Document:

albo-ex10104_441.htm

 

Exhibit 10.10.4

GENERAL RELEASE & WAIVER

In consideration of the Payment (as defined in Section 4 below) that Albireo Pharma, Inc. (the “Company”), f/k/a Biodel Inc., has agreed to make to me hereunder, and in connection with my ceasing to be employed by the Company, I hereby agree to the following general release and to the other terms and conditions as set forth below (the “Release”).  

The Company hereby advises me to consult with an attorney before signing this Release and is providing me with up to 45 days to do so, as described in more detail herein.

	
1.
	
On behalf of myself and my heirs, executors, administrators, successors and assigns, I hereby fully, forever, irrevocably and unconditionally release, remise and discharge the Company and its affiliates, subsidiaries, parent companies, predecessors and successors, and all of their respective past and present officers, directors, stockholders, partners, members, employees, agents, representatives, plan administrators, attorneys, insurers and fiduciaries (each in their individual and corporate capacities) (collectively, the “Released Parties”) from any and all claims, charges, complaints, demands, actions, causes of action, suits, rights, debts, sums of money, costs, accounts, reckonings, covenants, contracts, agreements, promises, doings, omissions, damages, executions, obligations, liabilities and expenses (including attorneys’ fees and costs), of every kind and nature that I ever had or now have against any or all of the Released Parties, including, but not limited to, any and all claims arising out of or relating to my employment with and/or separation from the Company, including, but not limited to, all claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Genetic Information Nondiscrimination Act of 2008, 42 U.S.C. § 2000ff et seq., the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et seq., Section 806 of the Corporate and Criminal Fraud Accountability Act of 2002, 18 U.S.C. 1514(A), the Rehabilitation Act of 1973, 29 U.S.C. § 701 et seq., Executive Order 11246, Executive Order 11141, the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., and the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., all as amended; the Equal Pay Act, 29 U.S.C. § 201 et seq., the Uniformed Services Employment and Reemployment Rights Act of 1994, 38 U.S.C. § 4301 et seq., the Lily Ledbetter Fair Pay Act, the National Labor Relations Act, 29 U.S.C. § 151 et seq., all claims arising out of the Connecticut Human Rights and Opportunities Act, Conn. Gen. Stat. § 46a-51 et seq., the Connecticut Equal Pay Law, Conn. Gen. Stat. § 31-75 et seq., the Connecticut Family and Medical Leave Law, Conn. Gen. Stat. § 31-51kk et seq., and Conn. Gen. Stat. § 31-51m (Connecticut whistleblower protection law), as amended; all common law claims including, but not limited to, actions in defamation, intentional infliction of emotional distress, misrepresentation, fraud, wrongful discharge, and breach of contract, including, but not limited to, my Executive Severance Agreement with the Company dated December 31, 2008, as amended April 1, 2016 (the “Severance Agreement”) and my Change of Control Agreement with the Company dated December 31, 2008, as amended April 1, 2016 (the “Change of Control Agreement” and together with the Severance Agreement, the “Agreements”) and all claims to any equity compensation from the Company (other than compensation vested or vesting on my termination of employment), contractual or otherwise; and any claim or damage arising out of my employment with and/or separation from the Company (including a claim for retaliation) under any common law theory or any federal, state or local statute or ordinance not expressly referenced above; provided, however, that nothing in this Release prevents me from filing a charge with, cooperating with or participating in any proceeding before the Equal Employment Opportunity 

59538452v.2

127074645 v5-vALBO

 

		
Commission or a state fair employment practices agency (except that I acknowledge that I may not recover any monetary benefits in connection with any such claim, charge or proceeding).

I understand and agree that the claims released in this section include not only claims presently known to me, but also all unknown or unanticipated claims, rights, demands, actions, obligations, liabilities and causes of action of every kind and character that would otherwise come within the scope of the released claims as described in this section. I understand that I may hereafter discover facts different from what I now believe to be true, which if known, could have materially affected this Release, but I nevertheless waive and release any claims or rights based on different or additional facts.

The Company agrees that I am not releasing any claims I may have for indemnification under state or other law or the charter, articles, or by-laws of the Company and its affiliated companies, or under any indemnification agreement with the Company or under any insurance policy providing directors’ and officers’ coverage for any lawsuit or claim relating to the period when I was a director or officer of the Company or any affiliated company; provided, however, that (i) the Company’s execution of this Release is not a concession or guaranty that I have any such rights to indemnification, (ii) this Release does not create any additional rights to indemnification, and (iii) the Company retains any defenses it may have to such indemnification or coverage.  The Company further agrees that I am not releasing and nothing in this Release shall affect any of the rights I have under this Release with respect to the Payment (as defined in Section 4 below).  The Company further agrees that I am not releasing and nothing in this Release shall affect any rights I have for any reimbursement due to me under the Health Reimbursement Account with the Company for health care expense incurred before November 4, 2016.

	
2.
	
I acknowledge and reaffirm my obligations under Section 7 of the Severance Agreement and Section 10 of the Change of Control Agreement, including but not limited to my confidentiality, nondisclosure and nonsolicitation obligations, which remain in full force and effect.  I acknowledge and agree that Section 7 of the Severance Agreement and Section 10 of the Change of Control Agreement survive the termination of my employment with the Company.

	
3.
	
I confirm that I have returned to the Company in good working order all keys, files, records (and copies thereof), equipment (including, but not limited to, computer hardware, software and printers, wireless handheld devices, cellular phones, pagers, etc.), Company identification, Company vehicles, Company confidential and proprietary information and any other Company-owned property in my possession or control and have left intact all electronic Company documents, including, but not limited to, those that I developed or helped to develop during my employment.  I further confirm that I have cancelled all accounts for my benefit, if any, in the Company’s name, including, but not limited to, credit cards, telephone charge cards, cellular phone and/or pager accounts and computer accounts. 

	
4.
	
If I have not timely revoked this Release as provided in Section 11, the Company shall pay me a lump sum in the gross amount of $570,728, subject to Section 13 (the “Payment”), during January 2017 (but in no event later than January 10, 2017); provided that, notwithstanding the foregoing, if and to the extent Section 5.9 of the Severance Agreement or Section 8.10 of the Change of Control Agreement is applicable to any portion of the Payment, such portion shall be subject to said Section and shall instead be paid in accordance with Section 5.9(c) of the Severance Agreement or Section 8.10(c) of the Change of Control Agreement, as the case may be.

	
5.
	
Except for any reimbursement due to me under the Health Reimbursement Account for health care expense incurred before November 4, 2016, I acknowledge that I have been reimbursed by 

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the Company for all business expenses incurred in conjunction with the performance of my employment and that no other reimbursements are owed to me.  I also acknowledge that I have received payment in full for all services rendered in conjunction with my employment by the Company, including payment for all wages, bonuses, equity, and accrued unused vacation time, and that no other compensation (including, without limitation, severance) is owed to me under the Agreements or otherwise.  

	
6.
	
The Company further agrees and acknowledges that, if I have not timely revoked this Release as provided in Section 11, then, notwithstanding anything to the contrary in the Company’s 2010 Stock Incentive Plan, as amended and restated or any other document or instrument governing my outstanding equity compensation awards, any outstanding vested stock options (including any such stock options, the vesting of which is accelerated as provided in Section 8.1(e) of the Change of Control Agreement or Sections 3.1 or 5.1(e) of the Severance Agreement), shall remain outstanding and exercisable in accordance with the terms of (a) Section 8.1(e) of the Change of Control Agreement and Section 5.1(e) of the Severance Agreement or (b) Section 3.1 of the Severance Agreement, as applicable.

	
7.
	
I agree to cooperate in all reasonable respects with the Company in the investigation, defense or prosecution of any claims or actions now in existence or that may be brought in the future against or on behalf of the Company by any third party against the Company or by the Company against any third party.  I also agree that my cooperation in connection with such claims or actions will include being available to meet with the Company’s counsel to prepare for discovery, any mediation, arbitration, trial, administrative hearing or other proceeding, and to act as a witness when requested by the Company at reasonable, mutually acceptable times and locations.  Moreover, unless otherwise prohibited by law, I agree to notify the General Counsel of the Company if I am asked by any person, entity or agency to assist, testify or provide information in any such proceeding or investigation.  Such notice shall be in writing and sent by overnight mail within two business days of the time I receive the request for assistance, testimony or information.  If I am not legally permitted to provide such notice, I agree that I shall request that the person, entity or agency seeking assistance, testimony or information provide notice consistent with this Section 7.  I also understand and agree that my obligation under this Section 7 includes reasonable cooperation with respect to the Company’s patent-related matters.  Subject to the timing rules of Section 5.9 of the Severance Agreement and 8.10 of the Change of Control Agreement, the Company will promptly reimburse me for all reasonable hotel, meal and other travel expenses that I incur in connection with providing the aforementioned cooperation.  To the extent the cooperation required by this Section 7 extends beyond the occasional telephone conference or email communication, the Company also agrees to compensate me at a reasonable, mutually acceptable rate for such cooperation.

	
8.
	
This Release shall be binding upon the parties and may not be modified in any manner, except by an instrument in writing of concurrent or subsequent date signed by duly authorized representatives of the parties hereto.  This Release is binding upon and shall inure to the benefit of the parties and their respective agents, assigns, heirs, executors, successors and administrators.  No delay or omission by the Company in exercising any right under this Release shall operate as a waiver of that or any other right.  A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar to or waiver of any right on any other occasion.

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9.
	
Should any provision of this Release be declared or be determined by any court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term or provision shall be deemed not to be a part of this Release.

	
10.
	
I understand and agree that nothing in this Release is or shall constitute an admission of liability or wrongdoing on the part of the Company or me.

	
11.
	
I acknowledge that I have been given 45 days to consider this Release, and that the Company advised me in writing to consult with an attorney of my own choosing prior to signing this Release.  I also acknowledge that any change made to this Release, whether material or immaterial, does not restart the running of the 45-day period.  I understand that: (a) I may revoke this Release for a period of seven (7) days after I sign it (such seventh day, the “Release Effective Date”) by notifying Pete Zorn, Senior Vice President, Corporate Development and General Counsel (Albireo), in writing; (b) the Release shall not be effective or enforceable until the expiration of this seven (7)-day revocation period; and (c) if I revoke this Release, the Company will have no obligation to make the Payment to me.  

I understand and agree that by entering into this Release I am waiving any and all rights or claims I might have under the Age Discrimination in Employment Act (the “ADEA”), as amended by the Older Workers Benefit Protection Act (“OWBPA”), and that I have received consideration beyond that to which I was previously entitled.  It is the Company’s desire to make certain that I understand the terms of this Release.  To that end, in addition to the 45-day review period and 7-day revocation period described above, I have been encouraged and given the opportunity to consult with legal counsel for the purpose of reviewing this Release.  In addition, attached as Exhibit A I have been provided with certain additional information required by the ADEA and the OWBPA, including job titles and ages of other employees in my decisional unit who were, or were not, separated from employment and offered a Release.

	
12.
	
I affirm that no other promises or agreements of any kind have been made to or with me by any person or entity whatsoever to cause me to sign this Release, and that I fully understand the meaning and intent of this Release.  I state and represent that I have had an opportunity to fully discuss and review the terms of this Release with an attorney.  I further state and represent that I have carefully read this Release, understand its contents, freely and voluntarily assent to all of the terms and conditions hereof, agree that I will receive compensation conditioned on my providing an effective Release that exceeds what I would otherwise receive from the Company, and sign my name of my own free act.

	
13.
	
In connection with any payment provided to me pursuant to this Release, the Company will withhold and remit to the tax authorities the amounts required under applicable law, and I shall be responsible for all applicable taxes with respect to such payment under applicable law.  I acknowledge that I am not relying upon the advice or representation of the Company with respect to the tax treatment of any payment provided to me pursuant to this Release.

	
14.
	
This Release must be construed, interpreted and governed in accordance with the laws of the state of New York without reference to rules relating to conflict of laws.

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I hereby agree to the terms and conditions set forth above.  I understand that I am being provided with up to 45 days to review this Release and decide whether to sign it.  I intend that this Release become a binding agreement between the Company and me if I do not revoke my acceptance in seven (7) days.

 

	
November 14, 2016
	
 
	
/s/ Paul S. Bavier
	
 

	
Date
	
 
	
Paul S. Bavier
	
 

 

	
Acknowledged and agreed:
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
ALBIREO PHARMA, INC.
	
 

 

	
November 15, 2016
	
 
	
By:
	
 
	
/s/ Ronald H. W. Cooper
	
 

	
Date
	
 
	
 
	
 
	
 
	
 

 

 

 

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EXHIBIT A

Personnel Affected by Reduction and Eligible for the Payment

As stated in the Release, this Exhibit A is designed to provide additional information regarding the ages and job titles of employees whose jobs were, and were not, impacted by the present reduction in personnel at Biodel Inc.  

Below is a list showing the age and job title for each employee whose job was reviewed pursuant to the reduction.  When reviewing the list below, please note the following additional information, which is designed to help best understand the data being provided:

	
 
	
•
	
This reduction applies to all employees of Biodel Inc. immediately prior to the closing of the transactions contemplated by the Amended and Restated Share Exchange Agreement, dated as of July 13, 2016, by and among Biodel, Albireo and the persons listed on Schedule I thereto.

	
 
	
•
	
For ease of reference, employees are categorized by title.  

	
 
	
•
	
Employees whose jobs are impacted by the reduction (i.e., employees who are subject to layoff) are highlighted in yellow. 

	
 
	
•
	
The employment decisions were based on factors such as position requirements and costs.

 

	
TITLE
	
AGE

	
Gary Gemignani, Chief Financial Officer and Interim Chief Executive Officer
	
***

	
Paul Bavier, Interim President, Chief Administrative Officer, Vice President Corporate Development, General Counsel and Secretary
	
***

	
Regina Mitri, Controller 
	
***

	
Stacie Figueroa, Manager of Systems and Accounting
	
***

	
Rene Barron, HR Director
	
***

I appreciate the sensitive nature of this information. I understand that the Company is obligated by federal law to provide such information so that I can better evaluate the offer of separation terms. Accordingly, I will respect the sensitive and confidential nature of the information provided. 

 

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59538452v.2albo-ex1013_443.htm

 

Exhibit 10.13

Option No.________

ALBIREO PHARMA, INC.

Stock Option Grant Notice

Stock Option Grant under the Company’s

2016 Equity Incentive Plan

 

	
1.
	
 
	
Name and Address of Participant:
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
2.
	
 
	
Date of Option Grant:
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
3.
	
 
	
Type of Grant:
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
4.
	
 
	
Maximum Number of Shares for

which this Option is exercisable:
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
5.
	
 
	
Exercise (purchase) price per share:
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
6.
	
 
	
Option Expiration Date:
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
7.
	
 
	
Vesting Start Date:
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
8.
	
 
	
Vesting Schedule:  This Option shall become exercisable (and the Shares issued upon exercise shall be vested) as follows provided the Participant is an Employee, director or Consultant of the Company or of an Affiliate on the applicable vesting date:

 

[Insert Vesting Schedule]

The foregoing rights are cumulative and are subject to the other terms and conditions of this Agreement and the Plan.

 

 

 

The Company and the Participant acknowledge receipt of this Stock Option Grant Notice and agree to the terms of the Stock Option Agreement attached hereto and incorporated by reference herein, the Company’s 2016 Equity Incentive Plan and the terms of this Option Grant as set forth above.

 

	
ALBIREO PHARMA, INC.

	
 
	
 
	
 

	
By:
	
 
	
 

	
 
	
 
	
Name:
	
 
	
 

	
 
	
 
	
Title:
	
 
	
 

	
 

	
Participant
	
 
	
 

 

 

 

 

ALBIREO PHARMA, INC.

STOCK OPTION AGREEMENT - INCORPORATED TERMS AND CONDITIONS

AGREEMENT made as of the date of grant set forth in the Stock Option Grant Notice by and between Albireo Pharma, Inc. (the “Company”), a Delaware corporation, and the individual whose name appears on the Stock Option Grant Notice (the “Participant”).

WHEREAS, the Company desires to grant to the Participant an Option to purchase shares of its common stock, $0.01 par value per share (the “Shares”), under and for the purposes set forth in the Company’s 2016 Equity Incentive Plan (the “Plan”);

WHEREAS, the Company and the Participant understand and agree that any capitalized terms used and not defined herein have the same meanings as in the Plan; and

WHEREAS, the Company and the Participant each intend that the Option granted herein shall be of the type set forth in the Stock Option Grant Notice.

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:

	
 
	
1.
	
GRANT OF OPTION.

The Company hereby grants to the Participant the right and option to purchase all or any part of an aggregate of the number of Shares set forth in the Stock Option Grant Notice, on the terms and conditions and subject to all the limitations set forth herein, under United States securities and tax laws, and in the Plan, which is incorporated herein by reference.  The Participant acknowledges receipt of a copy of the Plan.

	
 
	
2.
	
EXERCISE PRICE.

The exercise price of the Shares covered by the Option shall be the amount per Share set forth in the Stock Option Grant Notice, subject to adjustment, as provided in the Plan, in the event of a stock split, reverse stock split or other events affecting the holders of Shares after the date hereof (the “Exercise Price”).  Payment shall be made in accordance with Paragraph 11 of the Plan.

	
 
	
3.
	
EXERCISABILITY OF OPTION.

Subject to the terms and conditions set forth in this Agreement and the Plan, the Option granted hereby shall become vested and exercisable as set forth in the Stock Option Grant Notice and is subject to the other terms and conditions of this Agreement and the Plan.

	
 
	
4.
	
TERM OF OPTION.

This Option shall terminate on the Option Expiration Date as specified in the Stock Option Grant Notice and, if this Option is designated in the Stock Option Grant Notice as an ISO and the Participant owns, as of the date hereof, more than 10% of the total combined 

 

 

voting power of all classes of capital stock of the Company or an Affiliate, such date may not be more than five years from the date of this Agreement, but shall be subject to earlier termination as provided herein or in the Plan.

If the Participant ceases to be an Employee, director or Consultant of the Company or of an Affiliate for any reason other than the death or Disability of the Participant, or termination of the Participant for Cause (the “Termination Date”), the Option to the extent then vested and exercisable pursuant to Section 3 hereof as of the Termination Date, and not previously terminated in accordance with this Agreement, may be exercised within three months after the Termination Date, or on or prior to the Option Expiration Date as specified in the Stock Option Grant Notice, whichever is earlier, but may not be exercised thereafter except as set forth below.  In such event, the unvested portion of the Option shall not be exercisable and shall expire and be cancelled on the Termination Date.

If this Option is designated in the Stock Option Grant Notice as an ISO and the Participant ceases to be an Employee of the Company or of an Affiliate but continues after termination of employment to provide service to the Company or an Affiliate as a director or Consultant, this Option shall continue to vest in accordance with Section 3 above as if this Option had not terminated until the Participant is no longer providing services to the Company.  In such case, this Option shall automatically convert and be deemed a Non-Qualified Option as of the date that is three months from termination of the Participant's employment and this Option shall continue on the same terms and conditions set forth herein until such Participant is no longer providing service to the Company or an Affiliate.

Notwithstanding the foregoing, in the event of the Participant’s Disability or death within three months after the Termination Date, the Participant or the Participant’s Survivors may exercise the Option within one year after the Termination Date, but in no event after the Option Expiration Date as specified in the Stock Option Grant Notice.

In the event the Participant’s service is terminated by the Company or an Affiliate for Cause, the Participant’s right to exercise any unexercised portion of this Option even if vested shall cease immediately as of the time the Participant is notified his or her service is terminated for Cause, and this Option shall thereupon terminate.  Notwithstanding anything herein to the contrary, if subsequent to the Participant’s termination, but prior to the exercise of the Option, the Administrator determines that, either prior or subsequent to the Participant’s termination, the Participant engaged in conduct which would constitute Cause, then the Participant shall immediately cease to have any right to exercise the Option and this Option shall thereupon terminate.

In the event of the Disability of the Participant, as determined in accordance with the Plan, the Option shall be exercisable within one year after the Participant’s termination of service due to Disability or, if earlier, on or prior to the Option Expiration Date as specified in the Stock Option Grant Notice.  In such event, the Option shall be exercisable:

	
 
	
(a)
	
to the extent that the Option has become exercisable but has not been exercised as of the date of the Participant’s termination of service due to Disability; and

2

 

	
 
	
(b)
	
in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of the Participant’s termination of service due to Disability of any additional vesting rights that would have accrued on the next vesting date had the Participant not become Disabled.  The proration shall be based upon the number of days accrued in the current vesting period prior to the date of the Participant’s termination of service due to Disability.

In the event of the death of the Participant while an Employee, director or Consultant of the Company or of an Affiliate, the Option shall be exercisable by the Participant’s Survivors within one year after the date of death of the Participant or, if earlier, on or prior to the Option Expiration Date as specified in the Stock Option Grant Notice.  In such event, the Option shall be exercisable:

	
 
	
(x)
	
to the extent that the Option has become exercisable but has not been exercised as of the date of death; and

	
 
	
(y)
	
in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of death of any additional vesting rights that would have accrued on the next vesting date had the Participant not died.  The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant’s date of death.

	
 
	
5.
	
METHOD OF EXERCISING OPTION.

Subject to the terms and conditions of this Agreement, the Option may be exercised by written notice to the Company or its designee, in substantially the form of Exhibit A attached hereto (or in such other form acceptable to the Company, which may include electronic notice).  Such notice shall state the number of Shares with respect to which the Option is being exercised and shall be signed by the person exercising the Option (which signature may be provided electronically in a form acceptable to the Company).  Payment of the Exercise Price for such Shares shall be made in accordance with Paragraph 11 of the Plan.  The Company shall deliver such Shares as soon as practicable after the notice shall be received, provided, however, that the Company may delay issuance of such Shares until completion of any action or obtaining of any consent, which the Company deems necessary under any applicable law (including, without limitation, state securities or “blue sky” laws).  The Shares as to which the Option shall have been so exercised shall be registered in the Company’s share register in the name of the person so exercising the Option (or, if the Option shall be exercised by the Participant and if the Participant shall so request in the notice exercising the Option, shall be registered in the Company’s share register in the name of the Participant and another person jointly, with right of survivorship) and shall be delivered as provided above to or upon the written order of the person exercising the Option.  In the event the Option shall be exercised, pursuant to Section 4 hereof, by any person other than the Participant, such notice shall be accompanied by appropriate proof of the right of such person to exercise the Option.  All Shares that shall be purchased upon the exercise of the Option as provided herein shall be fully paid and nonassessable.

3

 

	
 
	
6.
	
PARTIAL EXERCISE.

Exercise of this Option to the extent above stated may be made in part at any time and from time to time within the above limits, except that no fractional share shall be issued pursuant to this Option.

	
 
	
7.
	
NON‐ASSIGNABILITY.

The Option shall not be transferable by the Participant otherwise than by will or by the laws of descent and distribution.  If this Option is a Non-Qualified Option then it may also be transferred pursuant to a qualified domestic relations order as defined by the Code or Title I of the Employee Retirement Income Security Act or the rules thereunder and the Participant, with the approval of the Administrator, may transfer the Option for no consideration to or for the benefit of the Participant’s Immediate Family (including, without limitation, to a trust for the benefit of the Participant’s Immediate Family or to a partnership or limited liability company for one or more members of the Participant’s Immediate Family), subject to such limits as the Administrator may establish, and the transferee shall remain subject to all the terms and conditions applicable to the Option prior to such transfer and each such transferee shall so acknowledge in writing as a condition precedent to the effectiveness of such transfer.  The term “Immediate Family” shall mean the Participant’s spouse, former spouse, parents, children, stepchildren, adoptive relationships, sisters, brothers, nieces, nephews and grandchildren (and, for this purpose, shall also include the Participant).  Except as provided above in this paragraph, the Option shall be exercisable, during the Participant’s lifetime, only by the Participant (or, in the event of legal incapacity or incompetency, by the Participant’s guardian or representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process.  Any attempted transfer, assignment, pledge, hypothecation or other disposition of the Option or of any rights granted hereunder contrary to the provisions of this Section 7, or the levy of any attachment or similar process upon the Option shall be null and void.

	
 
	
8.
	
NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

The Participant shall have no rights as a stockholder with respect to Shares subject to this Agreement until registration of the Shares in the Company’s share register in the name of the Participant.  Except as is expressly provided in the Plan with respect to certain changes in the capitalization of the Company, no adjustment shall be made for dividends or similar rights for which the record date is prior to the date of such registration.

	
 
	
9.
	
ADJUSTMENTS.

The Plan contains provisions covering the treatment of Options in a number of contingencies such as stock splits and mergers.  Provisions in the Plan for adjustment with respect to stock subject to Options and the related provisions with respect to successors to the business of the Company are hereby made applicable hereunder and are incorporated herein by reference, including, but not limited to, the acceleration of vesting provision contained in Paragraph 25 of the Plan.

4

 

	
 
	
10.
	
TAXES.

The Participant acknowledges and agrees that (i) any income or other taxes due from the Participant with respect to this Option or the Shares issuable pursuant to this Option shall be the Participant’s responsibility; (ii) the Participant was free to use professional advisors of his or her choice in connection with this Agreement, has received advice from his or her professional advisors in connection with this Agreement, understands its meaning and import, and is entering into this Agreement freely and without coercion or duress; (iii) the Participant has not received and is not relying upon any advice, representations or assurances made by or on behalf of the Company or any Affiliate or any employee of or counsel to the Company or any Affiliate regarding any tax or other effects or implications of the Option, the Shares or other matters contemplated by this Agreement; and (iv) neither the Administrator, the Company, its Affiliates, nor any of its officers or directors, shall be held liable for any applicable costs, taxes, or penalties associated with the Option if, in fact, the Internal Revenue Service were to determine that the Option constitutes deferred compensation under Section 409A of the Code.

If this Option is designated in the Stock Option Grant Notice as a Non-Qualified Option or if the Option is an ISO and is converted into a Non-Qualified Option and such Non-Qualified Option is exercised, the Participant agrees that the Company may withhold from the Participant’s remuneration, if any, the minimum statutory amount of federal, state and local withholding taxes attributable to such amount that is considered compensation includable in such person’s gross income.  At the Company’s discretion, the amount required to be withheld may be withheld in cash from such remuneration, or in kind from the Shares otherwise deliverable to the Participant on exercise of the Option.  The Participant further agrees that, if the Company does not withhold an amount from the Participant’s remuneration sufficient to satisfy the Company’s income tax withholding obligation, the Participant will reimburse the Company on demand, in cash, for the amount under-withheld.

	
 
	
11.
	
PURCHASE FOR INVESTMENT.

Unless the offering and sale of the Shares to be issued upon the particular exercise of the Option shall have been effectively registered under the Securities Act, the Company shall be under no obligation to issue the Shares covered by such exercise unless the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act and until the following conditions have been fulfilled:

	
 
	
(a)
	
The person(s) who exercise the Option shall warrant to the Company, at the time of such exercise, that such person(s) are acquiring such Shares for their own respective accounts, for investment, and not with a view to, or for sale in connection with, the distribution of any such Shares, in which event the person(s) acquiring such Shares shall be bound by the provisions of the following legend which shall be endorsed upon any certificate(s) evidencing the Shares issued pursuant to such exercise:

“The shares represented by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a pledgee, unless (1) either (a) a Registration Statement with respect to 

5

 

such shares shall be effective under the Securities Act of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws;” and

	
 
	
(b)
	
If the Company so requires, the Company shall have received an opinion of its counsel that the Shares may be issued upon such particular exercise in compliance with the Securities Act without registration thereunder.  Without limiting the generality of the foregoing, the Company may delay issuance of the Shares until completion of any action or obtaining of any consent, which the Company deems necessary under any applicable law (including without limitation state securities or “blue sky” laws).

	
 
	
12.
	
RESTRICTIONS ON TRANSFER OF SHARES.

12.1 The Participant agrees that in the event the Company proposes to offer for sale to the public any of its equity securities and such Participant is requested by the Company and any underwriter engaged by the Company in connection with such offering to sign an agreement restricting the sale or other transfer of Shares, then it will promptly sign such agreement and will not transfer, whether in privately negotiated transactions or to the public in open market transactions or otherwise, any Shares or other securities of the Company held by him or her during such period as is determined by the Company and the underwriters, not to exceed 180 days following the closing of the offering, plus such additional period of time as may be required to comply with FINRA rules or similar rules thereto promulgated by another regulatory authority (such period, the “Lock-Up Period”).  Such agreement shall be in writing and in form and substance reasonably satisfactory to the Company and such underwriter and pursuant to customary and prevailing terms and conditions.  Whether or not the Participant has signed such an agreement, the Company may impose stop-transfer instructions with respect to the Shares or other securities of the Company subject to the foregoing restrictions until the end of the Lock-Up Period.

12.2 The Participant acknowledges and agrees that neither the Company, its shareholders nor its directors and officers, has any duty or obligation to disclose to the Participant any material information regarding the business of the Company or affecting the value of the Shares before, at the time of, or following a termination of the service of the Participant by the Company, including, without limitation, any information concerning plans for the Company to make a public offering of its securities or to be acquired by or merged with or into another firm or entity.

	
 
	
13.
	
NO OBLIGATION TO MAINTAIN RELATIONSHIP.

The Participant acknowledges that: (i) the Company is not by the Plan or this Option obligated to continue the Participant as an employee, director or Consultant of the Company or an Affiliate; (ii) the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (iii) the grant of the Option is a one-time benefit which does not create any contractual or other right to receive future grants of options, or benefits in 

6

 

lieu of options; (iv) all determinations with respect to any such future grants, including, but not limited to, the times when options shall be granted, the number of shares subject to each option, the option price, and the time or times when each option shall be exercisable, will be at the sole discretion of the Company; (v) the Participant’s participation in the Plan is voluntary; (vi) the value of the Option is an extraordinary item of compensation which is outside the scope of the Participant’s employment or consulting contract, if any; and (vii) the Option is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.

	
 
	
14.
	
IF OPTION IS INTENDED TO BE AN ISO. 

If this Option is designated in the Stock Option Grant Notice as an ISO so that the Participant (or the Participant’s Survivors) may qualify for the favorable tax treatment provided to holders of Options that meet the standards of Section 422 of the Code then any provision of this Agreement or the Plan which conflicts with the Code so that this Option would not be deemed an ISO is null and void and any ambiguities shall be resolved so that the Option qualifies as an ISO.  The Participant should consult with the Participant’s own tax advisors regarding the tax effects of the Option and the requirements necessary to obtain favorable tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements.

Notwithstanding the foregoing, to the extent that the Option is designated in the Stock Option Grant Notice as an ISO and is not deemed to be an ISO pursuant to Section 422(d) of the Code because the aggregate Fair Market Value (determined as of the Date of Option Grant) of any of the Shares with respect to which this ISO is granted becomes exercisable for the first time during any calendar year in excess of $100,000, the portion of the Option representing such excess value shall be treated as a Non-Qualified Option and the Participant shall be deemed to have taxable income measured by the difference between the then Fair Market Value of the Shares received upon exercise and the price paid for such Shares pursuant to this Agreement. Neither the Company nor any Affiliate shall have any liability to the Participant, or any other party, if the Option (or any part thereof) that is intended to be an ISO is not an ISO or for any action taken by the Administrator, including without limitation the conversion of an ISO to a Non-Qualified Option.

	
 
	
15.
	
NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION OF AN ISO.

If this Option is designated in the Stock Option Grant Notice as an ISO then the Participant agrees to notify the Company in writing immediately after the Participant makes a Disqualifying Disposition of any of the Shares acquired pursuant to the exercise of the ISO.  A Disqualifying Disposition is defined in Section 424(c) of the Code and includes any disposition (including any sale) of such Shares before the later of (a) two years after the date the Participant was granted the ISO or (b) one year after the date the Participant acquired Shares by exercising the ISO, except as otherwise provided in Section 424(c) of the Code.  If the Participant has died before the Shares are sold, these holding period requirements do not apply and no Disqualifying Disposition can occur thereafter.

7

 

	
 
	
16.
	
NOTICES.

Any notices required or permitted by the terms of this Agreement or the Plan shall be given by recognized courier service, facsimile, registered or certified mail, return receipt requested, addressed as follows:

If to the Company: 

Albireo Pharma, Inc.

50 Milk Street, 16th Floor

Boston, MA 02109 

Attention: Chief Financial Officer

If to the Participant at the address set forth on the Stock Option Grant Notice 

or to such other address or addresses of which notice in the same manner has previously been given.  Any such notice shall be deemed to have been given upon the earlier of receipt, one business day following delivery to a recognized courier service or three business days following mailing by registered or certified mail.

	
 
	
17.
	
GOVERNING LAW.

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflict of law principles thereof.  For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to exclusive jurisdiction in Massachusetts and agree that such litigation shall be conducted in the state courts of Massachusetts or the federal courts of the United States for the District of Massachusetts.

	
 
	
18.
	
BENEFIT OF AGREEMENT.

Subject to the provisions of the Plan and the other provisions hereof, this Agreement shall be for the benefit of and shall be binding upon the heirs, executors, administrators, successors and assigns of the parties hereto.

	
 
	
19.
	
ENTIRE AGREEMENT.

This Agreement, together with the Plan, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof (with the exception of acceleration of vesting provisions contained in any other agreement with the Company).  No statement, representation, warranty, covenant or agreement not expressly set forth in this Agreement shall affect or be used to interpret, change or restrict the express terms and provisions of this Agreement. Notwithstanding the foregoing, in all events, this Agreement shall be subject to and governed by the Plan.

8

 

	
 
	
20.
	
MODIFICATIONS AND AMENDMENTS.

The terms and provisions of this Agreement may be modified or amended as provided in the Plan.

	
 
	
21.
	
WAIVERS AND CONSENTS.

Except as provided in the Plan, the terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar.  Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

	
 
	
22.
	
DATA PRIVACY.

By entering into this Agreement, the Participant:  (i) authorizes the Company and each Affiliate, and any agent of the Company or any Affiliate administering the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its Affiliates such information and data as the Company or any such Affiliate shall request in order to facilitate the grant of options and the administration of the Plan; and (ii) authorizes the Company and each Affiliate to store and transmit such information in electronic form for the purposes set forth in this Agreement.

 

 

9

 

Exhibit A

NOTICE OF EXERCISE OF STOCK OPTION

[Form for Shares registered in the United States]

To: Albireo Pharma, Inc. 

IMPORTANT NOTICE:  This form of Notice of Exercise may only be used at such time as the Company has filed a Registration Statement with the Securities and Exchange Commission under which the issuance of the Shares for which this exercise is being made is registered and such Registration Statement remains effective.

Ladies and Gentlemen:

I hereby exercise my Stock Option to purchase _________ shares (the “Shares”) of the common stock, $0.01 par value, of Albireo Pharma, Inc. (the “Company”), at the exercise price of $________ per share, pursuant to and subject to the terms of that Stock Option Grant Notice dated _______________, 201_.

I understand the nature of the investment I am making and the financial risks thereof.  I am aware that it is my responsibility to have consulted with competent tax and legal advisors about the relevant national, state and local income tax and securities laws affecting the exercise of the Option and the purchase and subsequent sale of the Shares.

I am paying the option exercise price for the Shares as follows:

 

	
	
 

 

Please issue the Shares (check one):

 

	
 
	
☐
	
 
	
to me; or 

	
 
	
 
	
 
	
 

	
 
	
☐
	
 
	
to me and ____________________________, as joint tenants with right of survivorship,

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
at the following address:

 

			
	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
 

 

Exhibit A-1

 

My mailing address for shareholder communications, if different from the address listed above, is:

 

	
	
 

	
 

	
 

 

	
	
Very truly yours,

	
 

	
 

	
Participant (signature)

	
 

	
 

	
Print Name

	
 

	
 

	
Date

 

49966821v.2

Exhibit A-2

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