Exhibit 10.1

MIRATI THERAPEUTICS, INC.

INDUCEMENT PLAN

1.    GENERAL.

(a)    Eligible Stock Award Recipients. The only persons eligible to receive
grants of Stock Awards under this Plan are individuals who satisfy the standards
for inducement grants under Nasdaq Marketplace Rule 5635(c)(4) and the related
guidance under Nasdaq IM 5635-1 – that is, generally, a person not previously an
employee or director of the Company, or following a bona fide period of
non-employment, as an inducement material to the individual’s entering into
employment with the Company. Such eligible individuals are referred to in this
Plan as “Eligible Employees”. These grants will be approved by either the
Compensation Committee or a majority of the Company’s “Independent Directors”
(as such term is defined by Nasdaq for purposes of Nasdaq Marketplace Rule
5635(c)(4)). We refer to Nasdaq Marketplace Rule 5635(c)(4) and the related
guidance under Nasdaq IM 5635-1 as the “Inducement Award Rules”.

(b)    Available Stock Awards. This Plan provides for the grant of the following
Stock Awards: (i) Nonstatutory Stock Options, (ii) Stock Appreciation Rights,
(iii) Restricted Stock Awards, (iv) Restricted Stock Unit Awards, and (v) Other
Stock Awards. As provided in Section 2(a), Stock Awards may be granted only by
either the Compensation Committee or a majority of the Independent Directors as
required by the Inducement Award Rules. Incentive Stock Options may not be
granted under this Plan.

(c)    General Purpose. The Company, by means of the Plan, seeks to secure and
retain the services of one or more Eligible Employees, to provide incentives for
such persons to exert maximum efforts for the success of the Company and any
Affiliate, and to provide a means by which such persons may be given an
opportunity to benefit from increases in value of the Common Stock through the
granting of Stock Awards.

2.    ADMINISTRATION.

(a)    Administration. The Compensation Committee shall administer the Plan.
Stock Awards may only be granted by either: (i) the Compensation Committee as
composed solely of Independent Directors, (ii) another Committee composed solely
of Independent Directors and constituting a majority of the Company’s
Independent Directors, or (iii) at the Board level by a majority of the
Company’s Independent Directors, with non-Independent Directors abstaining.
Subject to the foregoing Stock Award approval requirements and the other
constraints of the Inducement Award Rules, the Compensation Committee may
delegate some of its powers of administration of the Plan to another Committee,
as provided in Section 2(c) (and references in this Plan to the Compensation
Committee will thereafter be to the applicable Committee).

(b)    Powers of Compensation Committee. The Compensation Committee will have
the power, subject to, and within the limitations of, the express provisions of
the Plan and the Inducement Award Rules, including:

(i)    To determine: (A) which Eligible Employees will be granted Stock Awards;
(B) when and how each Stock Award will be granted; (C) what type of Stock Award
will be granted; (D) the provisions of each Stock Award (which need not be
identical), including when a person will be permitted to exercise or otherwise
receive cash or Common Stock under the Stock Award; (E) the number of shares of
Common Stock subject to, or the cash value of, a Stock Award; and (F) the Fair
Market Value applicable to a Stock Award; provided, however, that Stock Awards
may only be granted by either (1) the Compensation Committee as composed solely
of Independent Directors, (2) another Committee composed solely of Independent
Directors constituting a majority of the Company’s Independent Directors, or
(3) at the Board level by a majority of the Company’s Independent Directors,
with non-Independent Directors abstaining.

 

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(ii)    To construe and interpret the Plan and Stock Awards granted under it,
and to establish, amend and revoke rules and regulations for administration of
the Plan and Stock Awards. The Compensation Committee, in the exercise of these
powers, may correct any defect, omission or inconsistency in the Plan or in any
Stock Award Agreement, in a manner and to the extent it will deem necessary or
expedient to make the Plan or Stock Award fully effective.

(iii)    To settle all controversies regarding the Plan and Stock Awards granted
under it.

(iv)    To accelerate, in whole or in part, the time at which a Stock Award may
be exercised or vest (or the time at which cash or shares of Common Stock may be
issued in settlement thereof).

(v)    To suspend or terminate the Plan at any time. Except as otherwise
provided in the Plan or a Stock Award Agreement, suspension or termination of
the Plan will not materially impair a Participant’s rights under the
Participant’s then-outstanding Stock Award without such Participant’s written
consent except as provided in subsection (viii) below.

(vi)    To amend the Plan in any respect the Compensation Committee deems
necessary or advisable consistent with the Inducement Award Rules, including,
without limitation, by adopting amendments relating to certain nonqualified
deferred compensation under Section 409A of the Code and/or to make the Plan or
Stock Awards granted under the Plan exempt from or compliant with the
requirements for nonqualified deferred compensation under Section 409A of the
Code, subject to the limitations, if any, of applicable law, and subject to any
stockholder approval required under the Inducement Award Rules in connection
with such amendment of the Plan. Except as otherwise provided in the Plan or a
Stock Award Agreement, no amendment of the Plan will materially impair a
Participant’s rights under an outstanding Stock Award without the Participant’s
written consent.

(vii)    To approve forms of Stock Award Agreements for use under the Plan;

(viii)     To amend the terms of any one or more Stock Awards, including, but
not limited to, amendments to provide terms more favorable to the Participant
than previously provided in the Stock Award Agreement, subject to any specified
limits in the Plan that are not subject to Compensation Committee discretion,
and subject to any stockholder approval required under the Inducement Award
Rules in connection with such amendment of a Stock Award; provided however, that
a Participant’s rights under any Stock Award will not be impaired by any such
amendment unless (A) the Company requests the consent of the affected
Participant, and (B) such Participant consents in writing. Notwithstanding the
foregoing, (1) a Participant’s rights will not be deemed to have been impaired
by any such amendment if the Compensation Committee, in its sole discretion,
determines that the amendment, taken as a whole, does not materially impair the
Participant’s rights, and (2) subject to the limitations of applicable law, if
any, the Compensation Committee may amend the terms of any one or more Stock
Awards without the affected Participant’s consent (A) to clarify the manner of
exemption from, or to bring the Stock Award into compliance with, Section 409A
of the Code or (B) to comply with other applicable laws or listing requirements,
including the Inducement Award Rules.

(ix)    Generally, to exercise such powers and to perform such acts as the
Compensation Committee deems necessary or expedient to promote the best
interests of the Company and that are not in conflict with the provisions of the
Plan or Stock Awards.

(x)    To adopt such procedures and sub-plans as are necessary or appropriate to
permit participation in the Plan by Eligible Employees who are foreign nationals
or employed outside the United States (provided that Compensation Committee
approval will not be necessary for immaterial modifications to the Plan or any
Stock Award Agreement that are required for compliance with the laws of the
relevant foreign jurisdiction).

 

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(c)    Delegation to Committee.

(i)    General. Subject to the Stock Award approval requirements set forth in
Section 2(a), the Compensation Committee may delegate some or all of the
administration of the Plan to a Committee but only to the extent that such
delegation is consistent with the Inducement Award Rules. If administration is
delegated to a Committee, the Committee will have, in connection with the
administration of the Plan, the powers theretofore possessed by the Compensation
Committee that have been delegated to the Committee, including the power to
delegate to a subcommittee any of the administrative powers the Committee is
authorized to exercise, subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the
Compensation Committee. The Compensation Committee may retain the authority to
concurrently administer the Plan with the Committee and may, at any time, revest
in the Compensation Committee some or all of the powers previously delegated.

(d)    Effect of Compensation Committee’s Decision. All determinations,
interpretations and constructions made by the Compensation Committee in good
faith will not be subject to review by any person and will be final, binding and
conclusive on all persons.

(e)    Cancellation and Re-Grant of Stock Awards. Neither the Compensation
Committee nor any Committee will have the authority to: (i) reduce the exercise
price or strike price of any outstanding Options or SARs under the Plan, or
(ii) cancel any outstanding Options or SARs that have an exercise price or
strike price greater than the current Fair Market Value in exchange for cash or
other Stock Awards under the Plan, unless the stockholders of the Company have
approved such an action within twelve months prior to such an event.

3.    SHARES SUBJECT TO THE PLAN.

(a)    Share Reserve. Subject to Section 9(a) relating to Capitalization
Adjustments, the aggregate number of shares of Common Stock that may be issued
pursuant to Stock Awards from and after the Effective Date will not exceed
417,343 shares (the “Share Reserve”). For clarity, the Share Reserve in this
Section 3(a) is a limitation on the number of shares of Common Stock that may be
issued pursuant to the Plan. Accordingly, this Section 3(a) does not limit the
granting of Stock Awards except as provided in Section 7(a). Shares may be
issued in connection with a merger or acquisition as permitted by NASDAQ Listing
Rule 5635(c) or, if applicable, NYSE Listed Company Manual Section 303A.08, AMEX
Company Guide Section 711 or other applicable rule, and such issuance will not
reduce the number of shares available for issuance under the Plan.

(b)    Reversion of Shares to the Share Reserve. If a Stock Award or any portion
thereof (i) expires or otherwise terminates without all of the shares covered by
such Stock Award having been issued or (ii) is settled in cash (i.e., the
Participant receives cash rather than stock), such expiration, termination or
settlement will not reduce (or otherwise offset) the number of shares of Common
Stock that may be available for issuance under the Plan. If any shares of Common
Stock issued pursuant to a Stock Award are forfeited back to or repurchased by
the Company because of the failure to meet a contingency or condition required
to vest such shares in the Participant, then the shares that are forfeited or
repurchased will revert to and again become available for issuance under the
Plan. Any shares reacquired by the Company in satisfaction of tax withholding
obligations on a Stock Award or as consideration for the exercise or purchase
price of a Stock Award will again become available for issuance under the Plan.

(c)    Source of Shares. The stock issuable under the Plan will be shares of
authorized but unissued or reacquired Common Stock, including shares repurchased
by the Company on the open market or otherwise.

4.    ELIGIBILITY.

Stock Awards may be granted to Eligible Employees; provided, however, that Stock
Awards may not be granted to Eligible Employees who are providing Continuous
Service only to any “parent” of the Company, as such term is defined in Rule 405
of the Securities Act, unless (i) the stock underlying such Stock Awards is
treated as “service recipient stock” under Section 409A of the Code (for
example, because the Stock Awards are granted pursuant to a corporate
transaction such as a spin off transaction), (ii) the Company, in consultation
with its legal

 

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counsel, has determined that such Stock Awards are otherwise exempt from
Section 409A of the Code, or (iii) the Company, in consultation with its legal
counsel, has determined that such Stock Awards comply with the distribution
requirements of Section 409A of the Code.

5.    PROVISIONS RELATING TO OPTIONS AND STOCK APPRECIATION RIGHTS.

Each Option or SAR will be in such form and will contain such terms and
conditions as the Compensation Committee deems appropriate. The provisions of
separate Options or SARs need not be identical; provided, however, that each
Stock Award Agreement will conform to (through incorporation of provisions
hereof by reference in the applicable Stock Award Agreement or otherwise) the
substance of each of the following provisions:

(a)    Term. No Option or SAR will be exercisable after the expiration of ten
years from the date of its grant or such shorter period specified in the Stock
Award Agreement.

(b)    Exercise Price. The exercise or strike price of each Option or SAR will
be not less than 100% of the Fair Market Value of the Common Stock subject to
the Option or SAR on the date the Stock Award is granted. Each SAR will be
denominated in shares of Common Stock equivalents.

(c)    Purchase Price for Options. The purchase price of Common Stock acquired
pursuant to the exercise of an Option may be paid, to the extent permitted by
applicable law and as determined by the Compensation Committee in its sole
discretion, by any combination of the methods of payment set forth below. The
Compensation Committee will have the authority to grant Options that do not
permit all of the following methods of payment (or that otherwise restrict the
ability to use certain methods) and to grant Options that require the consent of
the Company to use a particular method of payment. The permitted methods of
payment are as follows:

(i)    by cash, check, bank draft or money order payable to the Company;

(ii)    pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Compensation Committee that, prior to the issuance of the stock
subject to the Option, results in either the receipt of cash (or check) by the
Company or the receipt of irrevocable instructions to pay the aggregate exercise
price to the Company from the sales proceeds;

(iii)    by delivery to the Company (either by actual delivery or attestation)
of shares of Common Stock;

(iv)    by a “net exercise” arrangement pursuant to which the Company will
reduce the number of shares of Common Stock issuable upon exercise by the
largest whole number of shares with a Fair Market Value that does not exceed the
aggregate exercise price; provided, however, that the Company will accept a cash
or other payment from the Participant to the extent of any remaining balance of
the aggregate exercise price not satisfied by such reduction in the number of
whole shares to be issued. Shares of Common Stock will no longer be subject to
an Option and will not be exercisable thereafter to the extent that (A) shares
issuable upon exercise are used to pay the exercise price pursuant to the “net
exercise,” (B) shares are delivered to the Participant as a result of such
exercise, and (C) shares are withheld to satisfy tax withholding obligations; or

(v)    in any other form of legal consideration that may be acceptable to the
Compensation Committee, permissible under applicable law, the rules of any
applicable stock exchange and specified in the applicable Stock Award Agreement.

(d)    Exercise and Payment of a SAR. To exercise any outstanding SAR, the
Participant must provide written notice of exercise to the Company in compliance
with the provisions of the Stock Appreciation Right Agreement evidencing such
SAR. The appreciation distribution payable on the exercise of a SAR will be not
greater than an amount equal to the excess of (A) the aggregate Fair Market
Value (on the date of the exercise of the SAR) of a number of shares of Common
Stock equal to the number of Common Stock equivalents in which the Participant
is vested under such SAR, and with respect to which the Participant is
exercising the SAR on such date, over (B) the aggregate strike price of the
number of Common Stock equivalents with respect to which the Participant is

 

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exercising the SAR on such date. The appreciation distribution may be paid in
Common Stock, in cash, in any combination of the two or in any other form of
consideration, as determined by the Compensation Committee and contained in the
Stock Award Agreement evidencing such SAR.

(e)    Transferability of Options and SARs. The Compensation Committee may, in
its sole discretion, impose such limitations on the transferability of Options
and SARs as the Compensation Committee will determine. In the absence of such a
determination by the Compensation Committee to the contrary, the following
restrictions on the transferability of Options and SARs will apply:

(i)    Restrictions on Transfer. An Option or SAR will not be transferable
except by will or by the laws of descent and distribution (or pursuant to
subsections (ii) and (iii) below), and will be exercisable during the lifetime
of the Participant only by the Participant. The Compensation Committee may
permit transfer of the Option or SAR in a manner that is not prohibited by
applicable tax and securities laws. Except as explicitly provided herein,
neither an Option nor a SAR may be transferred for consideration.

(ii)    Domestic Relations Orders. Subject to the approval of the Compensation
Committee or a duly authorized Officer, an Option or SAR may be transferred
pursuant to the terms of a domestic relations order, official marital settlement
agreement or other divorce or separation instrument.

(iii)    Beneficiary Designation. Subject to the approval of the Compensation
Committee or a duly authorized Officer, a Participant may, by delivering written
notice to the Company, in a form approved by the Company (or the designated
broker), designate a third party who, on the death of the Participant, will
thereafter be entitled to exercise the Option or SAR and receive the Common
Stock or other consideration resulting from such exercise. In the absence of
such a designation, upon the death of the Participant, the executor or
administrator of the Participant’s estate will be entitled to exercise the
Option or SAR and receive the Common Stock or other consideration resulting from
such exercise. However, the Company may prohibit designation of a beneficiary at
any time, including due to any conclusion by the Company that such designation
would be inconsistent with the provisions of applicable laws.

(f)    Vesting Generally. The total number of shares of Common Stock subject to
an Option or SAR may vest and become exercisable in periodic installments that
may or may not be equal. The Option or SAR may be subject to such other terms
and conditions on the time or times when it may or may not be exercised (which
may be based on the satisfaction of performance goals or other criteria) as the
Compensation Committee may deem appropriate. The vesting provisions of
individual Options or SARs may vary. The provisions of this Section 5(f) are
subject to any Option or SAR provisions governing the minimum number of shares
of Common Stock as to which an Option or SAR may be exercised.

(g)    Termination of Continuous Service. Except as otherwise provided in the
applicable Stock Award Agreement or other agreement between the Participant and
the Company, if a Participant’s Continuous Service terminates (other than for
Cause and other than upon the Participant’s death or Disability), the
Participant may exercise his or her Option or SAR (to the extent that the
Participant was entitled to exercise such Stock Award as of the date of
termination of Continuous Service) within the period of time ending on the
earlier of (i) the date three months following the termination of the
Participant’s Continuous Service (or such longer or shorter period specified in
the applicable Stock Award Agreement), and (ii) the expiration of the term of
the Option or SAR as set forth in the Stock Award Agreement. If, after
termination of Continuous Service, the Participant does not exercise his or her
Option or SAR (as applicable) within the applicable time frame, the Option or
SAR will terminate.

(h)    Extension of Termination Date. If the exercise of an Option or SAR
following the termination of the Participant’s Continuous Service (other than
for Cause and other than upon the Participant’s death or Disability) would be
prohibited at any time solely because the issuance of shares of Common Stock
would violate the registration requirements under the Securities Act, then the
Option or SAR will terminate on the earlier of (i) the expiration of a total
period of time (that need not be consecutive) equal to the applicable post
termination exercise period after the termination of the Participant’s
Continuous Service during which the exercise of the Option or SAR would not be
in violation of such registration requirements, and (ii) the expiration of the
term of the Option or SAR as set forth in the applicable Stock Award Agreement.
In addition, unless otherwise provided in a Participant’s Stock Award Agreement,
if the sale of any Common Stock received on exercise of an Option or SAR
following the

 

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termination of the Participant’s Continuous Service (other than for Cause) would
violate the Company’s insider trading policy, then the Option or SAR will
terminate on the earlier of (i) the expiration of a period of months (that need
not be consecutive) equal to the applicable post-termination exercise period
after the termination of the Participant’s Continuous Service during which the
sale of the Common Stock received upon exercise of the Option or SAR would not
be in violation of the Company’s insider trading policy, or (ii) the expiration
of the term of the Option or SAR as set forth in the applicable Stock Award
Agreement.

(i)    Disability of Participant. Except as otherwise provided in the applicable
Stock Award Agreement or other agreement between the Participant and the
Company, if a Participant’s Continuous Service terminates as a result of the
Participant’s Disability, the Participant may exercise his or her Option or SAR
(to the extent that the Participant was entitled to exercise such Option or SAR
as of the date of termination of Continuous Service), but only within such
period of time ending on the earlier of (i) the date 12 months following such
termination of Continuous Service (or such longer or shorter period specified in
the Stock Award Agreement), and (ii) the expiration of the term of the Option or
SAR as set forth in the Stock Award Agreement. If, after termination of
Continuous Service, the Participant does not exercise his or her Option or SAR
within the applicable time frame, the Option or SAR (as applicable) will
terminate.

(j)    Death of Participant. Except as otherwise provided in the applicable
Stock Award Agreement or other agreement between the Participant and the
Company, if (i) a Participant’s Continuous Service terminates as a result of the
Participant’s death, or (ii) the Participant dies within the period (if any)
specified in the Stock Award Agreement for exercisability after the termination
of the Participant’s Continuous Service for a reason other than death, then the
Option or SAR may be exercised (to the extent the Participant was entitled to
exercise such Option or SAR as of the date of death) by the Participant’s
estate, by a person who acquired the right to exercise the Option or SAR by
bequest or inheritance or by a person designated to exercise the Option or SAR
upon the Participant’s death, but only within the period ending on the earlier
of (i) the date 18 months following the date of death (or such longer or shorter
period specified in the Stock Award Agreement), and (ii) the expiration of the
term of such Option or SAR as set forth in the Stock Award Agreement. If, after
the Participant’s death, the Option or SAR is not exercised within the
applicable time frame, the Option or SAR (as applicable) will terminate.

(k)    Termination for Cause. Except as explicitly provided otherwise in a
Participant’s Stock Award Agreement or other individual written agreement
between the Company or any Affiliate and the Participant, if a Participant’s
Continuous Service is terminated for Cause, the Option or SAR will terminate
immediately upon such Participant’s termination of Continuous Service, and the
Participant will be prohibited from exercising his or her Option or SAR from and
after the date of such termination of Continuous Service.

(l)    Non-Exempt Employees. If an Option or SAR is granted to an Eligible
Employee who is a non-exempt employee for purposes of the Fair Labor Standards
Act of 1938, as amended, the Option or SAR will not be first exercisable for any
shares of Common Stock until at least six (6) months following the date of grant
of the Option or SAR (although the Stock Award may vest prior to such date).
Consistent with the provisions of the Worker Economic Opportunity Act, (i) if
such non-exempt employee dies or suffers a Disability, (ii) upon a Corporate
Transaction in which such Option or SAR is not assumed, continued, or
substituted, (iii) upon a Change in Control, or (iv) upon the Participant’s
retirement (as such term may be defined in the Participant’s Stock Award
Agreement, in another agreement between the Participant and the Company, or, if
no such definition, in accordance with the Company’s then current employment
policies and guidelines), the vested portion of any Options and SARs may be
exercised earlier than six months following the date of grant. The foregoing
provision is intended to operate so that any income derived by a non-exempt
employee in connection with the exercise or vesting of an Option or SAR will be
exempt from his or her regular rate of pay. To the extent permitted and/or
required for compliance with the Worker Economic Opportunity Act to ensure that
any income derived by a non-exempt employee in connection with the exercise,
vesting or issuance of any shares under any other Stock Award will be exempt
from the employee’s regular rate of pay, the provisions of this Section 5(l)
will apply to all Stock Awards and are hereby incorporated by reference into
such Stock Award Agreements.

 

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6.    PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS AND SARS.

(a)    Restricted Stock Awards. Each Restricted Stock Award Agreement will be in
such form and will contain such terms and conditions as the Compensation
Committee will deem appropriate. To the extent consistent with the Company’s
bylaws, at the Compensation Committee’s election, shares of Common Stock may be
(x) held in book entry form subject to the Company’s instructions until any
restrictions relating to the Restricted Stock Award lapse; or (y) evidenced by a
certificate, which certificate will be held in such form and manner as
determined by the Compensation Committee. The terms and conditions of Restricted
Stock Award Agreements may change from time to time, and the terms and
conditions of separate Restricted Stock Award Agreements need not be identical.
Each Restricted Stock Award Agreement will conform to (through incorporation of
the provisions hereof by reference in the agreement or otherwise) the substance
of each of the following provisions:

(i)    Consideration. A Restricted Stock Award may be awarded in consideration
for (A) cash, check, bank draft or money order payable to the Company, (B) past
services to the Company or an Affiliate, or (C) any other form of legal
consideration (including future services) that may be acceptable to the
Compensation Committee, in its sole discretion, and permissible under applicable
law.

(ii)    Vesting. Shares of Common Stock awarded under the Restricted Stock Award
Agreement may be subject to forfeiture to the Company in accordance with a
vesting schedule to be determined by the Compensation Committee.

(iii)    Termination of Participant’s Continuous Service. If a Participant’s
Continuous Service terminates, the Company may receive through a forfeiture
condition or a repurchase right any or all of the shares of Common Stock held by
the Participant that have not vested as of the date of termination of Continuous
Service under the terms of the Restricted Stock Award Agreement.

(iv)    Transferability. Rights to acquire shares of Common Stock under the
Restricted Stock Award Agreement will be transferable by the Participant only
upon such terms and conditions as are set forth in the Restricted Stock Award
Agreement, as the Compensation Committee will determine in its sole discretion,
so long as Common Stock awarded under the Restricted Stock Award Agreement
remains subject to the terms of the Restricted Stock Award Agreement.

(v)    Dividends. A Restricted Stock Award Agreement may provide that any
dividends paid on Restricted Stock will be subject to the same vesting and
forfeiture restrictions as apply to the shares subject to the Restricted Stock
Award to which they relate.

(b)    Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement
will be in such form and will contain such terms and conditions as the
Compensation Committee will deem appropriate. The terms and conditions of
Restricted Stock Unit Award Agreements may change from time to time, and the
terms and conditions of separate Restricted Stock Unit Award Agreements need not
be identical. Each Restricted Stock Unit Award Agreement will conform to
(through incorporation of the provisions hereof by reference in the Agreement or
otherwise) the substance of each of the following provisions:

(i)    Consideration. At the time of grant of a Restricted Stock Unit Award, the
Compensation Committee will determine the consideration, if any, to be paid by
the Participant upon delivery of each share of Common Stock subject to the
Restricted Stock Unit Award. The consideration to be paid (if any) by the
Participant for each share of Common Stock subject to a Restricted Stock Unit
Award may be paid in any form of legal consideration that may be acceptable to
the Compensation Committee, in its sole discretion, and permissible under
applicable law and the rules of any applicable stock exchange.

(ii)    Vesting. At the time of the grant of a Restricted Stock Unit Award, the
Compensation Committee may impose such restrictions on or conditions to the
vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems
appropriate.

(iii)    Payment. A Restricted Stock Unit Award may be settled by the delivery
of shares of Common Stock, their cash equivalent, any combination thereof or in
any other form of consideration, as determined by the Compensation Committee and
contained in the Restricted Stock Unit Award Agreement.

 

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(iv)    Additional Restrictions. At the time of the grant of a Restricted Stock
Unit Award, the Compensation Committee, as it deems appropriate, may impose such
restrictions or conditions that delay the delivery of the shares of Common Stock
(or their cash equivalent) subject to a Restricted Stock Unit Award to a time
after the vesting of such Restricted Stock Unit Award.

(v)    Dividend Equivalents. Dividend equivalents may be credited in respect of
shares of Common Stock covered by a Restricted Stock Unit Award, as determined
by the Compensation Committee and contained in the Restricted Stock Unit Award
Agreement. At the sole discretion of the Compensation Committee, such dividend
equivalents may be converted into additional shares of Common Stock covered by
the Restricted Stock Unit Award in such manner as determined by the Compensation
Committee. Any additional shares covered by the Restricted Stock Unit Award
credited by reason of such dividend equivalents will be subject to all of the
same terms and conditions of the underlying Restricted Stock Unit Award
Agreement to which they relate.

(vi)    Termination of Participant’s Continuous Service. Except as otherwise
provided in the applicable Restricted Stock Unit Award Agreement, such portion
of the Restricted Stock Unit Award that has not vested will be forfeited upon
the Participant’s termination of Continuous Service.

(c)    Other Stock Awards. Other forms of Stock Awards valued in whole or in
part by reference to, or otherwise based on, Common Stock, including the
appreciation in value thereof (e.g., options or stock rights with an exercise
price or strike price less than 100% of the Fair Market Value of the Common
Stock at the time of grant) may be granted either alone or in addition to Stock
Awards provided for under Section 5 and the preceding provisions of this
Section 5(e). Subject to the provisions of the Plan, the Compensation Committee
will have sole and complete authority to determine the persons to whom and the
time or times at which such Other Stock Awards will be granted, the number of
shares of Common Stock (or the cash equivalent thereof) to be granted pursuant
to such Other Stock Awards and all other terms and conditions of such Other
Stock Awards.

7.    COVENANTS OF THE COMPANY.

(a)    Availability of Shares. The Company will keep available at all times the
number of shares of Common Stock reasonably required to satisfy then-outstanding
Stock Awards.

(b)    Securities Law Compliance. The Company will seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Stock Awards and to issue and sell shares of Common
Stock upon exercise of the Stock Awards; provided, however, that this
undertaking will not require the Company to register under the Securities Act
the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts and at a reasonable cost, the
Company is unable to obtain from any such regulatory commission or agency the
authority that counsel for the Company deems necessary for the lawful issuance
and sale of Common Stock under the Plan, the Company will be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such Stock
Awards unless and until such authority is obtained. A Participant will not be
eligible for the grant of a Stock Award or the subsequent issuance of cash or
Common Stock pursuant to the Stock Award if such grant or issuance would be in
violation of any applicable securities law.

(c)    No Obligation to Notify or Minimize Taxes. The Company will have no duty
or obligation to any Participant to advise such holder as to the time or manner
of exercising such Stock Award. Furthermore, the Company will have no duty or
obligation to warn or otherwise advise such holder of a pending termination or
expiration of a Stock Award or a possible period in which the Stock Award may
not be exercised. The Company has no duty or obligation to minimize the tax
consequences of a Stock Award to the holder of such Stock Award.

8.    MISCELLANEOUS.

(a)    Use of Proceeds from Sales of Common Stock. Proceeds from the sale of
shares of Common Stock pursuant to Stock Awards will constitute general funds of
the Company.

 

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(b)    Corporate Action Constituting Grant of Stock Awards. Corporate action
constituting a grant by the Company of a Stock Award to any Participant will be
deemed completed as of the date of such corporate action, unless otherwise
determined by the Compensation Committee, regardless of when the instrument,
certificate, or letter evidencing the Stock Award is communicated to, or
actually received or accepted by, the Participant. In the event that the
corporate records (e.g., Compensation Committee consents, resolutions or
minutes) documenting the corporate action constituting the grant contain terms
(e.g., exercise price, vesting schedule or number of shares) that are
inconsistent with those in the Stock Award Agreement or related grant documents
as a result of a clerical error in the papering of the Stock Award Agreement or
related grant documents, the corporate records will control and the Participant
will have no legally binding right to the incorrect term in the Stock Award
Agreement or related grant documents.

(c)    Stockholder Rights. No Participant will be deemed to be the holder of, or
to have any of the rights of a holder with respect to, any shares of Common
Stock subject to a Stock Award unless and until (i) such Participant has
satisfied all requirements for exercise of, or the issuance of shares of Common
Stock under, the Stock Award pursuant to its terms, and (ii) the issuance of the
Common Stock subject to such Stock Award has been entered into the books and
records of the Company.

(d)    No Employment or Other Service Rights. Nothing in the Plan, any Stock
Award Agreement or any other instrument executed thereunder or in connection
with any Stock Award granted pursuant thereto will confer upon any Participant
any right to continue to serve the Company or an Affiliate in the capacity in
effect at the time the Stock Award was granted or will affect the right of the
Company or an Affiliate to terminate (i) the employment of an Employee with or
without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultant’s agreement with the Company or an
Affiliate, or (iii) the service of a Director pursuant to the bylaws of the
Company or an Affiliate, and any applicable provisions of the corporate law of
the state in which the Company or the Affiliate is incorporated, as the case may
be.

(e)    Change in Time Commitment. In the event a Participant’s regular level of
time commitment in the performance of his or her services for the Company and
any Affiliates is reduced (for example, and without limitation, if the
Participant is an Employee of the Company and the Employee has a change in
status from a full-time Employee to a part-time Employee or takes an extended
leave of absence) after the date of grant of any Stock Award to the Participant,
the Compensation Committee has the right in its sole discretion to (x) make a
corresponding reduction in the number of shares or cash amount subject to any
portion of such Stock Award that is scheduled to vest or become payable after
the date of such change in time commitment, and (y) in lieu of or in combination
with such a reduction, extend the vesting or payment schedule applicable to such
Stock Award. In the event of any such reduction, the Participant will have no
right with respect to any portion of the Stock Award that is so reduced or
extended.

(f)    Investment Assurances. The Company may require a Participant, as a
condition of exercising or acquiring Common Stock under any Stock Award, (i) to
give written assurances satisfactory to the Company as to the Participant’s
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that such
Participant is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant’s own
account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, will be inoperative if (A) the issuance of the shares upon
the exercise or acquisition of Common Stock under the Stock Award has been
registered under a then currently effective registration statement under the
Securities Act, or (B) as to any particular requirement, a determination is made
by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws. The Company may, upon
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply
with applicable securities laws, including, but not limited to, legends
restricting the transfer of the Common Stock.

 

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(g)    Withholding Obligations. Unless prohibited by the terms of a Stock Award
Agreement, the Company may, in its sole discretion, satisfy any federal, state
or local tax withholding obligation relating to a Stock Award by any of the
following means or by a combination of such means: (i) causing the Participant
to tender a cash payment; (ii) withholding shares of Common Stock from the
shares of Common Stock issued or otherwise issuable to the Participant in
connection with the Stock Award; provided, however, that no shares of Common
Stock are withheld with a value exceeding the minimum amount of tax required to
be withheld by law (or such lesser amount as may be necessary to avoid
classification of the Stock Award as a liability for financial accounting
purposes); (iii) withholding cash from a Stock Award settled in cash;
(iv) withholding payment from any amounts otherwise payable to the Participant;
or (v) by such other method as may be set forth in the Stock Award Agreement.

(h)    Electronic Delivery and Participation. Any reference herein or in a Stock
Award Agreement to a “written” agreement or document will include any agreement
or document delivered electronically, filed publicly at www.sec.gov (or any
successor website thereto), and for so long as the Company remains a “reporting
issuer” under Canadian Securities Laws at www.SEDAR.com, or posted on the
Company’s intranet (or other shared electronic medium controlled by the Company
to which the Participant has access). By accepting any Stock Award the
Participant consents to receive documents by electronic delivery and, if
requested by the Company, to participate in the Plan through an on-line
electronic system established and maintained by the Plan administrator or
another third party selected by the Plan administrator. The form of delivery of
any Common Stock (e.g., a stock certificate or electronic entry evidencing such
shares) shall be determined by the Company.

(i)    Deferrals. To the extent permitted by applicable law and the rules of any
applicable stock exchange, the Compensation Committee, in its sole discretion,
may determine that the delivery of Common Stock or the payment of cash, upon the
exercise, vesting or settlement of all or a portion of any Stock Award may be
deferred and may establish programs and procedures for deferral elections to be
made by Participants. Deferrals by Participants will be made in accordance with
Section 409A of the Code. Consistent with Section 409A of the Code, the
Compensation Committee may provide for distributions while a Participant is
still an employee or otherwise providing services to the Company. The
Compensation Committee is authorized to make deferrals of Stock Awards and
determine when, and in what annual percentages, Participants may receive
payments, including lump sum payments, following the Participant’s termination
of Continuous Service, and implement such other terms and conditions consistent
with the provisions of the Plan and in accordance with applicable law.

(j)    Compliance with Section 409A of the Code. Unless otherwise expressly
provided for in a Stock Award Agreement, the Plan and Stock Award Agreements
will be interpreted to the greatest extent possible in a manner that makes the
Plan and the Stock Awards granted hereunder exempt from Section 409A of the
Code, and, to the extent not so exempt, in compliance with Section 409A of the
Code. If the Compensation Committee determines that any Stock Award granted
hereunder is not exempt from and is therefore subject to Section 409A of the
Code, the Stock Award Agreement evidencing such Stock Award will incorporate the
terms and conditions necessary to avoid the consequences specified in
Section 409A(a)(1) of the Code, and to the extent a Stock Award Agreement is
silent on terms necessary for compliance, such terms are hereby incorporated by
reference into the Stock Award Agreement. Notwithstanding anything to the
contrary in this Plan (and unless the Stock Award Agreement specifically
provides otherwise), if the shares of Common Stock are publicly traded, and if a
Participant holding a Stock Award that constitutes “deferred compensation” under
Section 409A of the Code is a “specified employee” for purposes of Section 409A
of the Code, no distribution or payment of any amount that is due because of a
“separation from service” (as defined in Section 409A of the Code without regard
to alternative definitions thereunder) will be issued or paid before the date
that is six months following the date of such Participant’s “separation from
service” (as defined in Section 409A of the Code without regard to alternative
definitions thereunder) or, if earlier, the date of the Participant’s death,
unless such distribution or payment can be made in a manner that complies with
Section 409A of the Code, and any amounts so deferred will be paid in a lump sum
on the day after such six month period elapses, with the balance paid thereafter
on the original schedule.

(k)    Compliance with Canadian Securities Law requirements. The Company’s
obligation to issue Stock Awards or shares of Common Stock under the Plan is
subject to all of the applicable laws, regulations or rules of any government
agency or other competent authority in respect to the issuance or distribution
of securities and to the rules of any stock exchange on which the Common Stock
of the Company is listed, if applicable. For so long as the Company remains a
“reporting issuer” under Canadian Securities Laws, this Plan shall remain
subject to applicable Canadian Securities Laws.

 

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(l)    Clawback/Recovery. All Stock Awards granted under the Plan will be
subject to recoupment in accordance with any clawback policy that the Company is
required to adopt pursuant to the listing standards of any national securities
exchange or association on which the Company’s securities are listed or as is
otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection
Act or other applicable law. In addition, the Compensation Committee may impose
such other clawback, recovery or recoupment provisions in a Stock Award
Agreement as the Compensation Committee determines necessary or appropriate,
including but not limited to a reacquisition right in respect of previously
acquired shares of Common Stock or other cash or property upon the occurrence of
an event constituting Cause. No recovery of compensation under such a clawback
policy will be an event giving rise to a right to resign for “good reason” or
“constructive termination” (or similar term) under any agreement with the
Company.

9.    ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.

(a)    Capitalization Adjustments. In the event of a Capitalization Adjustment,
the Compensation Committee will appropriately and proportionately adjust:
(i) the class(es) and maximum number of securities subject to the Plan pursuant
to Section 3(a) and (ii) the class(es) and number of securities and price per
share of stock subject to outstanding Stock Awards. The Compensation Committee
will make such adjustments, and its determination will be final, binding and
conclusive.

(b)    Dissolution or Liquidation. Except as otherwise provided in the Stock
Award Agreement, in the event of a dissolution or liquidation of the Company,
all outstanding Stock Awards (other than Stock Awards consisting of vested and
outstanding shares of Common Stock not subject to a forfeiture condition or the
Company’s right of repurchase) will terminate immediately prior to the
completion of such dissolution or liquidation, and the shares of Common Stock
subject to the Company’s repurchase rights or subject to a forfeiture condition
may be repurchased or reacquired by the Company notwithstanding the fact that
the holder of such Stock Award is providing Continuous Service; provided,
however, that the Compensation Committee may, in its sole discretion, cause some
or all Stock Awards to become fully vested, exercisable and/or no longer subject
to repurchase or forfeiture (to the extent such Stock Awards have not previously
expired or terminated) before the dissolution or liquidation is completed but
contingent on its completion.

(c)    Corporate Transaction. The following provisions will apply to Stock
Awards in the event of a Corporate Transaction unless otherwise provided in the
instrument evidencing the Stock Award or any other written agreement between the
Company or any Affiliate and the Participant or unless otherwise expressly
provided by the Compensation Committee at the time of grant of a Stock Award. In
the event of a Corporate Transaction, then, notwithstanding any other provision
of the Plan, the Compensation Committee will take one or more of the following
actions with respect to Stock Awards, contingent upon the closing or completion
of the Corporate Transaction:

(i)    arrange for the surviving corporation or acquiring corporation (or the
surviving or acquiring corporation’s parent company) to assume or continue the
Stock Award or to substitute a similar stock award for the Stock Award
(including, but not limited to, an award to acquire the same consideration paid
to the stockholders of the Company pursuant to the Corporate Transaction);

(ii)    arrange for the assignment of any reacquisition or repurchase rights
held by the Company in respect of Common Stock issued pursuant to the Stock
Award to the surviving corporation or acquiring corporation (or the surviving or
acquiring corporation’s parent company);

(iii)    accelerate the vesting, in whole or in part, of the Stock Award (and,
if applicable, the time at which the Stock Award may be exercised) to a date
prior to the effective time of such Corporate Transaction as the Compensation
Committee determines (or, if the Compensation Committee does not determine such
a date, to the date that is five days prior to the effective date of the
Corporate Transaction), with such Stock Award terminating if not exercised (if
applicable) at or prior to the effective time of the Corporate Transaction in
accordance with the exercise procedures determined by the Compensation
Committee;

(iv)    arrange for the lapse, in whole or in part, of any reacquisition or
repurchase rights held by the Company with respect to the Stock Award;

 

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(v)    cancel or arrange for the cancellation of the Stock Award, to the extent
not vested or not exercised prior to the effective time of the Corporate
Transaction, in exchange for no consideration ($0) or such consideration, if
any, as the Compensation Committee, in its sole discretion, may consider
appropriate; or

(vi)    cancel or arrange for the cancellation of the Stock Award, to the extent
not vested or not exercised prior to the effective time of the Transaction, in
exchange for a payment, in such form as may be determined by the Compensation
Committee, equal to the excess, if any, of (A), the per share amount (or value
of property per share) payable to holders of Common Stock in connection with the
Corporate Transaction, over (B) the per share exercise price under the
applicable Stock Award, multiplied by the number of shares subject to the Stock
Award. For clarity, this payment may be $0 if the amount per share (or value of
property per share) payable to the holders of the Common Stock is equal to or
less than the per share exercise price of the Stock Award. In addition, any
escrow, holdback, earnout or similar provisions in the definitive agreement for
the Corporate Transaction may apply to such payment to the holder of the Stock
Award to the same extent and in the same manner as such provisions apply to the
holders of Common Stock.

The Compensation Committee need not take the same action or actions with respect
to all Stock Awards or portions thereof or with respect to all Participants. The
Compensation Committee may take different actions with respect to the vested and
unvested portions of a Stock Award.

(d)    Appointment of Stockholder Representative. As a condition to the receipt
of a Stock Award under this Plan, a Participant will be deemed to have agreed
that the Stock Award will be subject to the terms of any agreement governing a
Corporate Transaction involving the Company, including, without limitation, a
provision for the appointment of a shareholder representative that is authorized
to act on the Participant’s behalf with respect to any escrow or other
contingent consideration.

(e)    No Restriction on Right to Undertake Transactions. The grant of any Stock
Award under the Plan and the issuance of shares pursuant to any Stock Award does
not affect or restrict in any way the right or power of the Company or the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue
of stock or of options, Options or rights to purchase stock or of bonds,
debentures, preferred or prior preference stocks whose rights are superior to or
affect the Common Stock or the rights thereof or which are convertible into or
exchangeable for Common Stock, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or otherwise.

10.    PLAN TERM; EARLIER TERMINATION OR SUSPENSION OF THE PLAN.

The Compensation Committee may suspend or terminate the Plan at any time. No
Stock Awards may be granted under the Plan while the Plan is suspended or after
it is terminated.

11.    EFFECTIVE DATE OF PLAN.

The Plan will become effective on the Effective Date.

12.    CHOICE OF LAW.

The law of the State of Delaware will govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to that
state’s conflict of laws rules.

 

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13.    DEFINITIONS.

As used in the Plan, the following definitions will apply to the capitalized
terms indicated below:

(a)    “Affiliate” means, at the time of determination, any “parent” or
“subsidiary” of the Company as such terms are defined in Rule 405 of the
Securities Act. The Compensation Committee will have the authority to determine
the time or times at which “parent” or “subsidiary” status is determined within
the foregoing definition.

(b)    “Award” means a Stock Award.

(c)    “Award Agreement” means a Stock Award Agreement.

(d)    “Board” means the Board of Directors of the Company.

(e)    “Canadian Securities Laws” means collectively, all securities laws of the
provinces and territories of Canada and the respective rules and regulations
under such laws together with applicable published policy statements,
instruments, notices and blanket orders or rulings and all discretionary orders
or rulings, if any, applicable to the Company.

(f)    “Capital Stock” means each and every class of common stock of the
Company, regardless of the number of votes per share.

(g)    “Capitalization Adjustment” means any change that is made in, or other
events that occur with respect to, the Common Stock subject to the Plan or
subject to any Stock Award after the Effective Date without the receipt of
consideration by the Company through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, large nonrecurring cash dividend, stock split, reverse stock split,
liquidating dividend, combination of shares, exchange of shares, change in
corporate structure or any similar equity restructuring transaction, as that
term is used in Statement of Financial Accounting Standards Board Accounting
Standards Codification Topic 718 (or any successor thereto). Notwithstanding the
foregoing, the conversion of any convertible securities of the Company will not
be treated as a Capitalization Adjustment.

(h)    “Cause” will have the meaning ascribed to such term in any written
agreement between the Participant and the Company defining such term and, in the
absence of such agreement, such term means, with respect to a Participant, the
occurrence of any of the following events: (i) such Participant’s commission of
any felony or any crime involving fraud, dishonesty or moral turpitude under the
laws of the United States or any state thereof; (ii) such Participant’s
attempted commission of, or participation (whether by affirmative act or
omission) in, a fraud or act of dishonesty against the Company and/or its
Affiliates; (iii) such Participant’s intentional, material violation of any
contract or agreement between the Participant and the Company or of any
statutory duty owed to the Company and/or its Affiliates and which has a
material adverse effect on the Company and/or its Affiliates; (iv) such
Participant’s unauthorized use or disclosure of the Company’s confidential
information or trade secrets; or (v) such Participant’s gross misconduct. The
determination that a termination of the Participant’s Continuous Service is
either for Cause or without Cause will be made by the Company, in its sole and
exclusive judgment and discretion. Any determination by the Company that the
Continuous Service of a Participant was terminated with or without Cause for the
purposes of outstanding Stock Awards held by such Participant will have no
effect upon any determination of the rights or obligations of the Company or
such Participant for any other purpose.

(i)    “Change in Control” means the occurrence, in a single transaction or in a
series of related transactions, of any one or more of the following events:

(i)    any Exchange Act Person becomes the Owner, directly or indirectly, of
securities of the Company representing more than 50% of the combined voting
power of the Company’s then outstanding securities other than by virtue of a
merger, consolidation or similar transaction. Notwithstanding the foregoing, a
Change in Control will not be deemed to occur (A) on account of the acquisition
of securities of the Company directly from the Company, (B) on account of the
acquisition of securities of the Company by an investor, any affiliate thereof
or any other Exchange Act Person that acquires the Company’s securities in a
transaction or series of related transactions the primary purpose of which is to
obtain financing for the Company through the issuance of equity securities,
(C) on account of the acquisition of securities of the Company by any individual
who is, on the Effective Date, either an executive officer or a Director
(either, an “Registration Investor”) and/or any entity in which an Registration
Investor has a direct or indirect interest (whether in the form of voting rights
or participation in profits or capital

 

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contributions) of more than 50% (collectively, the “Registration Entities”) or
on account of the Registration Entities continuing to hold shares that come to
represent more than 50% of the combined voting power of the Company’s then
outstanding securities as a result of the conversion of any class of the
Company’s securities into another class of the Company’s securities having a
different number of votes per share pursuant to the conversion provisions set
forth in the Company’s Amended and Restated Certificate of Incorporation; or
(D) solely because the level of Ownership held by any Exchange Act Person (the
“Subject Person”) exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting
securities by the Company reducing the number of shares outstanding, provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of voting securities by the Company, and after
such share acquisition, the Subject Person becomes the Owner of any additional
voting securities that, assuming the repurchase or other acquisition had not
occurred, increases the percentage of the then outstanding voting securities
Owned by the Subject Person over the designated percentage threshold, then a
Change in Control will be deemed to occur;

(ii)    there is consummated a merger, consolidation or similar transaction
involving (directly or indirectly) the Company and, immediately after the
consummation of such merger, consolidation or similar transaction, the
stockholders of the Company immediately prior thereto do not Own, directly or
indirectly, either (A) outstanding voting securities representing more than 50%
of the combined outstanding voting power of the surviving Entity in such merger,
consolidation or similar transaction or (B) more than 50% of the combined
outstanding voting power of the parent of the surviving Entity in such merger,
consolidation or similar transaction, in each case in substantially the same
proportions as their Ownership of the outstanding voting securities of the
Company immediately prior to such transaction; provided, however, that a merger,
consolidation or similar transaction will not constitute a Change in Control
under this prong of the definition if the outstanding voting securities
representing more than 50% of the combined voting power of the surviving Entity
or its parent are owned by the Registration Entities;

(iii)    there is consummated a sale, lease, exclusive license or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries, other than a sale, lease, license or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by
stockholders of the Company in substantially the same proportions as their
Ownership of the outstanding voting securities of the Company immediately prior
to such sale, lease, license or other disposition; provided, however, that a
sale, lease, exclusive license or other disposition of all or substantially all
of the consolidated assets of the Company and its Subsidiaries will not
constitute a Change in Control under this prong of the definition if the
outstanding voting securities representing more than 50% of the combined voting
power of the acquiring Entity or its parent are owned by the Registration
Entities; or

(iv)    individuals who, on the date the Plan is adopted by the Compensation
Committee, are members of the Board (the “Incumbent Board”) cease for any reason
to constitute at least a majority of the members of the Board; provided,
however, that if the appointment or election (or nomination for election) of any
new Board member was approved or recommended by a majority vote of the members
of the Incumbent Board then still in office, such new member will, for purposes
of this Plan, be considered as a member of the Incumbent Board.

Notwithstanding the foregoing definition or any other provision of this Plan,
the term Change in Control will not include a sale of assets, merger or other
transaction effected exclusively for the purpose of changing the domicile of the
Company and the definition of Change in Control (or any analogous term) in an
individual written agreement between the Company or any Affiliate and the
Participant will supersede the foregoing definition with respect to Stock Awards
subject to such agreement; provided, however, that if no definition of Change in
Control or any analogous term is set forth in such an individual written
agreement, the foregoing definition will apply.

(j)    “Code” means the Internal Revenue Code of 1986, as amended, including any
applicable regulations and guidance thereunder.

(k)    “Committee” means a committee of one or more Directors to whom authority
has been delegated by the Compensation Committee in accordance with
Section 2(c). Authority to grant Awards may only be deletgated to a Committee
comprised of a majority of the Company’s Independent Directors.

 

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(l)    “Common Stock” means, as of the Effective Date, the common stock of the
Company, having 1 vote per share.

(m)    “Company” means Mirati Therapeutics, Inc., a Delaware corporation.

(n)    “Compensation Committee” means the Compensation Committee of the Board as
composed solely of Independent Directors.

(o)    “Consultant” means any person, including an advisor, who is (i) engaged
by the Company or an Affiliate to render consulting or advisory services and is
compensated for such services, or (ii) serving as a member of the board of
directors of an Affiliate and is compensated for such services. However, service
solely as a Director, or payment of a fee for such service, will not cause a
Director to be considered a “Consultant” for purposes of the Plan.
Notwithstanding the foregoing, a person is treated as a Consultant under this
Plan only if a Form S-8 Registration Statement under the Securities Act is
available to register either the offer or the sale of the Company’s securities
to such person.

(p)    “Continuous Service” means that the Participant’s service with the
Company or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. A change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant’s service with the Company or an Affiliate, will not terminate a
Participant’s Continuous Service ; provided, however, that if the Entity for
which a Participant is rendering services ceases to qualify as an Affiliate, as
determined by the Compensation Committee, in its sole discretion, such
Participant’s Continuous Service will be considered to have terminated on the
date such Entity ceases to qualify as an Affiliate. To the extent permitted by
law, the Compensation Committee or the chief executive officer of the Company,
in that party’s sole discretion, may determine whether Continuous Service will
be considered interrupted in the case of (i) any leave of absence approved by
the Compensation Committee or chief executive officer, including sick leave,
military leave or any other personal leave, or (ii) transfers between the
Company, an Affiliate, or their successors. Notwithstanding the foregoing, a
leave of absence will be treated as Continuous Service for purposes of vesting
in a Stock Award only to such extent as may be provided in the Company’s leave
of absence policy, in the written terms of any leave of absence agreement or
policy applicable to the Participant, or as otherwise required by law.

(q)    “Corporate Transaction” means the consummation, in a single transaction
or in a series of related transactions, of any one or more of the following
events:

(i)    a sale or other disposition of all or substantially all, as determined by
the Compensation Committee, in its sole discretion, of the consolidated assets
of the Company and its Subsidiaries;

(ii)    a sale or other disposition of at least 50% of the outstanding
securities of the Company;

(iii)    a merger, consolidation or similar transaction following which the
Company is not the surviving corporation; or

(iv)    a merger, consolidation or similar transaction following which the
Company is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger, consolidation or similar transaction are
converted or exchanged by virtue of the merger, consolidation or similar
transaction into other property, whether in the form of securities, cash or
otherwise.

(r)    “Director” means a member of the Board.

(s)    “Disability” means, with respect to a Participant, the inability of such
Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for a continuous
period of not less than 12 months, as provided in Sections 22(e)(3) and
409A(a)(2)(c)(i) of the Code, and will be determined by the Compensation
Committee on the basis of such medical evidence as the Compensation Committee
deems warranted under the circumstances.

 

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(t)    “Effective Date” means December 30, 2019, the date the Compensation
Committee approved the Plan.

(u)    “Eligible Employee” has the meaning set forth in Section 1(a).

(v)    “Employee” means any person employed by the Company or an Affiliate.
However, service solely as a Director, or payment of a fee for such services,
will not cause a Director to be considered an “Employee” for purposes of the
Plan.

(w)    “Entity” means a corporation, partnership, limited liability company or
other entity.

(x)    “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

(y)    “Exchange Act Person” means any natural person, Entity or “group” (within
the meaning of Section 13(d) or 14(d) of the Exchange Act), except that
“Exchange Act Person” will not include (i) the Company or any Subsidiary of the
Company, (ii) any employee benefit plan of the Company or any Subsidiary of the
Company or any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any Subsidiary of the Company, (iii) an
underwriter temporarily holding securities pursuant to a registered public
offering of such securities, (iv) an Entity Owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
Ownership of stock of the Company; or (v) any natural person, Entity or “group”
(within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of
the Effective Date, is the Owner, directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the Company’s
then outstanding securities.

(z)    “Fair Market Value” means, as of any date, the value of the Common Stock
determined as follows:

(i)    If the Common Stock is listed on any established stock exchange or traded
on any established market, the Fair Market Value of a share of Common Stock will
be the closing sales price for such stock as quoted on such exchange or market
(or the exchange or market where the greatest volume of trading and value in the
Common Stock occurs) on the date of determination, as reported in a source the
Compensation Committee deems reliable.

(ii)    Unless otherwise provided by the Compensation Committee, if there is no
closing sales price for the Common Stock on the date of determination, then the
Fair Market Value will be the closing selling price on the last preceding date
for which such quotation exists.

(iii)    In the absence of such markets for the Common Stock, the Fair Market
Value will be determined by the Compensation Committee in good faith and in a
manner that complies with Sections 409A of the Code.

(aa)    “Incentive Stock Option” means an option that is intended to be, and
qualifies as, an “incentive stock option” within the meaning of Section 422 of
the Code.

(bb)    “Independent Director” has the meaning set forth in Section 1(a).

(cc)    “Inducement Award Rules” has the meaning set forth in Section 1(a).

(dd)    “Insider” has the same meaning ascribed thereto in the Toronto Stock
Exchange Company Manual.

 

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(ee)    “Non-Employee Director” means a Director who either (i) is not a current
employee or officer of the Company or an Affiliate, does not receive
compensation, either directly or indirectly, from the Company or an Affiliate
for services rendered as a consultant or in any capacity other than as a
Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction for
which disclosure would be required under Item 404(a) of Regulation S-K, and is
not engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
“non-employee director” for purposes of Rule 16b-3.

(ff)    “Nonstatutory Stock Option” means any option granted pursuant to
Section 5 that does not qualify as an Incentive Stock Option.

(gg)    “Officer” means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act.

(hh)    “Option” means a Nonstatutory Stock Option to purchase shares of Common
Stock granted pursuant to the Plan.

(ii)    “Option Agreement” means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an Option grant. Each Option
Agreement will be subject to the terms and conditions of the Plan.

(jj)    “Optionholder” means a person to whom an Option is granted pursuant to
the Plan or, if applicable, such other person who holds an outstanding Option.

(kk)    “Other Stock Award” means an award based in whole or in part by
reference to the Common Stock which is granted pursuant to the terms and
conditions of Section 6(c).

(ll)    “Other Stock Award Agreement” means a written agreement between the
Company and a holder of an Other Stock Award evidencing the terms and conditions
of an Other Stock Award grant. Each Other Stock Award Agreement will be subject
to the terms and conditions of the Plan.

(mm)    “Own,” “Owned,” “Owner,” “Ownership” means a person or Entity will be
deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired
“Ownership” of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.

(nn)    “Participant” means a person to whom a Stock Award is granted pursuant
to the Plan or, if applicable, such other person who holds an outstanding Stock
Award.

(oo)    “Plan” means this Mirati Therapeutics, Inc. Inducement Plan.

(pp)    “Restricted Stock Award” means an award of shares of Common Stock which
is granted pursuant to the terms and conditions of Section 6(a).

(qq)    “Restricted Stock Award Agreement” means a written agreement between the
Company and a holder of a Restricted Stock Award evidencing the terms and
conditions of a Restricted Stock Award grant. Each Restricted Stock Award
Agreement will be subject to the terms and conditions of the Plan.

(rr)    “Restricted Stock Unit Award” means a right to receive shares of Common
Stock which is granted pursuant to the terms and conditions of Section 6(b).

(ss)    “Restricted Stock Unit Award Agreement” means a written agreement
between the Company and a holder of a Restricted Stock Unit Award evidencing the
terms and conditions of a Restricted Stock Unit Award grant. Each Restricted
Stock Unit Award Agreement will be subject to the terms and conditions of the
Plan.

 

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(tt)    “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.

(uu)    “Securities Act” means the Securities Act of 1933, as amended.

(vv)    “Stock Appreciation Right” or “SAR” means a right to receive the
appreciation on Common Stock that is granted pursuant to the terms and
conditions of Section 5.

(ww)    “Stock Appreciation Right Agreement” means a written agreement between
the Company and a holder of a Stock Appreciation Right evidencing the terms and
conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right
Agreement will be subject to the terms and conditions of the Plan.

(xx)    “Stock Award” means any right to receive Common Stock granted under the
Plan, including a Nonstatutory Stock Option, a Restricted Stock Award, a
Restricted Stock Unit Award, a Stock Appreciation Right, or any Other Stock
Award.

(yy)    “Stock Award Agreement” means a written agreement between the Company
and a Participant evidencing the terms and conditions of a Stock Award grant.
Each Stock Award Agreement will be subject to the terms and conditions of the
Plan.

(zz)    “Subsidiary” means, with respect to the Company, (i) any corporation of
which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, stock of any other class or classes of
such corporation will have or might have voting power by reason of the happening
of any contingency) is at the time, directly or indirectly, Owned by the
Company, and (ii) any partnership, limited liability company or other entity in
which the Company has a direct or indirect interest (whether in the form of
voting or participation in profits or capital contribution) of more than 50%.

 

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