Exhibit 10.5
RESTRICTED STOCK UNIT
AGREEMENT
UNDER THE
INSPIRE PHARMACEUTICALS, INC.
2005 EQUITY COMPENSATION PLAN
This Restricted Stock Unit Agreement
(this “Agreement”) is made as of the
day of
,
(the “Effective Date”), between Inspire
Pharmaceuticals, Inc. (the “Company”) and
(the “Grantee”). The restricted stock units
awarded pursuant to this Agreement (the “Units”)
are subject to the terms set forth herein and the terms and
provisions of the Inspire Pharmaceuticals, Inc. 2005 Equity
Compensation Plan (the “Plan”) applicable to
restricted stock units, which terms and provisions are incorporated
herein by reference. Unless the context requires otherwise, the
terms defined in the Plan shall have the same meanings
herein.
1. Grant of Restricted
Units . The Company
hereby grants to the Grantee
Units. Each Unit
is equivalent in value to one share of the Company’s common
stock, and shall entitle the Grantee to receive from the Company,
subject to Section 2 of this Agreement, one share of common
stock.
2. Vesting of Units
. The Units are subject to
forfeiture to the Company until such time as they vest and become
nonforfeitable as set forth below in this
Section 2.
(a) The Units shall vest and become nonforfeitable
as follows:
(i)
Units shall vest and become nonforfeitable on
,
if the Grantee continuously provides substantial services to the
Company as an employee or consultant through such date;
(ii)
additional Units shall vest and become nonforfeitable on
,
if the Grantee continuously provides substantial services to the
Company as an employee or consultant through such date;
(iii)
additional Units shall vest and become nonforfeitable on
,
if the Grantee continuously provides substantial services to the
Company as an employee or consultant through such date;
(iv)
additional Units shall vest and become nonforfeitable on
,
if the Grantee continuously provides substantial services to the
Company as an employee or consultant through such date;
and
(v)
additional Units shall vest and become nonforfeitable on
,
if the Grantee continuously provides substantial services to the
Company as an employee or consultant through such date.
(b) Upon the Grantee’s Separation from Service
(as defined below) with the Company for any reason other than the
Grantee’s death or disability (as described in
Section 2(d), below), any Units which have not vested and
become nonforfeitable as of such date shall immediately and
automatically be forfeited. For purposes of this Agreement, a
Grantee experiences a “Separation from Service” on the
date the Grantee ceases to provide substantial services to the
Company as an employee or consultant.
(c) Notwithstanding anything in this Agreement to
the contrary, upon a Grantee’s Termination Due to Change in
Control, all Units shall become vested and nonforfeitable and stock
certificates evidencing the Company Stock underlying the Units
shall be issued to the Grantee on his or her employment termination
date, subject to the satisfaction of any withholding obligations
(including federal and state income, and FICA taxes), as described
in Section 3, below. Notwithstanding the foregoing, if the
Company, its delegate or any governmental agency determines that
the definition of Change of Control in the Plan does not conform to
Internal Revenue Code (the “Code”)
Section 409A(a)(2)(vi) or related regulations, all Units
subject to this Section 2 shall nevertheless become vested and
nonforfeitable upon a Grantee’s Termination Due to Change in
Control; provided, however, that stock certificates evidencing the
Company Stock underlying the Units shall be issued to the Grantee
on the Delivery Date (as defined in Section 3) and subject to
the satisfaction of any withholding obligations, as described in
Section 3, below. Notwithstanding the foregoing, a
consultant’s outstanding Units shall not become vested and
nonforfeitable upon a Change in Control or upon the termination of
the consultant’s services following a Change in
Control.
(d) Upon the first anniversary following the date
that the Grantee experiences a Separation from Service as a result
of the Grantees death or disability (as defined in
Section 409A(2)(c) of the Code), any Units which have not
vested and become nonforfeitable as of such date shall immediately
and automatically be forfeited (it being understood that in the
event of a Separation from Service as a result of the Grantees
death or disability, the Units will continue to vest until the
first anniversary following the date of such a separation from
services notwithstanding the fact that the Grantee will not provide
substantial services to the Company through such anniversary date).
The stock certificates evidencing the Company Stock underlying the
Units that have become vested and no
