Document:

Exhibit 10.4

 

RESTRICTED STOCK AGREEMENT

 

SYNTA PHARMACEUTICALS CORP.

 

AGREEMENT made as of the 2nd day of September, 2014 (the “Grant Date”), between Synta Pharmaceuticals Corp. (the “Company”), a Delaware corporation having its principal place of business in Lexington, Massachusetts and Anne C. Whitaker (the “Participant”).

 

WHEREAS, the Company desires to promote the interests of the Company by providing an incentive for the Participant , an employee of the Company or a corporation which is a parent or subsidiary of the Company, direct or indirect (an “Affiliate”);

 

WHEREAS, the Company desires to offer to the Participant shares of the Company’s common stock, $.0001 par value per share (“Common Stock”), all on the terms and conditions hereinafter set forth; and

 

WHEREAS, the Participant wishes to accept said offer.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.             Terms of Grant.  The Participant hereby accepts the offer of the Company to issue to the Participant, in accordance with the terms of this Agreement, five hundred thousand (500,000) Shares of the Company’s Common Stock (such shares, subject to adjustment pursuant to Subsection 2.1(h) hereof, the “Granted Shares”) at a purchase price per share of $.0001 (the “Purchase Price”), receipt of which is hereby acknowledged by the Participant’s prior service to the Company and which amount will be reported as income on the Participant’s W-2 for this calendar year.

 

2.1.         Forfeiture Provisions.

 

(a)           Lapsing Forfeiture Right.  In the event that for any reason the Participant is no longer an employee or consultant of the Company or an Affiliate prior to September 2, 2018 (the “Termination”), the Participant (or (or the deceased Participant’s legal representatives and/or any person or persons who acquired the Participant’s rights to the Granted Shares by will or by the laws of descent and distribution (the “Participant’s Survivor) shall, on the date of Termination, immediately forfeit to the Company (or its designee) all of the Granted Shares which have not yet lapsed in accordance with the schedule set forth below (the “Lapsing Forfeiture Right”) except as otherwise set forth in Section 2.1(b) or (c).

 

The Company’s Lapsing Forfeiture Right is as follows except as otherwise accelerated upon termination of service by the Company not for cause or by the Participant for good reason as set forth in the Employment Agreement between the Company and the Participant dated August 1, 2014 (the “Employment Agreement”)):

 

If the Participant’s Termination is prior to September 2, 2015 all of the Granted Shares shall be forfeited to the Company.  On December 2, 2015 and every three month period thereafter, if the Participant remains an employee or consultant of the Company or an Affiliate, the Lapsing Forfeiture Right shall lapse as to 6.25% of the Granted Shares and the Participant’s ownership of that portion of the Granted Shares shall be vested as of such date.

 

 

(b)           Effect of Termination for Disability or upon Death.  The following rules apply if the Participant’s Termination is by reason of Disability or death:  to the extent the Company’s Lapsing Forfeiture Right has not lapsed as of the date of the Participant’s permanent and total disability (a “Disability”) as defined in Section 22(e)(3) of the United States Internal Revenue Code of 1986, as amended (the “Code”), or death, as case may be, the Participant shall forfeit to the Company any or all of the Granted Shares subject to such Lapsing Forfeiture Right; provided, however, that the Company’s Lapsing Forfeiture Right shall be deemed to have lapsed to the extent of a pro rata portion of the Granted Shares through the date of Disability or death, as would have lapsed had the Participant not become Disabled or died, as the case may be.  The proration shall be based upon the number of days accrued in such current vesting period prior to the Participant’s date of Disability or death, as the case may be.

 

(c)           Effect of a For Cause Termination.  Notwithstanding anything to the contrary contained in this Agreement, in the event the Company or an Affiliate terminates the Participant’s employment or service for “cause” (as defined in the Employment Agreement) or in the event the Board of Directors determines, within one year after the Participant’s termination, that either prior or subsequent to the Participant’s termination the Participant engaged in conduct that would constitute “cause,” all of the Granted Shares then held by the Participant shall be forfeited to the Company immediately as of the time the Participant is notified that he or she has been terminated for “cause” or that he or she engaged in conduct which would constitute “cause”.

 

(d)           Effect of Change of Control.  If the Company is to be consolidated with or acquired by another entity in a merger, sale of all or substantially all of the Company’s assets other than a transaction to merely change the state of incorporation (a “Corporate Transaction”), the Board of Directors of the Company or, if applicable, a committee of the Board of Directors or the board of directors of any entity assuming the obligations of the Company hereunder (the “Successor Board”), shall either (i) make appropriate provisions for the continuation of this Agreement on the same terms and conditions by substituting on an equitable basis for the Granted Shares then subject to this Agreement either the consideration payable with respect to the outstanding Shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) terminate this Agreement in exchange for a cash payment equal to the Fair Market Value of the Granted Shares then subject to the Lapsing Forfeiture Right.

 

In addition, In the event of either(A) a Corporate Transaction that also constitutes a Change of Control (as defined in the Employment Agreement) where the Granted Shares are substituted in accordance with clause (d)(i) above; or (B) a Change of Control (as defined in the Employment Agreement) that does not also constitute a Corporate Transaction, and if within six months after the date of such Change of Control, (i) the Participant’s service is terminated by the Company or an Affiliate for any reason other than “cause” (as defined in the Employment Agreement); or (ii) the Participant terminates his or her service as a result of being required to change the principal location where he or she renders services to a location more than 50 miles from his or her location of employment or consultancy immediately prior to the Change of Control; or (iii) the Participant terminates his or her service after their occurs a material adverse change in a Participant’s duties, authority or responsibilities which causes such Participant’s position with the Company to become of significantly less responsibility or authority than such Participant’s position was immediately prior to the Change of Control, then the Lapsing Forfeiture Right that has not lapsed or expired shall terminate as of the date of termination of such Participant.

 

(e)           Escrow.  The certificates representing all Granted Shares acquired by the Participant hereunder which from time to time are subject to the Lapsing Forfeiture Right shall be delivered to the Company and the Company shall hold such Granted Shares in escrow as provided in this Subsection 2.1(e).  Upon the request of the Participant, the Company shall promptly release from escrow and deliver to the Participant the whole number of Granted Shares, if any, as to which the Company’s Lapsing Forfeiture Right has lapsed and without the legend set forth in Section 5. In the event of

 

2

 

forfeiture to the Company of Granted Shares subject to the Lapsing Forfeiture Right, the Company shall release from escrow and cancel a certificate for the number of Granted Shares so forfeited.  Any securities distributed in respect of the Granted Shares held in escrow, including, without limitation, shares issued as a result of stock splits, stock dividends or other recapitalizations, shall also be held in escrow in the same manner as the Granted Shares.

 

(f)            Prohibition on Transfer.  The Participant recognizes and agrees that all Granted Shares which are subject to the Lapsing Forfeiture Right may not be sold, transferred, assigned, hypothecated, pledged, encumbered or otherwise disposed of, whether voluntarily or by operation of law, other than to the Company (or its designee).  However, the Participant, with the approval of the Board of Directors of the Company or, if applicable, a committee of the Board of Directors, may transfer the Granted Shares 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 Board of Directors of the Company or, if applicable, a committee of the Board of Directors, may establish, and the transferee shall remain subject to all the terms and conditions applicable to this Agreement 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 and nephews and grandchildren and, for this purpose, shall also include the Participant.  The Company shall not be required to transfer any Granted Shares on its books which shall have been sold, assigned or otherwise transferred in violation of this Subsection 2.1(f), or to treat as the owner of such Granted Shares, or to accord the right to vote as such owner or to pay dividends to, any person or organization to which any such Granted Shares shall have been so sold, assigned or otherwise transferred, in violation of this Subsection 2.1(f).

 

(g)           Failure to Deliver Granted Shares to be Forfeited.  In the event that the Granted Shares to be forfeited to the Company under this Agreement are not in the Company’s possession pursuant to Subsection 2.1(e) above or otherwise and the Participant or the Participant’s Survivor fails to deliver such Granted Shares to the Company (or its designee), the Company may immediately take such action as is appropriate to transfer record title of such Granted Shares from the Participant to the Company (or its designee) and treat the Participant and such Granted Shares in all respects as if delivery of such Granted Shares had been made as required by this Agreement.  The Participant hereby irrevocably grants the Company a power of attorney which shall be coupled with an interest for the purpose of effectuating the preceding sentence.

 

(h)           Adjustments.

 

(i)            If the Company shall pay a stock dividend or declare a stock split on or with respect to any of its Common Stock, or otherwise distribute securities of the Company to the holders of its Common Stock, the number of shares of stock or other securities of the Company issued with respect to the Common Stock then subject to the restrictions contained in this Agreement shall be added to the Granted Shares subject to this Agreement.  If the Company shall distribute to its stockholders securities of another corporation, the securities of such other corporation, distributed with respect to the Common Stock then subject to the restrictions contained in this Agreement, shall be added to the Granted Shares subject to this Agreement.

 

(ii)           If the outstanding shares of the Company’s Common Stock shall be subdivided into a greater number of shares or combined into a smaller number of shares, or in the event of a reclassification of the outstanding shares of the Company’s Common Stock, or if the Company shall be a party to a merger, consolidation or capital reorganization, there shall be substituted for the Granted Shares then subject to the restrictions contained in this Agreement such amount and

 

3

 

kind of securities as are issued in such subdivision, combination, reclassification, merger, consolidation or capital reorganization in respect of the Common Stock subject to this Agreement.

 

2.2                               General Restrictions on Transfer of Granted Shares.

 

(a)           If in connection with a registration statement filed by the Company pursuant to the Securities Act of 1933, as amended (the “1933 Act”), the Company or its underwriter so requests, the Participant will agree not to sell any of his or her Granted Shares whether or not the Lapsing Forfeiture Right has lapsed for a period not to exceed the lesser of: (i) 210 days following the effectiveness of such registration statement or (ii) such period as the officers and directors of the Company agree not to sell their Common Stock of the Company.

 

(b)           The Participant acknowledges and agrees that neither the Company nor, 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, 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.

 

3.             Securities Law Compliance.  The Participant specifically acknowledges and agrees that any sales of Granted Shares shall be made in accordance with the requirements of the 1933 Act.

 

4.             Rights as a Stockholder.  The Participant shall have all the rights of a stockholder with respect to the Granted Shares, including voting and dividend rights, subject to the transfer and other restrictions set forth herein.

 

5.             Legend.  All certificates representing the Granted Shares to be issued to the Participant pursuant to this Agreement shall have endorsed thereon a legend substantially as follows:

 

“The shares represented by this certificate are subject to restrictions set forth in a Restricted Stock Agreement dated as of September 2, 2014 with this Company, a copy of which Agreement is available for inspection at the offices of the Company or will be made available upon request.”

 

6.             Tax Liability of the Participant and Payment of Taxes.  The Participant acknowledges and agrees that any income or other taxes due from the Participant with respect to the Granted Shares issued pursuant to this Agreement, including, without limitation, the Lapsing Forfeiture Right, shall be the Participant’s responsibility.  Without limiting the foregoing, the Participant agrees that, to the extent that the lapsing of restrictions on disposition of any of the Granted Shares or the declaration of dividends on any such shares before the lapse of such restrictions on disposition results in the Participant’s being deemed to be in receipt of earned income under the provisions of the Code, the Company shall be entitled to immediate payment from the Participant of the amount of any tax required to be withheld by the Company.  In connection with the foregoing, the Participant agrees that if an arrangement to pay the withholding obligation in cash has not been received by the Company prior to the date that Granted Shares shall be released from the Lapsing Forfeiture Right, the Company shall authorize a registered broker(s) (the “Broker”) to sell on the date that the Granted Shares shall be released from the Lapsing Forfeiture Right such number of Granted Shares as the Company instructs the Broker to sell to satisfy the Company’s withholding obligations, after deduction of the Broker’s commission, and the Broker shall remit to the Company the cash necessary in order for the Company to satisfy its withholding obligation.  To the extent the proceeds of such sale exceed the Company’s tax withholding obligation the Company agrees to pay such excess cash to the Participant as soon as practicable.  In addition, if such sale is not

 

4

 

sufficient to pay the Company’s tax withholding obligation the Participant agrees to pay to the Company as soon as practicable, including through additional payroll withholding, the amount of any tax withholding obligation that is not satisfied by the sale of shares of Common Stock. The Participant agrees to hold the Company and the Broker harmless from all costs, damages or expenses relating to any such sale.  The Participant acknowledges that the Company and the Broker are under no obligation to arrange for such sale at any particular price.  In connection with such sale of Granted Shares, the Participant shall execute any such documents requested by the Broker in order to effectuate the sale of the Granted Shares and payment of the withholding obligation to the Company.  The Company shall not deliver any shares of Common Stock to the Participant until all of the Company’s withholding obligations have been satisfied.  The Participant acknowledges that this paragraph is intended to comply with Section 10b5-1(c)(1(i)(B) under the Securities Exchange Act of 1934, as amended. Notwithstanding the foregoing, the Company shall have the right to require the Company payments be made in cash instead of through the sale of shares of Common Stock if it reasonably believes that the sale of shares would violate applicable securities laws.

 

Upon execution of this Agreement, the Participant may file an election under Section 83 of the Code.  The Participant acknowledges that if he does not file such an election, as the Granted Shares are released from the Lapsing Forfeiture Right in accordance with Section 2.1, the Participant will have income for tax purposes equal to the fair market value of the Granted Shares at such date, less the price paid for the Granted Shares by the Participant.

 

7.             Equitable Relief.  The Participant specifically acknowledges and agrees that in the event of a breach or threatened breach of the provisions of this Agreement, including the attempted transfer of the Granted Shares by the Participant in violation of this Agreement, monetary damages may not be adequate to compensate the Company, and, therefore, in the event of such a breach or threatened breach, in addition to any right to damages, the Company shall be entitled to equitable relief in any court having competent jurisdiction.  Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for any such breach or threatened breach.

 

8.             No Obligation to Maintain Relationship.  The Company is not by this Agreement obligated to continue the Participant as an employee or consultant of the Company or an Affiliate.  The Participant acknowledges:  (i) that the grant of the Shares is discretionary in nature and is a one-time benefit which does not create any contractual or other right to receive future grants of shares, or benefits in lieu of shares; (ii) that all determinations with respect to any such future grants, including, but not limited to, the times when shares shall be granted, the number of shares to be granted, the purchase price, and the time or times when each share shall be free from a lapsing forfeiture right, will be at the sole discretion of the Company; (iii) that the Participant’s participation in this Agreement is voluntary; (iv) that the value of the Shares is an extraordinary item of compensation which is outside the scope of the Participant’s employment contract, if any; and (v) that the Shares are 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.

 

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

 

If to the Company:

 

Synta Pharmaceuticals Corp.

45 Hartwell Avenue

Lexington, MA 02421

Attn:  Stock Plan Administrator

 

5

 

If to the Participant, the Participant’s Company email address or the mailing address provided to the Company on the Participant’s application or resume, 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 on the earliest of receipt, one business day following delivery by the sender to a recognized courier service, or three business days following mailing by registered or certified mail.

 

10.          Benefit of Agreement.  Subject to the 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.

 

11.          Governing Law.  This Agreement shall be construed and enforced 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, whether at law or in equity, the parties hereby consent to exclusive jurisdiction in Massachusetts and agree that such litigation shall be conducted in the courts of the Commonwealth of Massachusetts or the federal courts of the United States for the District of Massachusetts.

 

12.          Severability.  If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, then such provision or provisions shall be modified to the extent necessary to make such provision valid and enforceable, and to the extent that this is impossible, then such provision shall be deemed to be excised from this Agreement, and the validity, legality and enforceability of the rest of this Agreement shall not be affected thereby.

 

13.          Entire Agreement.  This Agreement, together with the Employment Agreement, constitutes 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.  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.

 

14.          Modifications and Amendments; Waivers and Consents.  The terms and provisions of this Agreement may be modified or amended by the Company in a manner which is not adverse to the Participant. 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.

 

15.          Consent of Spouse/Domestic Partner.  If the Participant has a spouse or domestic partner as of the date of this Agreement, the Participant’s spouse or domestic partner shall execute a Consent of Spouse/Domestic Partner in the form of Exhibit A hereto, effective as of the date hereof.  Such consent shall not be deemed to confer or convey to the spouse or domestic partner any rights in the Granted Shares that do not otherwise exist by operation of law or the agreement of the parties.  If the Participant subsequent to the date hereof, marries, remarries or applies to the Company for domestic partner benefits, the Participant shall, not later than 60 days thereafter, obtain his or her new spouse/domestic partner’s acknowledgement of and consent to the existence and binding effect of all restrictions contained in this Agreement by having such spouse/domestic partner execute and deliver a Consent of Spouse/Domestic Partner in the form of Exhibit A.

 

6

 

16.          Counterparts.  This Agreement may be executed in one or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

17.          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 providing record keeping 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 Shares and the administration of the Company’s stock records; 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.

 

[THE NEXT PAGE IS THE SIGNATURE PAGE]

 

7

 

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

 

	
 
    	
SYNTA   PHARMACEUTICALS CORP.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Keith R. Gollust
    
	
 
    	
Name:
    	
Keith   R. Gollust
    
	
 
    	
Title:
    	
Chairman   of the Board of Directors
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Participant:
    
	
 
    	
 
    	
 
    
	
 
    	
/s/   Anne C. Whitaker
    
	
 
    	
Print   Name: Anne C. Whitaker
    

 

8

 

EXHIBIT A

 

CONSENT OF SPOUSE/DOMESTIC PARTNER

 

I,                                                         , spouse or domestic partner of                                                   , acknowledge that I have read the RESTRICTED STOCK AGREEMENT dated as of September 2, 2014 (the “Agreement”) to which this Consent is attached as Exhibit A and that I know its contents.  Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Agreement.  I am aware that by its provisions the Granted Shares granted to my spouse/domestic partner pursuant to the Agreement are subject to a Lapsing Forfeiture Right in favor of Synta Pharmaceuticals Corp. (the “Company”) and that, accordingly, I may be required to forfeit to the Company any or all of the Granted Shares of which I may become possessed as a result of a gift from my spouse/domestic partner or a court decree and/or any property settlement in any domestic litigation.

 

I hereby agree that my interest, if any, in the Granted Shares subject to the Agreement shall be irrevocably bound by the Agreement and further understand and agree that any community property interest I may have in the Granted Shares shall be similarly bound by the Agreement.

 

I agree to the Lapsing Forfeiture Right described in the Agreement and I hereby consent to the forfeiture of the Granted Shares to the Company by my spouse/domestic partner or my spouse/domestic partner’s legal representative in accordance with the provisions of the Agreement.  Further, as part of the consideration for the Agreement, I agree that at my death, if I have not disposed of any interest of mine in the Granted Shares by an outright bequest of the Granted Shares to my spouse or domestic partner, then the Company shall have the same rights against my legal representative to exercise its rights to the Granted Shares with respect to any interest of mine in the Granted Shares as it would have had pursuant to the Agreement if I had acquired the Granted Shares pursuant to a court decree in domestic litigation.

 

I AM AWARE THAT THE LEGAL, FINANCIAL AND RELATED MATTERS CONTAINED IN THE AGREEMENT ARE COMPLEX AND THAT I AM FREE TO SEEK INDEPENDENT PROFESSIONAL GUIDANCE OR COUNSEL WITH RESPECT TO THIS CONSENT.  I HAVE EITHER SOUGHT SUCH GUIDANCE OR COUNSEL OR DETERMINED AFTER REVIEWING THE AGREEMENT CAREFULLY THAT I WILL WAIVE SUCH RIGHT.

 

Dated as of the                day of                                 , 20    .

 

	
 
    	
 
    
	
 
    	
Print   name:
    

 

A-1Exhibit 10.5

 

	
NON-QUALIFIED STOCK OPTION   AGREEMENT
    	
250,000   SHARES OF COMMON STOCK,
    
	
 
    	
$.0001   PAR VALUE PER SHARE
    

 

SYNTA PHARMACEUTICALS CORP.

 

September 2, 2014

 

As of September 2, 2014 (the “Grant Date”), Synta Pharmaceuticals Corp. (the “Company”), a Delaware corporation, grants to Anne C. Whitaker (the “Participant”) the right and option (the “Option”) to purchase up to 250,000 shares of the common stock, $.0001 par value per share, of the Company (the “Shares”) at a purchase price of $4.00 per share (the “Purchase Price”) on the terms and conditions and subject to all the limitations set forth in this Agreement.  For the purpose of this Agreement, the initial vesting date shall be September 2, 2015 (“Initial Vesting Date”).

 

	
SYNTA PHARMACEUTICALS CORP.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Keith R. Gollust
    	
 
    
	
 
    	
Keith   R. Gollust
    	
 
    
	
 
    	
Chairman   of the Board of Directors
    	
 
    

 

 

1.                                      GRANT OF OPTION.

 

The Company hereby grants to the Participant, as of the Grant Date, the right and option to purchase all or any part of the aggregate number of Shares set forth on the signed cover page of this Agreement, on the terms and conditions and subject to all the limitations set forth herein, under United States securities and tax laws. Except as expressly provided in this Agreement, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of the Shares.  Except as expressly provided in this Agreement, no adjustments shall be made for dividends paid in cash or in property (including without limitation, securities) of the Company.

 

2.                                      PURCHASE PRICE.

 

The purchase price of the Shares covered by the Option shall be the Purchase Price set forth on the cover page of this Agreement, subject to adjustment, as provided in Section 9 of this Agreement, in the event of a stock split, reverse stock split or other events affecting the holders of Shares.  Payment shall be made in accordance with Section 5 of this Agreement.

 

3.                                      EXERCISABILITY OF OPTION.

 

Subject to the terms and conditions set forth in this Agreement, the Option granted hereby shall become exercisable in cumulative installments of (i) 25% of the Shares on the Initial Vesting Date, and (ii) 6.25% of the Shares on the last day of each successive three-month period thereafter.  Notwithstanding the foregoing, the Option shall become vested and exercisable in accordance with the terms and conditions set forth in Sections 9B and C hereof and upon termination by the Company of the Participant without cause or by the Participant for good reason as set forth in the Employment Agreement between the Company and the Participant dated August 1, 2014 (the “Employment Agreement”).

 

4.                                      TERM OF OPTION.

 

The Option shall terminate ten years from the date of this Agreement, but shall be subject to earlier termination as provided herein.

 

If the Participant ceases to be an employee, or consultant of the Company or any parent or subsidiary, direct or indirect, of the Company (an “Affiliate”) (for any reason other than the death or permanent and total disability as defined in Section 22(e)(3) of the United States Internal Revenue Code of 1986, as amended (the “Code”) of the Participant (a “Disability”) or termination of the Participant for “cause” (as defined in the Participant’s Employment Agreement), the Option may be exercised, if it has not previously terminated, within three months after the date the Participant ceases to be an employee or consultant of the Company or of an Affiliate, or within the originally prescribed term of the Option, whichever is earlier, but may not be exercised thereafter.  In such event, the Option shall be exercisable only to the extent that the Option has become exercisable and is in effect at the date of such cessation of service.

 

Notwithstanding the foregoing, in the event of the Participant’s Disability or death within three months after the termination of service, the Participant or the deceased Participant’s legal representatives and/or any person or persons who acquired the Participant’s rights to the Option by will or by the laws of descent and distribution (the “Participant’s Survivors”) may exercise the Option within one year after the date of the Participant’s termination of service, but in no event after the date of expiration of the term of the Option.

 

1

 

In the event the Participant’s service is terminated by the Company or by an Affiliate for “cause” (as defined in the Participant’s Employment Agreement), the Participant’s right to exercise any unexercised portion of the Option shall cease immediately as of the time the Participant is notified his or her service is terminated for “cause,” and the 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 Board of Directors of the Company 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 the Option shall thereupon terminate.

 

In the event of the Disability of the Participant, the Option shall be exercisable within one year after the Participant’s termination of service or, if earlier, within the term originally prescribed by the Option.  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 Disability; and

 

(b)                                 in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion through the date of 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 Disability.

 

The Board of Directors of the Company or, if applicable, a committee of the Board of Directors, shall make the determination both of whether a Disability has occurred and the date of its occurrence (unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected or approved by the Board of Directors of the Company or, if applicable, a committee of the Board of Directors, the cost of which examination shall be paid for by the Company.

 

In the event of the death of the Participant while an employee 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, within the originally prescribed term of the Option.  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 prescribed by the Company or its designee together with provision for payment of the full Purchase Price in accordance with this Section 5 for the Shares as to which the Option is being exercised.  Such notice shall state the number of Shares with respect to which the Option is being exercised and shall be signed by the person

 

2

 

exercising the Option.  Payment of the purchase price for such Shares shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Board of Directors of the Company or, if applicable, a committee of the Board of Directors, through delivery of shares of common stock of the Company having a Fair Market Value (as defined below) equal as of the date of the exercise to the cash exercise price of the Option and held for at least six months, or (c) at the discretion of the Board of Directors of the Company or, if applicable, a committee of the Board of Directors, by having the Company retain from the shares otherwise issuable upon exercise of the Option, a number of shares having a Fair Market Value equal as of the date of exercise to the exercise price of the Option, or (d) at the discretion of the Board of Directors of the Company or, if applicable, a committee of the Board of Directors, by delivery of the grantee’s personal recourse note, bearing interest payable not less than annually at no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, or (e) in accordance with a cashless exercise program established with a securities brokerage firm previously approved by the Company, or (f) at the discretion of the Board of Directors of the Company or, if applicable, a committee of the Board of Directors, by any combination of (a), (b), (c) (d) and (e) above or (g) at the discretion of the Board of Directors of the Company or, if applicable, a committee of the Board of Directors, payment of such other lawful consideration as the Board of Directors of the Company or, if applicable, a committee of the Board of Directors may determine.

 

For purposes of this Agreement, Fair Market Value of a Share of common stock means:

 

(1)                                 If the common stock of the Company is listed on a national securities exchange or traded in the over-the-counter market and sales prices are regularly reported for the common stock, the closing or last price of the common stock on the composite tape or other comparable reporting system for the trading day on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date;

 

(2)                                 If the common stock of the Company is not traded on a national securities exchange but is traded on the over-the-counter market, if sales prices are not regularly reported for the common stock for the trading day referred to in clause (1), and if bid and asked prices for the common stock are regularly reported, the mean between the bid and the asked price for the common stock at the close of trading in the over-the-counter market for the trading day on which common stock was traded on the applicable date and if such applicable date is not a trading day, the last market trading day prior to such date; and

 

(3)                                 If the common stock is neither listed on a national securities exchange nor traded in the over-the-counter market, such value as the Board of Directors of the Company, in good faith, shall determine.

 

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 the 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 the 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 or 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.  However, 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.  Except as provided in the previous sentence, 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.  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).

 

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 this Agreement 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.

 

Upon the occurrence of any of the following events, the Participant’s rights with respect to the Option, except to the extent previously exercised shall be adjusted as hereinafter provided:

 

A.                                    Stock Dividends and Stock Splits.  If (i) shares of common stock of the Company shall be subdivided or combined into a greater or smaller number of shares or if the Company shall issue any shares of common stock as a stock dividend on its outstanding common stock, or (ii) 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 of common stock, the Shares deliverable upon the exercise of the Option shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made including, in the Purchase Price per Share to reflect such events.

 

B.                                    Corporate Transactions.  If the Company is to be consolidated with or acquired by another entity in a merger, sale of all or substantially all of the Company’s assets other than a

 

4

 

transaction to merely change the state of incorporation (a “Corporate Transaction”), the Board of Directors of the Company or, if applicable, a committee of the Board of Directors or the board of directors of any entity assuming the obligations of the Company hereunder (the “Successor Board”), shall, as to the unexercised portion of the Option, either (i) make appropriate provision for the continuation of the Option by substituting on an equitable basis for the Shares either the consideration payable with respect to the outstanding shares of common stock in connection with the Corporate Transaction or securities of any successor or acquiring entity; or (ii) upon written notice to the Participant, provide that the Option must be exercised, within a specified number of days of the date of such notice, at the end of which period the Option shall terminate (the Option shall for purposes of this clause (ii) be made fully vested and exercisable immediately prior to its termination); or (iii) terminate the Option in exchange for a cash payment equal to the excess of the Fair Market Value of the Shares over the Purchase Price thereof (the Option shall for purposes of this clause (iii) be made fully vested and immediately exercisable immediately prior to its termination).

 

C.                                    Change of Control. In the event of either (a) a Corporate Transaction that also constitutes a Change of Control (as defined in the Employment Agreement), where the Option is assumed or substituted in accordance with Subparagraph B clause (i) above; or (b) a Change of Control (as defined in the Employment Agreement) that does not also constitute a Corporate Transaction, and if within six months after the date of such Change of Control, (i) the Participant’s service is terminated by the Company or an Affiliate for any reason other than “cause” (as defined in the Employment Agreement); or (ii) the Participant terminates his or her service as a result of being required to change the principal location where he or she renders services to a location more than 50 miles from his or her location of employment or consultancy immediately prior to the Change of Control; or (iii) the Participant terminates his or her service after their occurs a material adverse change in a Participant’s duties, authority or responsibilities which causes such Participant’s position with the Company to become of significantly less responsibility or authority than such Participant’s position was immediately prior to the Change of Control, then the Option shall become fully vested and immediately exercisable as of the date of termination, unless in the Option has otherwise expired or been terminated pursuant to the terms hereof prior to such date.

 

D.                                    Recapitalization or Reorganization.  In the event of a recapitalization or reorganization of the Company other than a Corporate Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the outstanding shares of common stock of the Company, the Participant upon exercising the Option after the recapitalization or the reorganization shall be entitled to receive for the purchase price paid upon such exercise the number of replacement securities which would have been received if the Option had been exercised prior to such recapitalization or reorganization.

 

E.                                     Dissolution or Liquidation of the Company.  Upon the dissolution or liquidation of the Company, the Option will terminate and become null and void; provided, however, that if the rights of the Participant or the Participant’s Survivors have not otherwise terminated and expired, the Participant or the Participant’s Survivors will have the right immediately prior to such dissolution or liquidation to exercise the Option to the extent that the Option is exercisable as of the date immediately prior to such dissolution or liquidation.

 

10.                               TAXES.

 

The Participant acknowledges that upon exercise of the Option the Participant will 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.  The Participant acknowledges that any income or other taxes due from him or her with respect to the Option or the Shares issuable pursuant to the Option shall be the Participant’s responsibility.

 

5

 

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 Fair Market Value of the Shares to be withheld shall be determined as of the most recent practicable date prior to the date of exercise.  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 of 1933, as now in force or hereafter amended (the “1933 Act”), the Company shall be under no obligation to issue the Shares covered by such exercise unless 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 the 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 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 1933 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 Shares acquired by the Participant pursuant to the exercise of the Option granted hereby shall not be transferred by the Participant except as permitted herein.

 

12.2                        If, in connection with a registration statement filed by the Company pursuant to the 1933 Act, the Company or its underwriter so requests, the Participant will agree not to sell any Shares for a period not to exceed 210 days following the effectiveness of such registration.

 

12.3                        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

 

6

 

information regarding the business of the Company or affecting the value of the Shares before, at the time of, or following a termination of 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 Company is not by the Option obligated to continue the Participant as an employee or consultant of the Company or of an Affiliate.  The Participant acknowledges:  (i) that the grant of the Option is discretionary in nature and is a one-time benefit which does not create any contractual or other right to receive future grants of options, or benefits in lieu of options; (ii) that 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; (iii) that the value of the Option is an extraordinary item of compensation which is outside the scope of the Participant’s employment contract, if any; (iv) that the Participant’s participation in this Agreement is voluntary; and (v) that 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.                               NOTICES.

 

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

 

If to the Company:

 

Synta Pharmaceuticals Corp.

45 Hartwell Avenue

Lexington, MA 02421

Attention: Stock Plan Administrator

 

If to the Participant, the Participant’s Company email address or the mailing address provided to the Company on the Participant’s application or resume, 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.

 

15.                               GOVERNING LAW.

 

This Agreement shall be construed and enforced in accordance with the law 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 the Commonwealth of Massachusetts and agree that such litigation shall be conducted in the courts of Middlesex County, Massachusetts or the federal courts of the United States for the District of Massachusetts.

 

16.                               BENEFIT OF AGREEMENT.

 

Subject to the 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.

 

7

 

17.                               ENTIRE AGREEMENT.

 

This Agreement together with the Employment Agreement 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.  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.

 

18.                               MODIFICATIONS AND AMENDMENTS.

 

The terms and provisions of this Agreement may be modified or amended by the Company in a manner which is not adverse to the Participant, including, without limitation, to the extent necessary to qualify the shares issuable upon exercise of the Option for listing on any national securities exchange or quotation in any national automated quotation system of securities dealers.  Any modification or amendment of this Agreement shall not, without the consent of the Participant, adversely affect his rights under the Option, including but not limited to pursuant to Section 409A of the Code.

 

19.                               WAIVERS AND CONSENTS.

 

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.

 

20.                               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 this Agreement or providing 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 this Agreement; 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.

 

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00237-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00237-of-00352.parquet"}]]