such termination occurs by reason of death or Disability, such period shall be extended to one (1) year following the date of such event, and (c) their specified expiration dates.

 

7.7.3       Leave of Absence.  For purposes of this Section, an employment or service relationship between the Company and the Participant shall be deemed to exist during any period during which the Participant is employed by or providing services to the Company.  Whether an authorized leave of absence or an absence due to military or government service shall constitute termination of the employment or service relationship between the Company and the Participant shall be determined by the Board.

 

7.7.4       For purposes of this Section 7.7, the term “Cause” shall have the meaning set forth in the employment agreement in effect between the Participant and the Company at the time of the grant and if there is no such employment agreement, shall mean (a) any material breach by the Participant of any agreement to which the optionee and the Company are both parties, (b) any act (other than retirement) or omission to act by the Participant which may have a material and adverse effect on the Company’s business or on the Participant’s ability to perform services for the Company, including, without limitation, the commission of any crime (other than minor traffic violations), or (c) any material misconduct or material neglect of duties by the optionee in connection with the business or affairs of the Company.

 

7.8          Transferability of Options.  Except as otherwise provided in an Award Agreement pertaining to NQOs, no Option shall be assignable or transferable by the grantee except by will or by the laws of descent and distribution nor shall an Option be subject to attachment, execution or similar process.  Except as set forth in the previous sentence and except as otherwise provided in an Award Agreement pertaining to NQOs, during the lifetime of a grantee, each Option shall be exercisable only by such grantee.  In the event of (a) any attempt by the Participant to alienate, assign, pledge, hypothecate or otherwise dispose of the Option, except as provided in this Plan, or (b) the levy of any attachment,

 

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execution or similar process upon the rights or interest hereby conferred, the Company may terminate the Option by notice to the Participant and it shall thereupon become null and void.

 

7.9          Conversion of ISOs to Non-Qualified Options.  The Committee, at the written request or with the written consent of any Participant, may in its discretion take such actions as may be necessary to convert such Participant’s ISOs (or any installments or portions of installments thereof) that have not been exercised on the date of conversion into Non-Qualified Options at any time prior to the expiration of such ISOs, regardless of whether the Participant is an employee of the Company at the time of such conversion.  Such actions may include, but shall not be limited to, extending the exercise period or reducing the exercise price of the appropriate installments of such ISOs.  At the time of such conversion, the Committee (with the consent of the Participant) may impose such conditions on the exercise of the resulting Non-Qualified Options as the Committee in its discretion may determine, provided that such conditions shall not be inconsistent with this Plan.  Nothing in the Plan shall be deemed to give any Participant the right to have such Participant’s ISOs converted into Non-Qualified Options, and no such conversion shall occur until and unless the Committee takes appropriate action.

 

7.10        Cancellation of Options.  Except as otherwise expressly provided in the agreement pursuant to which an Option is issued, the Committee may, in its sole discretion, in cases involving a serious breach of conduct by an employee or former employee, or activity of a former employee in competition with the business of the Company, cancel any Option, whether vested or not, in whole or in part.  Such cancellation shall be effective as of the date specified by the Committee.

 

Section 8

Restricted Shares

 

8.1          Grant of Restricted Shares.  The Committee may award shares of Restricted Shares and determine the purchase price, if any, therefor, the duration of the restricted period during which the shares are subject to forfeiture or restrictions on transferability, if any, the conditions, if any, under which the Shares may be forfeited to or repurchased by the Company and any other terms and conditions of the Awards.  The Committee may modify or waive any restrictions, terms and conditions with respect to any Restricted Shares. Restricted Shares may be issued for such consideration, if any, as is determined by the Committee, subject to applicable law.  Each recipient of a grant of Restricted Shares shall execute an agreement in such form not inconsistent with the Plan as may be approved by the Board.  Such agreements may differ among recipients of Restricted Shares.

 

8.2          Transferability. Except as set forth in the applicable Award Agreement, Restricted Shares may not be sold, assigned, transferred, pledged or otherwise encumbered. Furthermore, the Award of Restricted Shares may be made subject to a repurchase right or right of first refusal, with respect to the Restricted Shares, in favor of the Company and certain shareholders of the Company upon the occurrence of certain specified events.

 

8.3          Evidence of Award.  Restricted Shares shall be evidenced in such manner as the Committee may determine. Any certificates issued in respect of Restricted Shares shall be registered in the name of the Participant and, unless otherwise determined by the Committee, deposited by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the restricted period(s), the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant.

 

8.4          Shareholder Rights. A Participant shall have all the rights of a shareholder with respect to Restricted Shares awarded, including voting and dividend rights, unless otherwise provided in the Award Agreement.

 

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Section 9

Other Share-Based Awards

 

The Committee shall have the right to grant other Awards based upon the Common Shares having such terms and conditions as the Committee may determine, including, without limitation, the grant of Common Shares based upon certain conditions, the grant of securities convertible into Common Shares and the grant of share appreciation rights.

 

Section 10

Adjustments Upon Changes in Capitalization and “Terminating Transaction” Events

 

10.1        Upon the occurrence of any of the following events, a Participant’s rights with respect to Awards granted to such participant hereunder shall be adjusted as hereinafter provided, unless otherwise specifically provided in the Award Agreement:

 

10.1.1     Recapitalization or Reorganization.  Subject to Section 10.1.2 below, if, as a result of any recapitalization, reorganization, reclassification, share dividend, share split, reverse share split or other similar change in the Company’s authorized or issued shares, the outstanding shares of Common Shares are increased or decreased or are exchanged for a different number or kind of shares or other securities of the Company, or additional shares or new or different shares or other securities of the Company or other non-cash assets are distributed with respect to such Shares or other securities, or, if, as a result of any merger, consolidation or sale of all or substantially all of the assets of the Company, the outstanding shares of Common Shares are converted into or exchanged for a different number or kind of securities of the Company or any successor entity (or a parent or subsidiary thereof), the Committee shall make an appropriate or proportionate adjustment in (i) the maximum number of shares reserved for issuance under the Plan, (ii) the number and kind of shares or other securities subject to any then outstanding Awards under the Plan, (iii) the repurchase price per share subject to each outstanding Award, if any, and (iv) the exercise price and/or exchange price for each share subject to any then outstanding Options under the Plan, without changing the aggregate exercise price (i.e., the exercise price multiplied by the number of Options) as to which such Options remain exercisable. The adjustment by the Committee shall be final, binding and conclusive. No fractional Common Shares shall be issued under the Plan resulting from any such adjustment, but the Committee in its discretion may make a cash payment in lieu of fractional shares.  The Committee may also adjust the number of Common Shares subject to outstanding Awards and the exercise price and the terms of outstanding Awards to take into consideration material changes in accounting practices or principles, extraordinary dividends, acquisitions or dispositions of share or property or any other event if it is determined by the Committee that such adjustment is appropriate to avoid distortion in the operation of the Plan, provided that no such adjustment shall be made in the case of an Incentive Share Option, without the consent of the grantee, if it would constitute a modification, extension or renewal of the Option within the meaning of Section 424(h) of the Code.

 

10.1.2     Change in Control.  Notwithstanding any other provision of the Plan, but subject to the provisions of any particular Award Agreement, in the event of any Change in Control (as defined below) of the Company, and in anticipation thereof if required by the circumstances, the Committee may, in its discretion, at the time an Award is made or at any time thereafter, provide that all outstanding unvested Options immediately vest and become exercisable and any restrictions applicable to any Restricted Shares terminate and lapse immediately prior to the consummation of any Change in Control.  Further, the Committee, in its sole discretion (and in

 

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addition to or in lieu of any actions permitted to be taken by the Company under the terms of any particular Award Agreement), may, on either an overall or a Participant by Participant basis, (i) upon written notice, provide that any outstanding Options must be exercised, to the extent then exercisable, within a specified number of days after the date of such notice, at the end of which period such Options shall terminate, (ii) if there is a surviving or acquiring entity, and subject to the consummation of such Change in Control, cause that entity or an affiliate of that entity to grant replacement Awards having such terms and conditions as the Committee determines to be appropriate in its sole discretion, upon which replacement the replaced Options or Restricted Shares shall be terminated or cancelled, as the case may be, (iii) terminate any outstanding Options and make such payments, if any, therefor (or cause the surviving or acquiring entity to make such payments, if any, therefor) as the Committee determines to be appropriate in its sole discretion (including, without limitation, with respect to only the then exercisable portion of such Options based on the Fair Market Value of the underlying Shares as determined by the Board in good faith), upon which termination such Options shall immediately cease to have any further force or effect, (iv) repurchase (or cause the surviving or acquiring entity to purchase) any Restricted Shares for such amounts, if any, as the Board determines to be appropriate in its sole discretion (including, without limitation, an amount with respect to only the vested portion of such Shares (i.e., the portion that is not then subject to forfeiture or repurchase at a price less than their value), based on the Fair Market Value of such vested portion as determined by the Board in good faith), upon which purchase the holder of such Common Shares shall surrender such Common Shares to the purchaser, or (v) take any combination (or none) of the foregoing actions.  For purposes of this Plan, a “Change in Control” shall mean a single transaction or series of related transactions, other than an Initial Public Offering, pursuant to which a person or persons unaffiliated with the Company, other than existing shareholders of the Company, (i) acquires shares of the Company possessing the voting power to elect a majority of the Board, (ii) consummates a merger, amalgamation or consolidation with the Company as a result of which the shareholders of the Company who own common shares or other voting securities prior to such transaction(s) shall own, directly or indirectly, less than fifty percent (50%) of the voting securities of the surviving entity, or (iii) acquire all or substantially all of the assets of the Company.

 

10.1.3     Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, each Award will terminate immediately prior to the consummation of such proposed action or at such other time and subject to such other conditions as shall be determined by the Committee.

 

10.2        Assumption of Options Upon Certain Events.  In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Committee may grant Awards under the Plan in substitution for stock and stock based awards issued by such entity or affiliate thereof.  The Company may direct that substitute Awards be granted on such terms and conditions as the Board considers appropriate in the circumstances.  In the event of a business combination or other transaction of the type detailed in Section 10.1.2, any securities, cash or other property received in exchange for Restricted Shares shall continue to be governed by the provisions of any Award Agreement pursuant to which they were issued, including any provision regarding vesting, and such securities, cash, or other property may be held in escrow on such terms as the Board may direct, to insure compliance with the terms of any such Award Agreement.

 

10.3        No Effect.  Except as expressly provided herein, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject to Options. No adjustments shall be made for dividends paid in cash or in property other than securities of the Company.

 

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10.4        Appropriate Adjustments.  Upon the happening of any of the events described in Section 10.1 above, the class and aggregate number of shares set forth in Section 6 hereof that are subject to Options which previously have been or subsequently may be granted under the Plan shall also be appropriately adjusted to reflect the events described in such subparagraphs.  The Committee or the Board shall determine the specific adjustments to be made under this Section 10 and, subject to Section 4, its determination shall be conclusive.

 

Section 11

General Provisions Applicable to Awards

 

11.1        Withholding. Requirements and Arrangements.  The Participant shall pay to the Company, or make provision satisfactory to the Board for payment of, any taxes required to be withheld in respect of any Award no later than the date of the event creating the tax liability.  In the Board’s discretion, such tax obligations may be paid in whole or in part in Shares, including shares retained from the exercise of the Option creating the tax obligation, valued at the Fair Market Value of the Shares on the date of delivery to the Company.  The Company and any of its affiliates may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the Participant.

 

11.2        No Effect on Employment. The Plan shall not give rise to any right on the part of any Participant to continue in the employ of the Company. The loss of existing or potential profit in Awards granted under the Plan shall not constitute an element of damages in the event of termination of the relationship of a Participant even if the termination is in violation of an obligation of the Company to the Participant by contract or otherwise.

 

11.3        No Rights as Shareholder.  Subject to the provisions of the Plan and the applicable Award Agreement, no Participant shall have any rights as a shareholder with respect to any Shares to be distributed under the Plan until he or she becomes the holder thereof.

 

11.4        Lock-Up Agreement. The Company may, in its discretion, require in connection with an Initial Public Offering, that a Participant agree that any Share may not be sold, offered for sale, or otherwise disposed of for a period of time as determined by the Committee, provided at least a majority of the Company’s Board of Directors and officers who hold Shares of Options at such time are similarly bound.

 

11.5        Governing Law. The Plan and all rights under the Plan shall be construed in accordance with and governed by the internal laws of the British Virgin Islands, without giving effect to the principles of the conflicts of laws thereof.

 

11.6        Effective Date.  This Plan shall become effective upon approval by the shareholders in accordance with applicable law.  Subject to such approval by the shareholders and to the requirement that no Shares may be issued hereunder prior to such approval, Options and other Awards may be granted hereunder on and after adoption of this Plan by the Board.

 

Section 12

Amendment and Termination

 

12.1        Amendment, Suspension, Termination of the Plan.  The Board may amend, suspend or terminate the Plan in whole or in part at any time and for any reason; provided, however, that any amendment of the Plan which is necessary to comply with any applicable tax or regulatory requirement, shall be subject to the approval of the Company’s shareholders. Shareholder approval shall not be required for any other amendment of the Plan.  No amendment, suspension or termination of the Plan

 

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shall materially adversely affect the rights of a Participant, without such Participant’s consent, with respect to any Award previously made.  Unless terminated earlier by the Board, the Plan shall terminate on the tenth anniversary of the Plan’s date of adoption by the Board.  In no event shall any Awards be made under the Plan after such expiration date, but Awards previously granted may extend beyond such date.

 

12.2        Amendment, Suspension, Termination of an Award. The Committee may modify, amend or terminate any outstanding Award, including, without limitation, substituting therefor another Award of the same or a different type and changing the date of exercise or realization; provided, however, that the Participant’s consent to such action shall be required unless the Committee determines that the action, taking into account any related action, would not materially adversely affect the Participant.

 

Adopted as of the    day ofNovember, 2014

 

 

	
 
    	
BIOHAVEN   PHARMACEUTICAL HOLDING COMPANY LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

DATE APPROVED BY BOARD OF DIRECTORS:  November   , 2014

 

10Exhibit 10.10

 

BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.

2014 EQUITY INCENTIVE PLAN

 

Share Option Agreement

 

This Share Option Agreement (this “Agreement”), dated as of the Grant Date, is between Biohaven Pharmaceutical Holding Company Ltd., a corporation formed under the laws of the Territory of the British Virgin Islands (the “Company”), and [           ] (the “Optionee”).

 

The Company hereby grants to the Optionee the following option (the “Option”) to purchase Common Shares of the Company in accordance with the terms and conditions of this Agreement and the Biohaven Pharmaceutical Holding Company Ltd. 2014 Equity Incentive Plan (the “Plan”):

 

	
Total Number of Shares Subject to this Option:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Type of Option (ISO or an NQO):
    	
 
    	
NQO
    
	
 
    	
 
    	
 
    
	
Exercise Price per Share:
    	
 
    	
$9.2911
    
	
 
    	
 
    	
 
    
	
Grant Date:
    	
 
    	
December 15, 2016
    
	
 
    	
 
    	
 
    
	
Vesting Schedule:
    	
 
    	
25% on date of grant, 25% next 3 anniversaries of   grant provided that all unvested options shall be immediately 100% vested   upon a Change of Control of the Company
    
	
 
    	
 
    	
 
    
	
Vesting Commencement Date:
    	
 
    	
December 15, 2016
    
	
 
    	
 
    	
 
    
	
Number of Vested Shares on Grant Date:
    	
 
    	
 
    
	
Vesting Period:
    	
 
    	
3 years
    
	
Number of Shares Vesting at end of each Vesting   Period:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Expiration Date:
    	
 
    	
December 14, 2026
    

 

1.                                      Plan. This Agreement, which constitutes an Award Agreement under the Plan, is granted pursuant to and is governed by the Plan, the terms and conditions of which are incorporated into this Agreement by reference. To the extent there is any inconsistency between the terms of the Plan and this Agreement, the terms of the Plan shall control. Unless the context otherwise requires, capitalized terms used herein without definitions shall have the respective meanings assigned to them in the Plan.  By signing this Agreement, the Optionee acknowledges receipt of a copy of the Plan.

 

2.                                      Grant of Option. On the terms and conditions set forth in this Agreement, the Company grants to the Optionee on the Grant Date this Option to purchase, at the Exercise Price Per Share set forth above, the Total Number of Shares Subject to this Option, as set forth above.

 

3.                                      Type of Option.  This Option is intended to qualify either as an ISO or an NQO, as set forth above.  If this Option is intended to qualify as an ISO, it is agreed that the Exercise Price per Share 

 

 

is at least 100% of the Fair Market Value per Share on the Grant Date (110% of Fair Market Value if Section 7.2 of the Plan applies).

 

4.                                      Exercisability Schedule.  The Optionee may exercise this Option for such number of Shares as have become exercisable pursuant to the Vesting Schedule set forth above; provided that upon each vesting date the Optionee is employed with the Company or is otherwise providing services to the Company.

 

5.                                      Exercise of Option. Prior to the Expiration Date (or such earlier date as set forth in Section 6 below), the Optionee may exercise this Option by delivering a Notice of Share Option Exercise in the form attached hereto as Exhibit A (the “Notice”), signed by the Optionee, and received by the Company at its principal office, accompanied by this Agreement and payment in full in the manner provided in the Plan.  The Optionee may purchase less than the number of Shares covered hereby, provided that no partial exercise of this Option may be for any fractional Share or for fewer than ten (10) whole Shares.  The Optionee (or any other person entitled to exercise this Option) shall not be entitled to any rights as a Shareholder of the Company with respect to any Shares issuable upon exercise of this Option until such Shares shall have been registered on the register of members of the Company in the name of the Optionee (or such other person).

 

6.                                      Exercise of Option After Termination of Employment.

 

a.                                      Termination of service.  Except as otherwise determined by the Board, or as may otherwise be expressly provided in any employment agreement between the Company and the Optionee, upon the termination of the service of the Optionee to the Company (or to an Affiliate of the Company), this Option shall expire on the earliest of the following occasions:

 

i.                                          the date that is three (3) months after the voluntary termination of the Optionee’s service or the termination of the Optionee’s service by the Company (or by an Affiliate of the Company) other than for cause;

 

ii.                                       the date of the termination of the Optionee’s service by the Company (or by an Affiliate of the Company) for Cause;

 

iii.                                    the date one (1) year after the termination of the Optionee’s service by reason of Disability;

 

iv.                                   the date one (1) year after the termination of the Optionee’s service by reason of the Optionee’s death; or

 

v.                                      the specified Expiration Date of the Option, as set forth above.

 

vi.                                   Any portion of this Option that is not exercisable on the date of termination of the Optionee’s service with the Company, for any reason, shall terminate immediately and automatically be null and void and of no further force and effect.

 

7.                                      Notice of Premature Disposition.  If this Option is intended to qualify as an ISO, as provided on the first page of this Agreement, then if, within two (2) years from the Grant Date or within one (1) year after the issuance of Shares to the Optionee upon exercise of this Option, the Optionee makes a disposition (as defined in Section 424(c) of the Code) of any Shares, the Optionee shall notify the Treasurer of the Company within ten (10) days after such disposition.

 

8.                                      Restrictions on Transfer.  The Optionee shall not sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by operation of law or otherwise except by will or the laws of descent and distribution, and during the lifetime of the Optionee, this Option shall be exercisable only by the Optionee.

 

 

9.                                      Withholding.  No Shares shall be issued pursuant to the exercise of this Option unless and until the Optionee pays to the Company or makes provision satisfactory to the Company for payment of any federal, state or local withholding taxes required by law to be withheld in respect of this Option.

 

10.                               Shareholders Agreement. The Optionee has received a copy of, and agrees to become a party to, the Shareholders Agreement, subject to all of the terms and provisions of the Shareholders Agreement as a “Holder.” The Optionee shall deliver to the Company a copy of the Joinder Agreement to the Shareholders Agreement attached hereto as Exhibit B (the “Joinder”) concurrently with the delivery of the Notice.

 

11.                               Market “Stand-off” Agreement.  The Optionee hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company of its Common Shares or any other equity securities (including, but not limited to, this Optinon) under the Securities Act on a registration statement on Form S-1 (or F-1) or Form S-3 (or F-3), and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days, or such other period, not to exceed seventeen (17) days after the expiration of the 180 day period, as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (1) the publication or other distribution of research reports, and (2) analyst recommendations and opinions, including, but not limited to, the restrictions contained in FINRA Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any option held by Optionee, any Common Shares, or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Shares held immediately before the effective date of the registration statement for such offering or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of any option held by Optionee, any Common Shares, or other securities, in cash, or otherwise.  The foregoing provisions of this Section 11 shall apply only to the intial public offering and shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, or the transfer of any shares to any trust for the direct or indirect benefit of the Optionee or the immediate family of the Optionee, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, and shall be applicable to the Optionee only if all officers and directors are subject to the same restrictions and the Company uses commercially reasonable efforts to obtain a similar agreement from all stockholders individually owning more than one percent (1%) of the Company’s outstanding Common Shares (after giving effect to conversion into Common Shares of all outstanding Preferred Shares).  The underwriters in connection with such registration are intended third-party beneficiaries of this Section 11 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.  The Optionee further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Section 11 or that are necessary to give further effect thereto.  Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Optionees subject to such agreements, based on the number of shares subject to such agreements. For the avoidance of doubt, this Section 11 shall be of no force or effect upon the execution and delivery by the Optionee of the Joinder to the Company in accordance with Section 10.

 

12.                               Amendment. The Board may at any time or times amend the Plan or this Agreement for the purpose of satisfying the requirements of any changes in applicable laws or regulations or for any other purpose which at the time may be permitted by law.  No termination, amendment of the Plan or amendment of this Agreement shall, without the Optionee’s consent, materially adversely affect the Optionee’s rights under this Agreement.

 

 

13.                               Notices.  All notices, requests, consents and other communications shall be in writing and be deemed given when delivered personally, by telex or facsimile transmission or when received if mailed by first class registered or certified mail, postage prepaid.  Notices to the Company or the Optionee shall be addressed as set forth underneath their signatures below, or to such other address or addresses as may have been furnished by such party in writing to the other.

 

14.                               Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the Brisih Virgin Islands without regard to conflict of law principles.

 

15.                               WAIVER OF JURY TRIAL. EACH PARTY HERETO IRREVOCABLY AND KNOWINGLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY LAW) ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO, INCLUDING, WITHOUT LIMITATION, ANY ACTION OR PROCEEDING (A) TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR (B) ARISING FROM ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH OR RELATED TO THIS AGREEMENT. EACH PARTY HERETO AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT A JURY.

 

16.                               Entire Agreement. This Agreement and the Plan constitutes the full and entire understanding and agreement between the parties with regard the subject hereof and supersedes in their entirety all other or prior agreements between or among the Company and the Optionee regarding the subjects hereof.

 

17.                               CONSENT TO JURISDICTION.

 

a.                                      EACH OF THE PARTIES HERETO HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE TERRITORY OF THE BRITISH VIRGIN ISLANDS, AS WELL AS TO THE JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE RELATED AGREEMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING, WITHOUT LIMITATION, ANY PROCEEDING RELATING TO ANCILLARY MEASURES IN AID OF ARBITRATION, PROVISIONAL REMEDIES AND INTERIM RELIEF, OR ANY PROCEEDING TO ENFORCE ANY ARBITRAL DECISION OR AWARD.

 

b.                                      EACH PARTY HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO BRING ANY SUIT, ACTION OR OTHER PROCEEDING IN OR BEFORE ANY COURT OR TRIBUNAL OTHER THAN THE COURTS OF THE TERRITORY OF THE BRITISH VIRGIN ISLANDS AND COVENANTS THAT IT SHALL NOT SEEK IN ANY MANNER TO RESOLVE ANY DISPUTE OTHER THAN AS SET FORTH IN THIS SECTION OR TO CHALLENGE OR SET ASIDE ANY DECISION, AWARD OR JUDGMENT OBTAINED IN ACCORDANCE WITH THE PROVISIONS HEREOF.

 

c.                                       EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY AND ALL OBJECTIONS IT MAY HAVE TO VENUE, INCLUDING, WITHOUT LIMITATION, THE INCONVENIENCE OF SUCH FORUM, IN ANY OF SUCH COURTS.  IN ADDITION, EACH OF THE PARTIES CONSENTS TO THE SERVICE OF PROCESS BY 

 

 

PERSONAL SERVICE OR ANY MANNER IN WHICH NOTICES MAY BE DELIVERED HEREUNDER.

 

18.                               Counterparts.  For the convenience of the parties and to facilitate execution, this Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same document.

 

[Signature Page Follows]

 

 

The undersigned executed this Agreement as of the date set forth above.

 

	
OPTIONEE
    	
 
    	
Biohaven Pharmaceutical Holding   Company

Ltd.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
Print Name
    	
 
    	
 
    	
Print Name:
    	
Vladimir Coric
    
	
Address:
    	
 
    	
 
    	
Title:
    	
Chief Executive Officer   and Director
    
	
 
    	
 
    
	
E-Mail:
    	
 
    	
 
    

 

[Signature Page to Stock Option Agreement]

 

 

Exhibit A

 

NOTICE OF SHARE OPTION EXERCISE

 

[DATE]

 

[   ]

[INSERT ADDRESS]

Attention: Treasurer

 

Dear Sir or Madam

 

Pursuant to the terms of the share option agreement between myself and Biohaven Pharmaceutical Holding Company Ltd. (the “Company”) dated                  (the “Agreement”), under the Company’s 2014 Equity Incentive Plan, I, [Insert Name]                                    , hereby [Circle One] partially/fully exercise such Option by including herein payment in the amount of $           representing the purchase price for [Fill in number of Underlying Shares]                 Shares.  I have chosen the following form(s) of payment:

 

	
o
    	
1.
    	
Cash
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
o
    	
2.
    	
Certified or bank check   payable to [   ]
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
o
    	
3.
    	
Other (as described in   the Plan (please describe))
    	
 
    

 

.

 

In connection with my exercise of the Option as set forth above, I hereby represent and warrant to the Company as follows:

 

(i)                                     I am purchasing the Shares for my own account for investment only, and not with a view to, or for sale in connection with, any distribution of the Shares in violation of the Securities Act, or any rule or regulation under the Securities Act.

 

(ii)                                  I have had such an opportunity as I have deemed adequate to obtain from the Company such information as is necessary to permit me to evaluate the merits and risks of my investment in the Company and have consulted with my own advisers with respect to my investment in the Company.

 

(iii)                               I have sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in the purchase of the Shares and to make an informed investment decision with respect to such purchase.

 

(iv)                              I can afford a complete loss of the value of the Shares and am able to bear the economic risk of holding such Option Shares for an indefinite period of time.

 

(v)                                 I understand that the Shares have not be registered under the Securities Act (it being understood that the Shares are being issued and sold in reliance on the exemption provided in Rule 701 thereunder) or any applicable state securities or “blue sky” laws and may not be sold or otherwise transferred or disposed of in the absence of an effective registration statement under the Securities Act of 1933 and under any applicable state securities or “blue sky” laws (or exemptions from the registration requirements thereof).  I further acknowledge that certificates representing Shares will bear restrictive legends reflecting the foregoing.

 

 

(vi)                              I understand and agree that the Shares when issued will continue to be subject to the Plan.

 

	
 
    	
Sincerely yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 

 
    
	
 
    	
 

 
    
	
 
    	
 

 
    

 

 

Exhibit B

 

JOINDER SIGNATURE PAGE

 

The undersigned, by execution below, hereby agrees to become party to the Amended and Restated Biohaven Pharmaceutical Holding Company Ltd. Shareholders’ Agreement (as amended from time to time, the “Shareholders Agreement”), dated as of October 31, 2016, in the capacity as a “Holder” and agrees to be bound by the terms and conditions of said Shareholders’ Agreement in such capacity as of the date below.

 

	
 
    	
HOLDER:
    
	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

Agreed and Acknowledged:

 

	
BIOHAVEN PHARMACEUTICAL HOLDING COMPANY LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    
	
Title:

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