EXHIBIT 10.7
INSPIRE PHARMACEUTICALS,
INC.
1995 STOCK PLAN
DIRECTOR’S NONQUALIFIED
STOCK OPTION
Inspire Pharmaceuticals, Inc. (the
“Company”) has granted to you a Nonqualified Stock
Option (the “Option”) under the Inspire
Pharmaceuticals, Inc. 1995 Stock Plan, as amended (the
“Plan”). The terms of the Option are set forth in the
Director’s Nonqualified Stock Option Grant Agreement provided
to you (the “Agreement”). The following provides a
summary of the key terms of the Option; however, you should read
the entire Agreement, along with the terms of the Plan, to fully
understand the Option.
SUMMARY OF DIRECTOR’S
NONQUALIFIED STOCK OPTION
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Option Number:
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Grantee:
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Date of Grant:
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Vesting Schedule:
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Exercise Price Per Share:
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Total Number of Options Granted:
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Term/Expiration Date:
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INSPIRE PHARMACEUTICALS,
INC.
1995 STOCK PLAN
DIRECTOR’S NONQUALIFIED
STOCK OPTION GRANT AGREEMENT
This DIRECTOR’S
NONQUALIFIED STOCK OPTION GRANT AGREEMENT (the
“Agreement”), dated as of (the “Date of
Grant”), is delivered by Inspire Pharmaceuticals, Inc. (the
“Company”) to (the “Grantee”).
RECITALS
A. The Inspire Pharmaceuticals, Inc.
1995 Stock Plan, as amended (the “Plan”) provides for
the grant of options to purchase shares of common stock of the
Company to non-employee members of the Board of Directors of the
Company (the “Board”). The Company has decided to make
a stock option grant as an inducement for the Grantee to promote
the best interests of the Company and its stockholders.
B. The Board has delegated its
authority to administer the Plan to the Compensation Committee (the
“Committee”).
NOW, THEREFORE
, the parties to this Agreement,
intending to be legally bound hereby, agree as follows:
1. Grant of Option .
Subject to the terms and conditions set forth in this Agreement and
in the Plan, the Company hereby grants to the Grantee a
Nonqualified Stock Option (the “Option”) to purchase
shares of common stock of the Company (“Shares”) at an
exercise price of per Share (the “Exercise Price”). The
Option shall become exercisable according to Paragraph 2 below.
This Option has been granted to the Grantee because the Grantee was
elected as a member of the Board as of the Date of Grant (referred
to below as the “Board Position”).
2. Exercisability of
Option . The Option shall become exercisable in the manner
provided below, if the Grantee is serving in the Board Position on
the applicable date. For this purpose, the term
“Shares” refers to the number of shares underlying that
portion of the Option that vests in the manner described under Vest
Type and Full Vest Date. The term “Vest Type” describes
how the Option covering those shares will vest before the Full Vest
Date. For example, if Vest Type is “monthly”, that
Option will vest with respect to those shares on a pro rata basis
on each monthly anniversary of the Date of Grant. The term
“Full Vest Date” is the date on which that portion of
the Option covering all of the corresponding shares set forth in
the “Shares” column will be fully vested.
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Shares
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Vest Type
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Full Vest
Date
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The number of Shares noted on the
first line will vest in equal monthly installments, beginning one
month after the date of grant and will fully vest on the
corresponding “Full Vest Date.” The
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number of Shares noted in each subsequent line
will vest in equal monthly installments, beginning one month after
the Full Vest Date shown in the previous line and ending on the
Full Vest Date shown in the corresponding line.
The exercisability of the Option is
cumulative, but shall not exceed one hundred percent (100%) of
the Shares subject to the Option. If the foregoing schedule would
produce fractional Shares, the number of Shares for which the
Option becomes exercisable shall be rounded down to the nearest
whole Share. Notwithstanding the foregoing, the Option shall cease
to vest if and when the Grantee ceases to serve in the Board
Position (unless the Committee otherwise determines that
circumstances warrant continuation of vesting). If the Grantee dies
while serving in the Board Position, all of the unexercised
outstanding Shares of the Option shall become immediately
exercisable.
3. Term of Option
.
(a) The Option shall have a term of
seven (7) years from the Date of Grant (the “Exercise
Period”) and shall terminate at the expiration of that
period, unless it is terminated at an earlier date pursuant to the
provisions of this Agreement or the Plan.
(b) If the Grantee ceases to serve
in the Board Position after any portion of the Option becomes
exercisable but before the end of the Exercise Period, the Exercise
Period shall be shortened as follows:
(i) The Exercise Period shall end
immediately upon the date of the Grantee’s breach of any
agreement, covenant or representation by and between the Grantee
and the Company, including, but not limited to, any promise or
warrant made as consideration for this Agreement or the terms of
any severance agreement;
(ii) The Exercise Period shall end
immediately upon the date of the Grantee’s illegal or
improper conduct that injures or impairs the reputation, goodwill,
or business of the Company, involves the misappropriation of funds
of the Company, or the misuse of data, information or documents
acquired in connection with the Grantee’s service as a
director, consultant, employee or any other capacity to the
Company, or violates any other directive or policy promulgated by
the Company; and
(iii) The Exercise Period shall end
immediately upon the effective date of the (x) termination of
the Grantee’s consulting or director relationship with the
Company in violation of an agreement to remain in service with the
Company; (y) involuntary termination of the Grantee’s
consulting or director relationship with the Company for reasons
which may include, without limitation, any illegal or improper
conduct that injures or impairs the reputation, goodwill, or
business of the Company, involves the misappropriation of funds of
the Company, or the misuse of data, information or documents
acquired in connection with service for the Company, or violates
any other directive or policy promulgated by the Company; or
(z) voluntary termination of his or her consulting or director
relationship with the Company in anticipation of involuntary
termination.
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(c) Notwithstanding
the foregoing, in no event may the Option be exercised after the
date that is immediately before the seventh (7
th
) anniversary
of the Date of Grant. Any portion of the Option that is not
exercisable at the time the Grantee ceases to serve as a member of
the Board shall immediately terminate.
4. Exercise Procedures
.
(a) Subject to the provisions of
Paragraphs 2 and 3 above, the Grantee may exercise part or all of
the exercisable Option by giving the Company written notice of
intent to exercise in the manner provided in this Agreement,
specifying the number of Shares as to which the Option is to be
exercised. At such time as the Committee shall determine, the
Grantee shall pay the Exercise Price (i) in cash, (ii) by
payment through a broker in accordance with procedures permitted by
Regulation T of the Federal Reserve Board or (iii) by such
other method as the Company may approve. The Company may impose
from time to time such limitations as it deems appropriate on the
use of Shares of the Company to exercise the Option.
(b) The obligation of the Company to
deliver Shares upon exercise of the Option shall be subject to all
applicable laws, rules, and regulations and such approvals by
governmental agencies as may be deemed appropriate by the Company,
including such actions as Company counsel shall deem necessary or
appropriate to comply with relevant securities laws and
regulations. The Company may require that the Grantee (or other
person exercising the Option) represent that the Grantee is
purchasing Shares for the Grantee’s own account and not with
a view to or for sale in connection with any distribution of the
Shares, or such other representation as the Company deems
appropriate.
(c) All obligations of the Company
under this Agreement shall be subject to the rights of the Company
as set forth in the Plan to withhold amounts required to be
withheld for any taxes, if applicable. Subject to Committee
approval, the Grantee may elect to satisfy any tax withholding
obligation of the Company with respect to the Option by having
Shares withheld up to an amount that does not exceed the minimum
applicable withholding tax rate for federal (including FICA), state
and local tax liabilities.
(d) It shall be a condition of
exercise hereunder that:
(i) The Com
