EXHIBIT 10.4

IMMUNOVANT SCIENCES LTD.

2018 EQUITY INCENTIVE PLAN

AMENDED AND RESTATED

AMENDMENT AND RESTATEMENT ADOPTED BY THE BOARD OF DIRECTORS: JULY 29, 2019

AMENDMENT AND RESTATEMENT APPROVED BY THE MEMBERS: JULY 29, 2019

TERMINATION DATE: JULY 21, 2029

The Plan was established effective as of the Effective Date and is hereby
amended and restated as of July 22, 2019 (the “Amendment Effective Date”). All
Awards granted under the Plan, whether prior to or following the Amendment
Effective Date, shall be governed by the terms of this amended and restated
Plan.

1.    GENERAL.

(a)    Eligible Award Recipients. Employees, Directors and Consultants are
eligible to receive Awards.

(b)    Available Awards. The Plan provides for the grant of the following types
of Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options,
(iii) Stock Appreciation Rights, (iv) Restricted Stock Awards, (v) Restricted
Stock Unit Awards, and (vi) Other Stock Awards.

(c)    Purpose. The Plan, through the granting of Awards, is intended to help
the Company secure and retain the services of eligible award recipients, provide
incentives for such persons to exert maximum efforts for the success of the
Company and any Affiliate and provide a means by which the eligible recipients
may benefit from increases in value of the Common Stock.

2.    ADMINISTRATION.

(a)    Administration by Board. The Board will administer the Plan. The Board
may delegate administration of the Plan to a Committee or Committees, as
provided in Section 2(c).

(b)    Powers of Board. The Board will have the power, subject to, and within
the limitations of, the express provisions of the Plan:

(i)    To determine (A) who will be granted Awards; (B) when and how each Award
will be granted; (C) what type of Award will be granted; (D) the provisions of
each Award (which need not be identical), including when a person will be
permitted to exercise or otherwise receive cash or Common Stock under the Award;
(E) the number of shares of Common Stock subject to, or the cash value of, an
Award; and (F) the Fair Market Value applicable to an Award.

(ii)    To construe and interpret the Plan and Awards granted under it, and to
establish, amend and revoke rules and regulations for administration of the Plan
and Awards. The Board, in the exercise of these powers, may correct any defect,
omission or

 

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inconsistency in the Plan or in any Award Agreement, in a manner and to the
extent it will deem necessary or expedient to make the Plan or Award fully
effective.

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

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

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

(vi)    To amend the Plan in any respect the Board deems necessary or advisable,
including, without limitation, by adopting amendments relating to Incentive
Stock Options and certain nonqualified deferred compensation under Section 409A
of the Code and/or to make the Plan or Awards granted under the Plan compliant
with the requirements for Incentive Stock Options or 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. However, if
required by applicable law, and except as provided in Section 9(a) relating to
Capitalization Adjustments, the Company will seek shareholder approval of any
amendment of the Plan that (A) materially increases the number of shares of
Common Stock available for issuance under the Plan, (B) materially expands the
class of individuals eligible to receive Awards under the Plan, (C) materially
increases the benefits accruing to Participants under the Plan, (D) materially
reduces the price at which shares of Common Stock may be issued or purchased
under the Plan, (E) materially extends the term of the Plan, or (F) materially
expands the types of Awards available for issuance under the Plan. Except as
otherwise provided in the Plan or an Award Agreement, no amendment of the Plan
will materially impair a Participant’s rights under an outstanding Award unless
(1) the Company requests the consent of the affected Participant, and (2) such
Participant consents in writing.

(vii)    To submit any amendment to the Plan for shareholder approval,
including, but not limited to, amendments to the Plan intended to satisfy the
requirements of (A) Section 422 of the Code regarding Incentive Stock Options,
or (B) Rule 16b-3.

(viii)    To approve forms of Award Agreements for use under the Plan and to
amend the terms of any one or more Awards, including, but not limited to,
amendments to provide terms more favorable to the Participant than previously
provided in the Award Agreement, subject to any specified limits in the Plan
that are not subject to Board discretion; provided however, that a Participant’s
rights under any 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 Board, 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 Board may amend
the terms of any one or more Awards without the affected Participant’s consent
(A) to maintain the qualified status of the Award as an Incentive Stock Option
under Section 422 of the Code; (B) to change the terms of an Incentive Stock
Option, if such change results in impairment of the Award solely because it
impairs the qualified status of the Award as an Incentive Stock Option under
Section 422 of the Code; (C) to clarify the manner of exemption

 

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from, or to bring the Award into compliance with, Section 409A of the Code; or
(D) to comply with other applicable laws or listing requirements.

(ix)    Generally, to exercise such powers and to perform such acts as the Board
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 Awards.

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

(xi)    To effect, with the consent of any adversely affected Participant,
(A) the reduction of the exercise, purchase or strike price of any outstanding
Award; (B) the cancellation of any outstanding Award and the grant in
substitution therefor of a new (1) Option or SAR, (2) Restricted Stock Award,
(3) Restricted Stock Unit Award, (4) Other Stock Award, (5) cash and/or
(6) other valuable consideration determined by the Board, in its sole
discretion, with any such substituted award (x) covering the same or a different
number of shares of Common Stock as the cancelled Award and (y) granted under
the Plan or another equity or compensatory plan of the Company; or (C) any other
action that is treated as a repricing under generally accepted accounting
principles.

(c)    Delegation to Committee.

(i)    General. The Board may delegate some or all of the administration of the
Plan to a Committee or Committees. If administration of the Plan is delegated to
a Committee, the Committee will have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board that have been delegated
to the Committee, including the power to delegate to a subcommittee of the
Committee any of the administrative powers the Committee is authorized to
exercise (and references in the Plan to the Board will thereafter be to the
Committee or subcommittee, as applicable). Any delegation of administrative
powers will be reflected in resolutions, not inconsistent with the provisions of
the Plan, adopted from time to time by the Board or Committee (as applicable).
The Board may retain the authority to concurrently administer the Plan with the
Committee and may, at any time, revest in the Board some or all of the powers
previously delegated.

(ii)    Rule 16b-3 Compliance. The Committee may consist solely of two or more
Non-Employee Directors in accordance with Rule 16b-3.

(d)    Delegation to an Officer. The Board may delegate to one (1) or more
Officers the authority to do one or both of the following: (i) designate
Employees who are not Officers to be recipients of Options and SARs (and, to the
extent permitted by applicable law, other Awards) and, to the extent permitted
by applicable law, the terms of such Awards, and (ii) determine the number of
shares of Common Stock to be subject to such Awards granted to such Employees;
provided, however, that the Board resolutions regarding such delegation will
specify the total number of shares of Common Stock that may be subject to the
Awards granted by such Officer and that such Officer may not grant an Award to
himself or herself. Any such Awards will be granted on the form of Award
Agreement most recently approved for use by the Committee or the Board, unless
otherwise provided in the resolutions approving the delegation authority. The
Board may not delegate authority to an Officer who is acting solely in the
capacity

 

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of an Officer (and not also as a Director) to determine the Fair Market Value
pursuant to Section 13(w)(iii) below.

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

3.    SHARES SUBJECT TO THE PLAN.

(a)    Share Reserve.

(i)    Subject to Section 9(a) relating to Capitalization Adjustments, the
aggregate number of shares of Common Stock that may be issued pursuant to Awards
from and after the Effective Date will not exceed 9,750,000 shares (the “Share
Reserve”).

(ii)    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 Awards except as
provided in Section 7(a).

(iii)    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 an Award or any portion
thereof (i) expires or otherwise terminates without all of the shares covered by
such 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 an 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 an Award or as consideration for the exercise or purchase price of an Award
will again become available for issuance under the Plan.

(c)    Incentive Stock Option Limit. Subject to the provisions of Section 9(a)
relating to Capitalization Adjustments, the aggregate maximum number of shares
of Common Stock that may be issued out of the Share Reserve pursuant to the
exercise of Incentive Stock Options will be 9,750,000 shares of Common Stock.

(d)    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.

(a)    Eligibility for Specific Awards. Incentive Stock Options may be granted
only to employees of the Company or a “parent corporation” or “subsidiary
corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of
the Code).

 

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Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants; provided, however, that Awards may not be granted to Employees,
Directors and Consultants who are providing Continuous Service only to any
“parent” of the Company, as such term is defined in Rule 405, unless (i) the
stock underlying such Awards is treated as “service recipient stock” under
Section 409A of the Code (for example, because the Awards are granted pursuant
to a corporate transaction such as a spin off transaction), or (ii) the Company,
in consultation with its legal counsel, has determined that such Awards are
otherwise exempt from Section 409A of the Code, or (iii) the Company, in
consultation with its legal counsel, has determined that such Awards comply with
the distribution requirements of Section 409A of the Code.

(b)    Ten Percent Shareholders. A Ten Percent Shareholder will not be granted
an Incentive Stock Option unless the exercise price of such Option is at least
one hundred ten percent (110%) of the Fair Market Value on the date of grant and
the Option is not exercisable after the expiration of five (5) years from the
date of grant.

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 Board or its authorized delegee deems appropriate. All Options
will be separately designated Incentive Stock Options or Nonstatutory Stock
Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates will be issued for shares of Common Stock purchased
on exercise of each type of Option. If an Option is not specifically designated
as an Incentive Stock Option, or if an Option is designated as an Incentive
Stock Option but some portion or all of the Option fails to qualify as an
Incentive Stock Option under the applicable rules, then the Option (or portion
thereof) will be a Nonstatutory Stock Option. The provisions of separate Options
or SARs need not be identical; provided, however, that each Award Agreement will
conform to (through incorporation of provisions hereof by reference in the
applicable Award Agreement or otherwise) the substance of each of the following
provisions:

(a)    Term. Subject to the provisions of Section 4(b) regarding Ten Percent
Shareholders, no Option or SAR will be exercisable after the expiration of ten
(10) years from the date of its grant or such shorter period specified in the
Award Agreement.

(b)    Exercise Price. Subject to the provisions of Section 4(b) regarding Ten
Percent Shareholders, the exercise or strike price of each Option or SAR will be
not less than one hundred percent (100%) of the Fair Market Value of the Common
Stock subject to the Option or SAR on the date the Award is granted.
Notwithstanding the foregoing, an Option or SAR may be granted with an exercise
or strike price lower than one hundred percent (100%) of the Fair Market Value
of the Common Stock subject to the Award if such Award is granted pursuant to an
assumption of or substitution for another option or stock appreciation right
pursuant to a Corporate Transaction and in a manner consistent with the
provisions of Section 409A of the Code and, if applicable, Section 424(a) of the
Code. 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 Board in its sole discretion, by any
combination of the methods of payment set forth below. The Board will have the
authority to grant Options that do not permit all of the following methods of
payment (or otherwise restrict the ability to use

 

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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 Board 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)    if an Option is a Nonstatutory Stock Option, 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
Board and specified in the applicable 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
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 Board and contained in the Award Agreement
evidencing such SAR.

(e)    Transferability of Options and SARs. The Board may, in its sole
discretion, impose such limitations on the transferability of Options and SARs
as the Board will determine. In the absence of such a determination by the Board
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 Board may permit transfer of the
Option or SAR in a manner that is not

 

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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 Board 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 as permitted by Treasury Regulation
1.421-1(b)(2). If an Option is an Incentive Stock Option, such Option may be
deemed to be a Nonstatutory Stock Option as a result of such transfer.

(iii)    Beneficiary Designation. Subject to the approval of the Board 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, upon 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
Board 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 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 Award as of the date of termination of Continuous
Service) within the period of time ending on the earlier of (i) the date three
(3) months following the termination of the Participant’s Continuous Service (or
such longer or shorter period specified in the applicable Award Agreement, and
(ii) the expiration of the term of the Option or SAR as set forth in the 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.

(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, or (ii) the expiration of the
term of the Option or SAR as set forth in the

 

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applicable Award Agreement. In addition, unless otherwise provided in a
Participant’s Award Agreement, if the sale of any Common Stock received upon
exercise of an Option or SAR following the 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 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 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 Award Agreement.

(i)    Disability of Participant. Except as otherwise provided in the applicable
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 twelve (12) months following such
termination of Continuous Service (or such longer or shorter period specified in
the Award Agreement), and (ii) the expiration of the term of the Option or SAR
as set forth in the 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
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 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 eighteen (18) months following the date of death (or such longer
or shorter period specified in the Award Agreement), and (ii) the expiration of
the term of such Option or SAR as set forth in the 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 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
time of such termination of Continuous Service.

(l)    Non-Exempt Employees. If an Option or SAR is granted to an 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 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,

 

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(iii) upon a Change in Control, or (iv) upon the Participant’s retirement (as
such term may be defined in the Participant’s 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
(6) 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 Award will be exempt from the employee’s regular rate of
pay, the provisions of this Section 5(l) will apply to all Awards and are hereby
incorporated by reference into such Award Agreements.

6.    PROVISIONS OF 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 Board deems
appropriate. To the extent consistent with the Company’s bylaws, at the Board’s
election, shares of Common Stock underlying a Restricted Stock Award may be
(i) held in book entry form subject to the Company’s instructions until any
restrictions relating to the Restricted Stock Award lapse; or (ii) evidenced by
a certificate, which certificate will be held in such form and manner as
determined by the Board. 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 that may be acceptable to the Board, 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 Board.

(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 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 Board 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.

 

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(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 Board
deems 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
Board 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 Board, in its sole
discretion, and permissible under applicable law.

(ii)    Vesting. At the time of the grant of a Restricted Stock Unit Award, the
Board 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 Board and contained in the
Restricted Stock Unit Award Agreement.

(iv)    Additional Restrictions. At the time of the grant of a Restricted Stock
Unit Award, the Board, 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 Board and contained in the Restricted Stock Unit Award Agreement. At the
sole discretion of the Board, 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 Board. 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 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 one hundred

 

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percent (100%) of the Fair Market Value of the Common Stock at the time of
grant) may be granted either alone or in addition to Awards provided for under
Section 5 and the preceding provisions of this Section 6. Subject to the
provisions of the Plan, the Board 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, including, but not
limited to, any performance metrics, performance vesting conditions or
performance periods, as applicable.

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
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 Awards and to issue and sell shares of Common Stock
upon exercise of the Awards; provided, however, that this undertaking will not
require the Company to register under the Securities Act the Plan, any Award or
any Common Stock issued or issuable pursuant to any such 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 Awards unless and until such
authority is obtained. A Participant will not be eligible for the grant of an
Award or the subsequent issuance of cash or Common Stock pursuant to the 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 Award. Furthermore, the Company will have no duty or
obligation to warn or otherwise advise such holder of a pending termination or
expiration of an Award or a possible period in which the Award may not be
exercised. The Company has no duty or obligation to minimize the tax
consequences of an Award to the holder of such Award.

8.    MISCELLANEOUS.

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

(b)    Corporate Action Constituting Grant of Awards. Corporate action
constituting a grant by the Company of an Award to any Participant will be
deemed completed as of the date of such corporate action, unless otherwise
determined by the Board, regardless of when the instrument, certificate, or
letter evidencing the Award is communicated to, or actually received or accepted
by, the Participant. In the event that the corporate records (e.g., Board
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 Award Agreement as a result of a
clerical error in the papering of the Award Agreement, the corporate records
will control and the Participant will have no legally binding right to the
incorrect term in the Award Agreement.

 

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(c)    Shareholder Rights. Other than with respect to Restricted Stock Awards,
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 an Award
unless and until (i) such Participant has satisfied all requirements for
exercise of, or the issuance of shares of Common Stock under, the Award pursuant
to its terms, and (ii) the issuance of the Common Stock subject to the Award has
been entered into the books and records of the Company.

(d)    No Employment or Other Service Rights. Nothing in the Plan, any Award
Agreement or any other instrument executed thereunder or in connection with any
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 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) after the date of
grant of any Award to the Participant, the Board has the right in its sole
discretion to (x) make a corresponding reduction in the number of shares subject
to any portion of such Award that is scheduled to vest or become payable after
the date of such change in time commitment, and (y) subject to the requirements
of Section 409A of the Code, in lieu of or in combination with such a reduction,
extend the vesting or payment schedule applicable to such Award. In the event of
any such reduction, the Participant will have no right with respect to any
portion of the Award that is so reduced or extended.

(f)    Incentive Stock Option Limitations. To the extent that the aggregate Fair
Market Value (determined at the time of grant) of Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by any
Optionholder during any calendar year (under all plans of the Company and any
Affiliates) exceeds one hundred thousand dollars ($100,000) (or such other limit
established in the Code) or otherwise does not comply with the rules governing
Incentive Stock Options, the Options or portions thereof that exceed such limit
(according to the order in which they were granted) or otherwise do not comply
with such rules will be treated as Nonstatutory Stock Options, notwithstanding
any contrary provision of the applicable Option Agreement(s).

(g)    Investment Assurances. The Company may require a Participant, as a
condition of exercising or acquiring Common Stock under any 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 he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Award; and (ii) to give written assurances satisfactory
to the Company stating that the Participant is acquiring Common Stock subject to
the 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

 

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the exercise or acquisition of Common Stock under the 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.

(h)    Withholding Obligations. Unless prohibited by the terms of an Award
Agreement, the Company may, in its sole discretion, satisfy any federal, state
or local tax withholding obligation relating to an 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
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 Award as a
liability for financial accounting purposes); (iii) withholding cash from an
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 Award Agreement.

(i)    Electronic Delivery. Any reference herein 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) or posted on the
Company’s intranet (or other shared electronic medium controlled by the Company
to which the Participant has access).

(j)    Deferrals. To the extent permitted by applicable law, the Board, 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
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 Board may provide for distributions while a Participant is still an
employee or otherwise providing services to the Company. The Board is authorized
to make deferrals of 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.

(k)    Compliance with Section 409A of the Code. Unless otherwise expressly
provided for in an Award Agreement, the Plan and Award Agreements will be
interpreted to the greatest extent possible in a manner that makes the Plan and
the 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 Board
determines that any Award granted hereunder is not exempt from and is therefore
subject to Section 409A of the Code, the Award Agreement evidencing such 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 an Award
Agreement is silent on terms necessary for compliance, such terms are hereby
incorporated by reference into the Award Agreement. Notwithstanding anything to
the contrary in the Plan (and unless the Award Agreement specifically provides
otherwise), if the shares of Common Stock are publicly traded, and if a
Participant holding an Award that constitutes “deferred compensation” under
Section 409A of the Code is a “specified employee” for purposes of

 

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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 (6) months following the date of such Participant’s
“separation from service” 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 (6) month period elapses, with the balance paid
thereafter on the original schedule.

(l)    Clawback/Recovery. All 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 Board may impose such other clawback,
recovery or recoupment provisions in an Award Agreement as the Board 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 or an Affiliate.

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

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

(b)    Dissolution. Except as otherwise provided in the Award Agreement, in the
event of a Dissolution of the Company, all outstanding Awards (other than 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, 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 Award is providing Continuous
Service, provided, however, that the Board may, in its sole discretion, cause
some or all Awards to become fully vested, exercisable and/or no longer subject
to repurchase or forfeiture (to the extent such Awards have not previously
expired or terminated) before the Dissolution is completed but contingent on its
completion.

(c)    Corporate Transactions. The following provisions will apply to Awards in
the event of a Transaction unless otherwise provided in the Award Agreement or
any other written agreement between the Company or any Affiliate and the
Participant or unless otherwise expressly provided by the Board at the time of
grant of an Award. In the event of a Transaction, then, notwithstanding any
other provision of the Plan, the Board may take one or

 

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more of the following actions with respect to Awards, contingent upon the
closing or completion of the Transaction:

(i)    arrange for the surviving corporation or acquiring corporation (or the
surviving or acquiring corporation’s parent company) to assume or continue the
Award or to substitute a similar stock award for the Award (including, but not
limited to, an award to acquire the same consideration paid to the shareholders
of the Company pursuant to the 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 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 Award (and, if
applicable, the time at which the Award may be exercised) to a date prior to the
effective time of such Transaction as the Board determines (or, if the Board
does not determine such a date, to the date that is five (5) days prior to the
effective date of the Transaction), with such Award terminating if not exercised
(if applicable) at or prior to the effective time of the Transaction; provided,
however, that the Board may require Participants to complete and deliver to the
Company a notice of exercise before the effective date of a Transaction, which
exercise is contingent upon the effectiveness of such Transaction;

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

(v)    cancel or arrange for the cancellation of the Award, to the extent not
vested or not exercised prior to the effective time of the Transaction, in
exchange for such cash consideration, if any, as the Board, in its sole
discretion, may consider appropriate; and

(vi)    make a payment, in such form as may be determined by the Board equal to
the excess, if any, of (A) the value of the property the Participant would have
received upon the exercise of the Award immediately prior to the effective time
of the Transaction, over (B) any exercise price payable by such holder in
connection with such exercise. For clarity, this payment may be zero ($0) if the
value of the property is equal to or less than the exercise price. Payments
under this provision may be delayed to the same extent that payment of
consideration to the holders of the Company’s Common Stock in connection with
the Transaction is delayed as a result of escrows, earn outs, holdbacks or any
other contingencies.

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

(d)    Change in Control. An Award may be subject to additional acceleration of
vesting and exercisability upon or after a Change in Control as may be provided
in the Award Agreement for such Award or as may be provided in any other written
agreement between the Company or any Affiliate and the Participant, but in the
absence of such provision, no such acceleration will occur.

 

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

(a)    Plan Term. The Board may suspend or terminate the Plan at any time.
Unless terminated sooner by the Board, the Plan will automatically terminate on
the day before the tenth (10th) anniversary of the earlier of (i) the date the
amended and restated Plan is adopted by the Board, or (ii) the date the amended
and restated Plan is approved by the shareholders of the Company. No Awards may
be granted under the Plan while the Plan is suspended or after it is terminated.

11.    EFFECTIVE DATE OF PLAN.

The Plan first became effective on the Effective Date.

12.    CHOICE OF LAW.

To the extent that United States federal laws do not otherwise control, the Plan
and all determinations made and actions taken pursuant to the Plan shall be
governed by the internal laws of the State of New York, and construed
accordingly, except for those matters subject to The Companies Act, 1981 of
Bermuda (as amended), which shall be governed by Bermuda law, without giving
effect to principles of conflicts of laws, and construed accordingly.

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, each of the following:
(i) any “parent” of the Company, as such term is defined in Rule 405; (ii) any
“subsidiary” of the Company, as such term is defined in Rule 405; and (iii) any
other entity in which the Company or any of its Affiliates has a material equity
interest or control relationship unless otherwise designated by the Board. An
entity will be deemed an Affiliate of the Company for purposes of this
definition only for such periods as the requisite ownership or control
relationship is maintained. The Board will have the authority to determine the
time or times at which “parent” or “majority-owned subsidiary” status is
determined within the definitions set forth in Rule 405.

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

(c)    “Award Agreement” means a written agreement between the Company and a
Participant evidencing the terms and conditions of an Award.

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

(e)    “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 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.

 

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(f)    “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 willful
failure substantially to perform his or her duties and responsibilities to the
Company or deliberate violation of a Company policy; (ii) such Participant’s
commission of any act of fraud, embezzlement, dishonesty or any other willful
misconduct that has caused or is reasonably expected to result in material
injury to the Company; (iii) unauthorized use or disclosure by such Participant
of any proprietary information or trade secrets of the Company or any other
party to whom the Participant owes an obligation of nondisclosure as a result of
his or her relationship with the Company; or (iv) such Participant’s willful
breach of any of his or her obligations under any written agreement or covenant
with the Company. 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 discretion. Any determination by the Company that the
Continuous Service of a Participant was terminated with or without Cause for the
purposes of outstanding 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.

(g)    “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 fifty percent (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 an Effective Date Majority Owner or any individual who is, on the IPO
Date, an executive officer of the Company or a Director (each an “IPO Investor”)
and/or any entity in which an IPO Investor has a direct or indirect interest
(whether in the form of voting rights or participation in profits or capital
contributions) of more than 50% (each, an “IPO Entity” and collectively, the
“IPO Entities”) or on account of the IPO Entities continuing to hold shares that
come to represent more than 50% of the combined voting power of the Company’s
then outstanding securities, including 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 fifty percent (50%) 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 fifty percent (50%), then a Change in Control
will be deemed to occur;

 

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(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
shareholders of the Company immediately prior thereto do not Own, directly or
indirectly, either (A) outstanding voting securities representing more than
fifty percent (50%) of the combined outstanding voting power of the surviving
Entity in such merger, consolidation or similar transaction or (B) more than
fifty percent (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 either (A) the outstanding voting securities representing more
than 50% of the combined voting power of the surviving Entity or its parent are
owned, directly or indirectly, by the IPO Entities (including any Effective Date
Majority Owner), or (B) the right to appoint directors entitled to cast a
majority of the votes on each matter presented to the Board is held, directly or
indirectly, by the IPO Entities (including any Effective Date Majority Owner);

(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
shareholders 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 either
(A) the outstanding voting securities representing more than 50% of the combined
voting power of the acquiring Entity or its parent are owned, directly or
indirectly, by the IPO Entities (including any Effective Date Majority Owner),
or (B) the right to appoint directors entitled to cast a majority of the votes
on each matter presented to the Board is held, directly or indirectly, by the
IPO Entities (including any Effective Date Majority Owner); or

(iv)    individuals who, on the date the Plan is adopted by the Board, 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 (or was caused by the IPO Entities (including any Effective
Date Majority Owner) or any natural person, Entity or “group” (within the
meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the date the
Plan is adopted by the Board, is the Owner, directly or indirectly, of
securities of the Company representing more than fifty percent (50%) of the
combined voting power of the Company’s then outstanding securities), such new
member will, for purposes of the Plan, be considered as a member of the
Incumbent Board.

Notwithstanding the foregoing definition or any other provision of the Plan,
(A) the term Change in Control will not include a change in the ownership of an
Effective Date Majority Owner of the Company or a sale of assets, merger or
other transaction effected exclusively for the purpose of changing the domicile
of the Company, and (B) the definition of Change in Control (or any analogous
term) in an individual written agreement between the Company or

 

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any Affiliate and the Participant will supersede the foregoing definition with
respect to 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.

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

(i)    “Committee” means a committee of two (2) or more Directors to whom
authority has been delegated by the Board in accordance with Section 2(c).

(j)    “Common Stock” means the common shares of the Company.

(k)    “Company” means Immunovant Sciences Ltd., an exempted limited company
incorporated under the laws of Bermuda, with its registered office at Clarendon
House, 2 Church Street, Hamilton HM 11, Bermuda, or any successor to all or
substantially all of its businesses by merger, amalgamation, consolidation,
purchase of assets, or otherwise.

(l)    “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 the
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, or for the avoidance of doubt, a Form S-8 Registration Statement
under the Securities Act would be available to register either the offer or the
sale of the Company’s securities to such person, if the Common Stock were
registered under Section 12 of the Exchange Act.

(m)    “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, Director or
Consultant 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 Board 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. For example, a change in status from an Employee of the
Company to a Consultant of the Company or to a Director will not constitute an
interruption of Continuous Service. Notwithstanding the foregoing, to the extent
permitted by law, the Board or the chief executive officer of the Company or any
of its Subsidiaries, as applicable, in that party’s sole discretion, may
determine (at any time, including upon the date of grant of the applicable Award
or upon the commencement of the applicable leave of absence or the date of
transfer) whether Continuous Service will be considered interrupted and when
Continuous Service will be considered terminated in the case of (i) any leave of
absence approved by the Board or the chief executive officer, including sick
leave, military leave or any other personal leave, or (ii) transfers between the
Company, an Affiliate, or their successors; provided, however, that a leave of
absence will be treated as Continuous Service for purposes of vesting in an
Award only to such extent as may be provided in the Company’s leave of absence
policy,

 

19.

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in the written terms of any leave of absence agreement or policy applicable to
the Participant, or as otherwise required by law.

(n)    “Corporate Transaction” means a sale of all or substantially all of the
Company’s assets, or a merger, consolidation or other capital reorganization or
business combination transaction of the Company with or into another
corporation, entity or person, or the direct or indirect acquisition (including
by way of a tender or exchange offer) by any person, or persons acting as a
group, of beneficial ownership or a right to acquire beneficial ownership of
shares representing a majority of the voting power of the then outstanding
shares of capital stock of the Company.

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

(p)    “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 twelve (12) months as provided in Sections 22(e)(3) and
409A(a)(2)(C)(i) of the Code, and will be determined by the Board on the basis
of such medical evidence as the Board deems warranted under the circumstances.

(q)    “Dissolution” means when the Company has completely wound up its affairs
and dissolved in accordance with the Companies Act 1981 of Bermuda.

(r)    “Effective Date” means September 20, 2018.

(s)    “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.

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

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

(v)    “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 an offering of such
securities, (iv) an Entity Owned, directly or indirectly, by the shareholders 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
(A) is the Owner, directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting power of the
Company’s then outstanding securities) or (B) has the right to appoint directors
entitled to cast a majority of the votes on each matter presented to the Board
(such natural person, Entity or Group described in this prong (v), an “Effective
Date Majority Owner”).

 

20.

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(w)    “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, unless otherwise determined by the Board, the closing sales price for such
stock as quoted on such exchange or market (or the exchange or market with the
greatest volume of trading in the Common Stock) on the date of determination, as
reported in a source the Board deems reliable.

(ii)    Unless otherwise provided by the Board, 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 Board in good faith and in a manner that
complies with Sections 409A and 422 of the Code.

(x)    “Incentive Stock Option” means an option granted pursuant to Section 5 of
the Plan that is intended to be, and that qualifies as, an “incentive stock
option” within the meaning of Section 422 of the Code.

(y)    “IPO Date” means the date and time of execution of the underwriting
agreement between the Company and the underwriter(s) managing the initial public
offering of the Common Stock, pursuant to which the Common Stock is priced for
the initial public offering.

(z)    “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.

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

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

(cc)    “Option” means an Incentive Stock Option or a Nonstatutory Stock Option
to purchase shares of Common Stock granted pursuant to the Plan.

(dd)    “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.

 

21.

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(ee)    “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.

(ff)    “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).

(gg)    “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.

(hh)    “Own,” “Owned,” “Owner,” “Ownership” 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.

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

(jj)    “Plan” means this Immunovant Sciences Ltd. 2018 Equity Incentive Plan,
as amended from time to time.

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

(ll)    “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.

(mm)    “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).

(nn)    “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.

(oo)    “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.

(pp)    “Rule 405” means Rule 405 promulgated under the Securities Act.

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

(rr)    “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.

 

22.

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(ss)    “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.

(tt)    “Subsidiary” means, with respect to the Company, (i) any corporation of
which more than fifty percent (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
fifty percent (50%) .

(uu)    “Ten Percent Shareholder” means a person who Owns (or is deemed to Own
pursuant to Section 424(d) of the Code) shares possessing more than ten percent
(10%) of the total combined voting power of all classes of shares of the Company
or any Affiliate.

(vv)    “Transaction” means a Corporate Transaction or a Change in Control.

 

23.

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IMMUNOVANT SCIENCES LTD.

AMENDED AND RESTATED FORM OF STOCK OPTION GRANT NOTICE

(2018 EQUITY INCENTIVE PLAN)

Immunovant Sciences Ltd. (the “Company”), pursuant to its 2018 Equity Incentive
Plan, as amended from time to time (the “Plan”), previously granted to
Optionholder an option to purchase the number of common shares of the Company
(the “Common Stock”) set forth below on the Date of Grant set forth below. Such
option is subject to all of the terms and conditions as set forth in this
amended and restated stock option grant notice (this “Amended Stock Option Grant
Notice”), in the Amended and Restated Option Agreement attached hereto as
Attachment I, the Plan (as amended and restated as of June 20, 2019 attached
hereto as Attachment II, and the Notice of Exercise attached hereto as
Attachment III, all of which are incorporated herein in their entirety.
Capitalized terms not explicitly defined herein but defined in the Plan or the
Amended and Restated Option Agreement will have the same definitions as in the
Plan or the Amended and Restated Option Agreement. If there is any conflict
between the terms herein and the Plan, the terms of the Plan will control.

 

Optionholder:  

 

Date of Grant:  

 

Vesting Commencement Date:  

 

Number of Shares Subject to Option:  

 

Exercise Price (Per Share):  

 

Total Exercise Price:  

 

Expiration Date:  

 

 

Type of Grant:    ☐  Incentive Stock Option1    ☐  Nonstatutory Stock Option
Exercise Schedule:    ☐  Same as Vesting Schedule    ☐  Early Exercise Permitted
Vesting Schedule:    1/4th of the shares vest one year after the Vesting
Commencement Date; the balance of the shares vest in a series of twelve
(12) successive equal quarterly installments measured from the first anniversary
of the Vesting Commencement Date. Immediately prior to (and contingent upon) a
Change in Control (as defined in the Plan), all shares underlying this Option
shall immediately become fully vested. Payment:    By one or a combination of
the following items (described in the Amended and Restated Option Agreement):   

☐   By cash, check, bank draft, wire transfer or money order payable to the
Company

  

☐   Pursuant to a Regulation T Program if the shares are publicly traded

  

☐   By delivery of already-owned shares if the shares are publicly traded

  

☐   If and only to the extent this Option is a Nonstatutory Stock Option, and
subject to the Company’s consent at the time of exercise, by a “net exercise”
arrangement

 

 

1 

If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock
Options) cannot be first exercisable for more than $100,000 in value (measured
by exercise price) in any calendar year. Any excess over $100,000 is a
Nonstatutory Stock Option.

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Additional Terms/Acknowledgements: Optionholder acknowledges receipt of, and
understands and agrees to, this Amended Stock Option Grant Notice, the Amended
and Restated Option Agreement and the Plan (as amended and restated on June 20,
2019). Optionholder acknowledges and agrees that this Amended Stock Option Grant
Notice and the Amended and Restated Option Agreement may not be modified,
amended or revised except as provided in the Plan. Optionholder further
acknowledges that as of the Date of Grant, this Amended Stock Option Grant
Notice, the Amended and Restated Option Agreement, and the Plan set forth the
entire understanding between Optionholder and the Company regarding this option
award and supersede all prior oral and written agreements, promises and/or
representations on that subject with the exception of (i) Stock Awards
previously granted and delivered to Optionholder, (ii) any compensation recovery
policy that is adopted by the Company or is otherwise required by applicable law
and (iii) any written employment or severance arrangement that would provide for
vesting acceleration of this option upon the
terms and conditions set forth therein.

 

OTHER AGREEMENTS:  

 

 

 

Optionholder further acknowledges, understands, and agrees that effective as of
June 20, 2019, the Immunovant Sciences Ltd. 2018 Equity Incentive Plan, as
amended and restated effective June 20, 2019, together with this Amended Stock
Option Grant Notice and the Amended and Restated Option Agreement shall govern
the option described in the Amended Stock Option Grant Notice (the “Option”),
and Optionholder hereby consents to all amendments to the Plan, the original
Stock Option Grant Notice governing the Option, and the original Stock Option
Agreement governing the Option effectuated pursuant to the Plan (as amended and
restated effective June 20, 2019), the Amended Stock Option Grant Notice, and
the Amended and Restated Option Agreement. Optionholder acknowledges and agrees
that Optionholder has received adequate consideration for such consent,
including the additional option granted to Optionholder as of June 20, 2019.

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By accepting the Option, Optionholder consents to receive all documents
governing the Option by electronic delivery and to participate in the Plan
through an on-line or electronic system established and maintained by the
Company or another third party designated by the Company.

 

IMMUNOVANT SCIENCES LTD.     OPTIONHOLDER: By:  

                                                              

   

 

Signature     Signature Title:  

 

    Date:  

                                                               
                   

Date:  

 

   

ATTACHMENTS: AMENDED AND RESTATED OPTION AGREEMENT, 2018 EQUITY INCENTIVE PLAN,
AS AMENDED AND RESTATED EFFECTIVE JUNE 20, 2019 AND NOTICE OF EXERCISE

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ATTACHMENT I

AMENDED AND RESTATED OPTION AGREEMENT

--------------------------------------------------------------------------------

IMMUNOVANT SCIENCES LTD.

AMENDED AND RESTATED OPTION AGREEMENT

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

The Option Agreement was established effective as of September 20, 2018 and is
hereby amended and restated as of June 20, 2019 (the “Amendment Effective
Date”). This Amended and Restated Option Agreement (this “Amended Option
Agreement”), your Amended and Restated Stock Option Grant Notice (“Amended Stock
Option Grant Notice”), and the Immunovant Sciences Ltd. 2018 Incentive Plan, as
amended and restated as of the Amendment Effective Date, shall govern the terms
of the option granted to you pursuant to the Amended Stock Option Grant Notice.

Pursuant to your Amended Stock Option Grant Notice and this Amended Option
Agreement, Immunovant Sciences Ltd. (the “Company”) has granted you an option
under its 2018 Equity Incentive Plan (the “Plan”) to purchase the number of
common shares of the Company (the “Common Stock”) indicated in your Amended
Stock Option Grant Notice at the exercise price indicated in your Amended Stock
Option Grant Notice. The option is granted to you effective as of the date of
grant set forth in the Amended Stock Option Grant Notice (the “Date of Grant”).
If there is any conflict between the terms in this Amended Option Agreement and
the Plan, the terms of the Plan will control. Capitalized terms not explicitly
defined in this Amended Option Agreement or in the Amended Stock Option Grant
Notice but defined in the Plan will have the same definitions as in the Plan.

The details of your option, in addition to those set forth in the Amended Stock
Option Grant Notice and the Plan, are as follows:

1.    VESTING. Your option will vest as provided in your Amended Stock Option
Grant Notice. Vesting will cease upon the termination of your Continuous
Service.

2.    NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common Stock
subject to your option and your exercise price per share in your Amended Stock
Option Grant Notice will be adjusted for Capitalization Adjustments.

3.    EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES. If you are an Employee
eligible for overtime compensation under the Fair Labor Standards Act of 1938,
as amended (that is, a “Non-Exempt Employee”), and except as otherwise provided
in the Plan, you may not exercise your option until you have completed at least
six (6) months of Continuous Service measured from the Date of Grant, even if
you have already been an employee for more than six (6) months. Consistent with
the provisions of the Worker Economic Opportunity Act, you may exercise your
option as to any vested portion prior to such six (6) month anniversary in the
case of (i) your death or Disability, (ii) a Corporate Transaction in which your
option is not assumed, continued or substituted, (iii) a Change in Control or
(iv) your termination of Continuous Service on your “retirement” (as defined in
the Company’s benefit plans).

 

I-1

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4.    EXERCISE PRIOR TO VESTING (“EARLY EXERCISE”). If permitted in your Amended
Stock Option Grant Notice (i.e., the “Exercise Schedule” indicates “Early
Exercise Permitted”) and subject to the provisions of your option, you may elect
at any time that is both (i) during the period of your Continuous Service and
(ii) during the term of your option, to exercise all or part of your option,
including the unvested portion of your option; provided, however, that:

(a)    a partial exercise of your option will be deemed to cover first vested
shares of Common Stock and then the earliest vesting installment of unvested
shares of Common Stock;

(b)    any shares of Common Stock so purchased from installments that have not
vested as of the date of exercise will be subject to the purchase option in
favor of the Company as described in the Company’s form of Early Exercise Stock
Purchase Agreement;

(c)    you will enter into the Company’s form of Early Exercise Stock Purchase
Agreement with a vesting schedule that will result in the same vesting as if no
early exercise had occurred; and

(d)    if your option is an Incentive Stock Option, then, to the extent that the
aggregate Fair Market Value (determined at the Date of Grant) of the shares of
Common Stock with respect to which your option plus all other Incentive Stock
Options you hold are exercisable for the first time by you during any calendar
year (under all plans of the Company and its Affiliates) exceeds $100,000, your
option(s) or portions thereof that exceed such limit (according to the order in
which they were granted) will be treated as Nonstatutory Stock Options.

5.    METHOD OF PAYMENT. You must pay the full amount of the exercise price for
the shares you wish to exercise. You may pay the exercise price in cash or by
check, bank draft, wire transfer or money order payable to the Company or in any
other manner permitted by your Amended Stock Option Grant Notice, which may
include one or more of the following:

(a)    Provided that at the time of exercise the Common Stock is publicly
traded, pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of Common Stock, 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. This manner of payment is also known as a “broker-assisted
exercise”, “same day sale”, or “sell to cover”.

(b)    Provided that at the time of exercise the Common Stock is publicly
traded, by delivery to the Company (either by actual delivery or attestation) of
already-owned shares of Common Stock that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market
Value on the date of exercise. “Delivery” for these purposes, in the sole
discretion of the Company at the time you exercise your option, will include
delivery to the Company of your attestation of ownership of such shares of
Common Stock in a form approved by the Company. You may not exercise your option
by delivery to the Company of Common Stock if doing so would violate the
provisions of any law, regulation or agreement restricting the redemption of the
Company’s stock.

 

I-2

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6.    WHOLE SHARES. You may exercise your option only for whole shares of Common
Stock.

7.    SECURITIES LAW COMPLIANCE. In no event may you exercise your option unless
the shares of Common Stock issuable upon exercise are then registered under the
Securities Act or, if not registered, the Company has determined that your
exercise and the issuance of the shares would be exempt from the registration
requirements of the Securities Act. The exercise of your option also must comply
with all other applicable laws and regulations governing your option, and you
may not exercise your option if the Company determines that such exercise would
not be in material compliance with such laws and regulations (including any
restrictions on exercise required for compliance with Treas. Reg. 1.401(k)- 1
(d)(3), if applicable).

8.    TERM. You may not exercise your option before the Date of Grant or after
the expiration of the option’s term. The term of your option expires, subject to
the provisions of Section 5(h) of the Plan, upon the earliest of the following:

(a)    If an IPO Date has not occurred as of the date on which your Continuous
Service ceases, then subject to Section 8(c) below, the term of your option
shall expire upon the earliest of the following:

(i)    immediately upon the termination of your Continuous Service for Cause;

(ii)    the Expiration Date indicated in your Amended Stock Option Grant Notice;
and

(iii)    the day before the tenth (1 0th) anniversary of the Date of Grant.

(b)    If an IPO Date has occurred as of the date on which your Continuous
Service ceases, then the term of your option shall expire upon the earliest of
the following:

(i)    immediately upon the termination of your Continuous Service for Cause;

(ii)    three (3) months after the termination of your Continuous Service for
any reason other than Cause, your Disability, or your death (except as otherwise
provided in Section 8(b)(iv) below); provided, however, that if during any part
of such three-month period your option is not exercisable solely because of the
condition set forth in the section above relating to “Securities Law
Compliance,” your option will not expire until the earlier of the Expiration
Date or until it has been exercisable for an aggregate period of three
(3) months after the termination of your Continuous Service; provided further,
if during any part of such three (3) month period, the sale of any Common Shares
received upon exercise of your option would violate the Company’s insider
trading policy, then your option will not expire until the earlier of the
Expiration Date or until it has been exercisable for an aggregate period of
three (3) months after the termination of your Continuous Service during which
the sale of any Common Shares received upon exercise of your option would not be
in violation of the Company’s insider trading policy. Notwithstanding the
foregoing, if (A) you are a Non-Exempt Employee, (B) your Continuous Service
terminates within six (6) months after the Date of Grant, and (C) you have
vested in a portion of your option

 

I-3

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at the time of your termination of Continuous Service, your option will not
expire until the earlier of (x) the later of (I) the date that is seven
(7) months after the Date of Grant, and (II) the date that is three (3) months
after the termination of your Continuous Service, and (y) the Expiration Date;

(iii)    twelve (12) months after the termination of your Continuous Service due
to your Disability (except as otherwise provided in Section 8(b)(iv) below);

(iv)    eighteen (18) months after your death if you die either during your
Continuous Service or within three (3) months after your Continuous Service
terminates for any reason other than Cause;

(v)    the Expiration Date indicated in your Amended Stock Option Grant Notice;
and

(vi)    the day before the tenth (10th) anniversary of the Date of Grant.

(c)    If an IPO Date occurs following the date on which your Continuous Service
ceases and prior to the date on which your option would expire pursuant to
Section 8(a), then your option shall expire on the earlier of the date set forth
in Section 8(a) or the date that is one hundred and eighty-five (185) days
following the IPO Date; provided, however, that if during any part of such one
hundred and eighty-five (185) day period your option is not exercisable solely
because of the condition set forth in the section above relating to “Securities
Law Compliance,” your option will not expire until the earlier of the Expiration
Date or until it has been exercisable for an aggregate period of one hundred and
eighty-five (185) days after the IPO Date; provided further, if during any part
of such one hundred and eighty-five (185) day period, the sale of any Common
Shares received upon exercise of your option would violate the Company’s insider
trading policy, then your option will not expire until the earlier of the
Expiration Date or until it has been exercisable for an aggregate period of one
hundred and eighty-five (185) days after the IPO Date during which the sale of
any Common Shares received upon exercise of your option would not be in
violation of the Company’s insider trading policy.

(d)    If your option is an Incentive Stock Option, note that to obtain the
federal income tax advantages associated with an Incentive Stock Option, the
Code requires that at all times beginning on the Date of Grant and ending on the
day three (3) months before the date of your option’s exercise, you must be an
employee of the Company or an Affiliate, except in the event of your death or
Disability. The Company has provided for extended exercisability of your option
under certain circumstances for your benefit but cannot guarantee that your
option will necessarily be treated as an Incentive Stock Option if you continue
to provide services to the Company or an Affiliate as a Consultant or Director
after your employment terminates or if you otherwise exercise your option more
than three (3) months after the date your employment with the Company or an
Affiliate terminates.

9.    EXERCISE.

(a)    You may exercise the vested portion of your option (and the unvested
portion of your option if your Amended Stock Option Grant Notice so permits)
during its term by

 

I-4

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(i) delivering a Notice of Exercise (in a form designated by the Company) or
completing such other documents and/or procedures designated by the Company for
exercise and (ii) paying the exercise price and any applicable withholding taxes
to the Company’s Secretary, stock plan administrator, or such other person as
the Company may designate, together with such additional documents as the
Company may then require.

(b)    Your option and the obligation of the Company to sell and deliver shares
of Common Stock hereunder upon exercise of your option shall be subject in all
respects to (i) all applicable federal and state laws, rules and regulations,
(ii) any regulation, qualification, approvals or other requirements imposed by
any government or regulatory agency or body which the Board shall, in its sole
discretion, determine to be necessary or applicable and (iii) the terms of any
Shareholders Agreement entered into by and among the Company and each of the
shareholders of the Company that is a party thereto, as may be amended from time
to time (the “Shareholders Agreement”). Moreover, your option may not be
exercised if its exercise, or the receipt of shares of Common Stock pursuant
thereto, would be contrary to applicable law. All shares received upon any
exercise of your option shall be held subject to all of the terms and conditions
of the Shareholders Agreement. By signing this letter, you agree to execute and
become a party to the Shareholders Agreement as a condition to the grant of the
option and be subject to the rights and obligations thereunder, and the Company
may require you to execute a joinder to the Shareholders Agreement in connection
with the exercise of your option.

(c)    By exercising your option you agree that, as a condition to any exercise
of your option, the Company may require you to enter into an arrangement
providing for the payment by you to the Company of any tax withholding
obligation of the Company arising by reason of (i) the exercise of your option,
or (ii) the disposition of shares of Common Stock acquired upon such exercise.

(d)    If your option is an Incentive Stock Option, by exercising your option
you agree that you will notify the Company in writing within fifteen (15) days
after the date of any disposition of any of the shares of Common Stock issued
upon exercise of your option that occurs within two (2) years after the Date of
Grant or within one (1) year after such shares of Common Stock are transferred
upon exercise of your option.

(e)    By exercising your option you agree that you will not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter
into any hedging or similar transaction with the same economic effect as a sale
with respect to any shares of Common Stock or other securities of the Company
held by you, for a period of one hundred eighty (180) days following the
effective date of a registration statement of the Company filed under the
Securities Act or such longer period as the underwriters or the Company will
request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or
any successor or similar rules or regulation (the “Lock-Up Period”); provided,
however, that nothing contained in this section will prevent the exercise of a
repurchase option, if any, in favor of the Company during the Lock-Up Period.
You further agree to execute and deliver such other agreements as may be
reasonably requested by the Company or the underwriters that are consistent with
the foregoing or that are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to your shares of Common Stock until the end of such
period. You also agree that any transferee of any shares of Common Stock (or
other securities) of the

 

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Company held by you will be bound by this Section 9(e). The underwriters of the
Company’s stock are intended third party beneficiaries of this Section 9(e) and
will have the right, power and authority to enforce the provisions hereof as
though they were a party hereto.

10.    TRANSFERABILITY. Except as otherwise provided in this Section 10, your
option is not transferable, except by will or by the laws of descent and
distribution, and is exercisable during your life only by you.

(a)    Certain Trusts. Upon receiving written permission from the Board or its
duly authorized designee, you may transfer your option to a trust if you are
considered to be the sole beneficial owner (determined under Section 671 of the
Code and applicable state law) while the option is held in the trust. You and
the trustee must enter into transfer and other agreements required by the
Company.

(b)    Domestic Relations Orders. Upon receiving written permission from the
Board or its duly authorized designee, and provided that you and the designated
transferee enter into transfer and other agreements required by the Company, you
may transfer your option pursuant to the terms of a domestic relations order,
official marital settlement agreement or other divorce or separation instrument
as permitted by Treasury Regulation 1.421-1(b)(2) that contains the information
required by the Company to effectuate the transfer. You are encouraged to
discuss the proposed terms of any division of this option with the Company prior
to finalizing the domestic relations order or marital settlement agreement to
help ensure the required information is contained within the domestic relations
order or marital settlement agreement. If this option is an Incentive Stock
Option, this option may be deemed to be a Nonstatutory Stock Option as a result
of such transfer.

(c)    Beneficiary Designation. Upon receiving written permission from the Board
or its duly authorized designee, you may, by delivering written notice to the
Company, in a form approved by the Company and any broker designated by the
Company to handle option exercises, designate a third party who, on your death,
will thereafter be entitled to exercise this option and receive the Common Stock
or other consideration resulting from such exercise. In the absence of such a
designation, your executor or administrator of your estate will be entitled to
exercise this option and receive, on behalf of your estate, the Common Stock or
other consideration resulting from such exercise.

11.    RIGHT OF REPURCHASE. The Company will have the right to repurchase all of
the shares of Common Stock you acquire pursuant to the exercise of your option
upon termination of your Continuous Service for Cause. Such repurchase will be
at the exercise price you paid to acquire the shares and will be effected
pursuant to such other terms and conditions, and at such time, as the Company
shall determine.

12.    OPTION NOT A SERVICE CONTRACT. Your option is not an employment or
service contract, and nothing in your option will be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company
or an Affiliate, or of the Company or an Affiliate to continue your employment.
In addition, nothing in your option will obligate the Company or an Affiliate,
their respective stockholders, boards of directors, officers or employees

 

I-6

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to continue any relationship that you might have as a Director or Consultant for
the Company or an Affiliate.

13.    WITHHOLDING OBLIGATIONS.

(a)    At the time you exercise your option, in whole or in part, and at any
time thereafter as requested by the Company, you hereby authorize withholding
from payroll and any other amounts payable to you, and otherwise agree to make
adequate provision for (including by means of a “same day sale” pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or
an Affiliate, if any, which arise in connection with the exercise of your
option.

(b)    If this option is a Nonstatutory Stock Option, then upon your request and
subject to approval by the Company, and compliance with any applicable legal
conditions or restrictions, the Company may withhold from fully vested shares of
Common Stock otherwise issuable to you upon the exercise of your option a number
of whole shares of Common Stock having a Fair Market Value, determined by the
Company as of the date of exercise, not in excess of the minimum amount of tax
required to be withheld by law (or such lower amount as may be necessary to
avoid classification of your option as a liability for financial accounting
purposes). Any adverse consequences to you arising in connection with such share
withholding procedure shall be your sole responsibility.

(c)    You may not exercise your option unless the tax withholding obligations
of the Company and/or any Affiliate are satisfied. Accordingly, you may not be
able to exercise your option when desired even though your option is vested, and
the Company will have no obligation to issue a certificate for such shares of
Common Stock or release such shares of Common Stock from any escrow provided for
herein, if applicable, unless such obligations are satisfied.

14.    TAX CONSEQUENCES. You hereby agree that the Company does not have a duty
to design or administer the Plan or its other compensation programs in a manner
that minimizes your tax liabilities. You will not make any claim against the
Company, or any of its Officers, Directors, Employees or Affiliates related to
tax liabilities arising from your option or your other compensation. In
particular, you acknowledge that this option is exempt from Section 409A of the
Code only if the exercise price per share specified in the Amended Stock Option
Grant Notice is at least equal to the “fair market value” per share of Common
Stock on the Date of Grant and there is no other impermissible deferral of
compensation associated with the option. Because the Common Stock is not traded
on an established securities market, the Fair Market Value is determined by the
Board, perhaps in consultation with an independent valuation firm retained by
the Company. You acknowledge that there is no guarantee that the Internal
Revenue Service will agree with the valuation as determined by the Board, and
you will not make any claim against the Company, or any of its Officers,
Directors, Employees or Affiliates in the event that the Internal Revenue
Service asserts that the valuation determined by the Board is less than the
“fair market value” as subsequently determined by the Internal Revenue Service.

15.    NOTICES. Any notices provided for in your option or the Plan will be
given in writing (including electronically) and will be deemed effectively given
upon receipt or, in the case

 

I-7

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of notices delivered by mail by the Company to you, five (5) days after deposit
in the United States mail, postage prepaid, addressed to you at the last address
you provided to the Company. The Company may, in its sole discretion, decide to
deliver any documents related to participation in the Plan and this option by
electronic means or to request your consent to participate in the Plan by
electronic means. By accepting this option, you consent to receive such
documents by electronic delivery and to participate in the Plan through an
on-line or electronic system established and maintained by the Company or
another third party designated by the Company.

 

I-8

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ATTACHMENT II

2018 EQUITY INCENTIVE PLAN

--------------------------------------------------------------------------------

ATTACHMENT III

NOTICE OF EXERCISE

--------------------------------------------------------------------------------

NOTICE OF EXERCISE

IMMUNOVANT SCIENCES LTD.

CLARENDON HOUSE

2 CHURCH STREET

HAMILTON HM 11

BERMUDA

Date of Exercise:                     

This constitutes notice to Immunovant Sciences Ltd. (the “Company”) under my
stock option that I elect to purchase the below number of common shares of the
Company (the “Shares”) for the exercise price set forth below.

 

Type of option (check one):    Incentive  ☐      Nonstatutory  ☐  

Stock option dated:

        

 

 

    

 

 

 

Number of Shares as to which option is exercised:

        

 

 

    

 

 

 

Certificates to be issued in name of:

        

 

 

    

 

 

 

Total exercise price:

   $                    $                   

 

 

    

 

 

 

Cash payment delivered herewith:

   $        $       

 

 

    

 

 

 

Regulation T Program (cashless exercise2):

   $        $       

 

 

    

 

 

 

Value of                  Shares delivered herewith3:

   $        $       

 

 

    

 

 

 

By this exercise, I agree (i) to provide such additional documents as you may
require pursuant to the terms of the Immunovant Sciences Ltd. 2018 Equity
Incentive Plan, including without limitation, a joinder to the Shareholders
Agreement (ii) to provide for the payment by me to you (in the manner designated
by you) of your withholding obligation, if any, relating to the exercise of this
option, and (iii) if this exercise relates to an incentive stock option, to
notify you in writing within fifteen (15) days after the date of any disposition
of any of the Shares issued upon exercise of this option that occurs within two
(2)

 

2 

Shares must meet the public trading requirements set forth in the option
agreement.

3 

Shares must meet the public trading requirements set forth in the option. Shares
must be valued in accordance with the terms of the option being exercised, and
must be owned free and clear of any liens, claims, encumbrances or security
interests. Certificates must be endorsed or accompanied by an executed
assignment separate from certificate.

 

III-1

--------------------------------------------------------------------------------

years after the date of grant of this option or within one (1) year after such
Shares are issued upon exercise of this option.

I hereby make the following certifications and representations with respect to
the number of Shares listed above, which are being acquired by me for my own
account upon exercise of the option as set forth above:

I acknowledge that the Shares have not been registered under the Securities Act
of 1933, as amended (the “Securities Act”), and are deemed to constitute
“restricted securities” under Rule 701 and Rule 144 promulgated under the
Securities Act. I warrant and represent to the Company that I have no present
intention of distributing or selling said Shares, except as permitted under the
Securities Act and any applicable state securities laws.

I further acknowledge that I will not be able to resell the Shares for at least
ninety (90) days after the common shares of the Company becomes publicly traded
(i.e., subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934) under Rule 701 and that more restrictive
conditions apply to affiliates of the Company under Rule 144.

I further acknowledge that all certificates representing any of the Shares
subject to the provisions of the option shall have endorsed thereon appropriate
legends reflecting the foregoing limitations, as well as any legends reflecting
restrictions pursuant to the Company’s Memorandum of Association, Bye-laws
and/or applicable securities laws.

I further agree that, if required by the Company (or a representative of the
underwriters) in connection with the first underwritten registration of the
offering of any securities of the Company under the Securities Act, I will not
sell, dispose of, transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction with the same
economic effect as a sale with respect to any common shares or other securities
of the Company for a period of one hundred eighty (180) days following the
effective date of a registration statement of the Company filed under the
Securities Act (or such longer period as the underwriters or the Company shall
request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or
any successor or similar rule or regulation) (the “Lock-Up Period”). I further
agree to execute and deliver such other agreements as may be reasonably
requested by the Company or the underwriters that are consistent with the
foregoing or that are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with
respect to securities subject to the foregoing restrictions until the end of such period.

 

Very truly yours,

 

Signature

 

Print Name

 

III-2

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IMMUNOVANT SCIENCES LTD.

FORM OF STOCK OPTION GRANT NOTICE

(2018 EQUITY INCENTIVE PLAN)

(GRANTS MADE ON OR AFTER JUNE 20, 2019)

Immunovant Sciences Ltd. (the “Company”), pursuant to its 2018 Equity Incentive
Plan, as amended from time to time (the “Plan”), hereby grants to Optionholder
an option to purchase the number of common shares of the Company (the “Common
Stock”) set forth below. This option is subject to all of the terms and
conditions as set forth in this stock option grant notice (this “Stock Option
Grant Notice”), in the Option Agreement attached hereto as Attachment I (the
“Option Agreement”), the Plan (as amended and restated as of June 20, 2019
attached hereto as Attachment II, and the Notice of Exercise attached hereto as
Attachment III, all of which are incorporated herein in their entirety.
Capitalized terms not explicitly defined herein but defined in the Plan or the
Option Agreement will have the same definitions as in the Plan or the Option
Agreement. If there is any conflict between the terms herein and the Plan, the
terms of the Plan will control.

 

Optionholder:

  

 

Date of Grant:

  

 

Vesting Commencement Date:

  

 

Number of Shares Subject to Option:

  

 

Exercise Price (Per Share):

  

 

Total Exercise Price:

  

 

Expiration Date:

  

 

 

Type of Grant:    ☐  Incentive Stock Option1    ☐  Nonstatutory Stock Option
Exercise Schedule:    ☐  Same as Vesting Schedule    ☐  Early Exercise Permitted
Vesting Schedule:    1/4th of the shares vest one year after the Vesting
Commencement Date; the balance of the shares vest in a series of twelve
(12) successive equal quarterly installments measured from the first anniversary
of the Vesting Commencement Date. Immediately prior to (and contingent upon) a
Change in Control (as defined in the Plan), all shares underlying this Option
shall immediately become fully vested. Payment:    By one or a combination of
the following items (described in the Option Agreement):   

☐   By cash, check, bank draft, wire transfer or money order payable to the
Company

  

☐   Pursuant to a Regulation T Program if the shares are publicly traded

  

☐   By delivery of already-owned shares if the shares are publicly traded

  

☐   If and only to the extent this Option is a Nonstatutory Stock Option, and
subject to the Company’s consent at the time of exercise, by a “net exercise”
arrangement

 

 

1 

If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock
Options) cannot be first exercisable for more than $100,000 in value (measured
by exercise price) in any calendar year. Any excess over $100,000 is a
Nonstatutory Stock Option.

--------------------------------------------------------------------------------

Additional Terms/Acknowledgements: Optionholder acknowledges receipt of, and
understands and agrees to, this Stock Option Grant Notice, the Option Agreement
and the Plan (as amended and restated on June 20, 2019). Optionholder
acknowledges and agrees that this Stock Option Grant Notice and the Option
Agreement may not be modified, amended or revised except as provided in the
Plan. Optionholder further acknowledges that as of the Date of Grant, this Stock
Option Grant Notice, the Option Agreement, and the Plan set forth the entire
understanding between Optionholder and the Company regarding this option award
and supersede all prior oral and written agreements, promises and/or
representations on that subject with the exception of (i) Stock Awards
previously granted and delivered to Optionholder, (ii) any compensation recovery
policy that is adopted by the Company or is otherwise required by applicable law
and (iii) any written employment or severance arrangement that would provide for
vesting acceleration of this option
upon the terms and conditions set forth therein.

 

OTHER AGREEMENTS:  

 

 

 

--------------------------------------------------------------------------------

By accepting the Option, Optionholder consents to receive all documents
governing the Option by electronic delivery and to participate in the Plan
through an on-line or electronic system established and maintained by the
Company or another third party designated by the Company.

 

IMMUNOVANT SCIENCES LTD.     OPTIONHOLDER: By:  

 

   

 

  Signature       Signature Title:  

 

    Date:  

 

Date:  

 

     

ATTACHMENTS: OPTION AGREEMENT, 2018 EQUITY INCENTIVE PLAN, AS AMENDED AND
RESTATED EFFECTIVE JUNE 20, 2019 AND NOTICE OF EXERCISE

--------------------------------------------------------------------------------

ATTACHMENT I

OPTION AGREEMENT

--------------------------------------------------------------------------------

IMMUNOVANT SCIENCES LTD.

OPTION AGREEMENT

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

(GRANTS MADE ON OR AFTER JUNE 20, 2019)

Pursuant to your Stock Option Grant Notice (“Stock Option Grant Notice”) and
this Option Agreement (this “Option Agreement”), Immunovant Sciences Ltd. (the
“Company”) has granted you an option under its 2018 Equity Incentive Plan (the
“Plan”) to purchase the number of common shares of the Company (the “Common
Stock”) indicated in your Stock Option Grant Notice at the exercise price
indicated in your Stock Option Grant Notice. The option is granted to you
effective as of the date of grant set forth in the Stock Option Grant Notice
(the “Date of Grant”). If there is any conflict between the terms in this Option
Agreement and the Plan, the terms of the Plan will control. Capitalized terms
not explicitly defined in this Option Agreement or in the Stock Option Grant
Notice but defined in the Plan will have the same definitions as in the Plan.

The details of your option, in addition to those set forth in the Stock Option
Grant Notice and the Plan, are as follows:

1.    VESTING. Your option will vest as provided in your Stock Option Grant
Notice. Vesting will cease upon the termination of your Continuous Service.

2.    NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common Stock
subject to your option and your exercise price per share in your Stock Option
Grant Notice will be adjusted for Capitalization Adjustments.

3.    EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES. If you are an Employee
eligible for overtime compensation under the Fair Labor Standards Act of 1938,
as amended (that is, a “Non-Exempt Employee”), and except as otherwise provided
in the Plan, you may not exercise your option until you have completed at least
six (6) months of Continuous Service measured from the Date of Grant, even if
you have already been an employee for more than six (6) months. Consistent with
the provisions of the Worker Economic Opportunity Act, you may exercise your
option as to any vested portion prior to such six (6) month anniversary in the
case of (i) your death or Disability, (ii) a Corporate Transaction in which your
option is not assumed, continued or substituted, (iii) a Change in Control or
(iv) your termination of Continuous Service on your “retirement” (as defined in
the Company’s benefit plans).

4.    EXERCISE PRIOR TO VESTING (“EARLY EXERCISE”). If permitted in your Stock
Option Grant Notice (i.e., the “Exercise Schedule” indicates “Early Exercise
Permitted”) and subject to the provisions of your option, you may elect at any
time that is both (i) during the period of your Continuous Service and
(ii) during the term of your option, to exercise all or part of your option,
including the unvested portion of your option; provided, however, that:

(a)    a partial exercise of your option will be deemed to cover first vested
shares of Common Stock and then the earliest vesting installment of unvested
shares of Common Stock;

 

I-1

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(b)    any shares of Common Stock so purchased from installments that have not
vested as of the date of exercise will be subject to the purchase option in
favor of the Company as described in the Company’s form of Early Exercise Stock
Purchase Agreement;

(c)    you will enter into the Company’s form of Early Exercise Stock Purchase
Agreement with a vesting schedule that will result in the same vesting as if no
early exercise had occurred; and

(d)    if your option is an Incentive Stock Option, then, to the extent that the
aggregate Fair Market Value (determined at the Date of Grant) of the shares of
Common Stock with respect to which your option plus all other Incentive Stock
Options you hold are exercisable for the first time by you during any calendar
year (under all plans of the Company and its Affiliates) exceeds $100,000, your
option(s) or portions thereof that exceed such limit (according to the order in
which they were granted) will be treated as Nonstatutory Stock Options.

5.    METHOD OF PAYMENT. You must pay the full amount of the exercise price for
the shares you wish to exercise. You may pay the exercise price in cash or by
check, bank draft, wire transfer or money order payable to the Company or in any
other manner permitted by your Stock Option Grant Notice, which may include one
or more of the following:

(a)    Provided that at the time of exercise the Common Stock is publicly
traded, pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of Common Stock, 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. This manner of payment is also known as a “broker-assisted
exercise”, “same day sale”, or “sell to cover”.

(b)    Provided that at the time of exercise the Common Stock is publicly
traded, by delivery to the Company (either by actual delivery or attestation) of
already-owned shares of Common Stock that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market
Value on the date of exercise. “Delivery” for these purposes, in the sole
discretion of the Company at the time you exercise your option, will include
delivery to the Company of your attestation of ownership of such shares of
Common Stock in a form approved by the Company. You may not exercise your option
by delivery to the Company of Common Stock if doing so would violate the
provisions of any law, regulation or agreement restricting the redemption of the
Company’s stock.

6.    WHOLE SHARES. You may exercise your option only for whole shares of Common
Stock.

7.    SECURITIES LAW COMPLIANCE. In no event may you exercise your option unless
the shares of Common Stock issuable upon exercise are then registered under the
Securities Act or, if not registered, the Company has determined that your
exercise and the issuance of the shares would be exempt from the registration
requirements of the Securities Act. The exercise of your option also must comply
with all other applicable laws and regulations governing your option, and you
may not exercise your option if the Company determines that such exercise would
not be in

 

I-2

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material compliance with such laws and regulations (including any restrictions
on exercise required for compliance with Treas. Reg. 1.401(k)-1(d)(3), if
applicable).

8.    TERM. You may not exercise your option before the Date of Grant or after
the expiration of the option’s term. The term of your option expires, subject to
the provisions of Section 5(h) of the Plan, upon the earliest of the following:

(a)    If an IPO Date has not occurred as of the date on which your Continuous
Service ceases, then subject to Section 8(c) below, the term of your option
shall expire upon the earliest of the following:

(i)    immediately upon the termination of your Continuous Service for Cause;

(ii)    the Expiration Date indicated in your Stock Option Grant Notice;

(iii)    the day before the tenth (10th) anniversary of the Date of Grant.

(b)    If an IPO Date has occurred as of the date on which your Continuous
Service ceases, then the term of your option shall expire upon the earliest of
the following:

(i)    immediately upon the termination of your Continuous Service for Cause

(ii)    

[five (5) years after the termination of your Continuous Service for any reason
other than Cause]2

[three (3) months after the termination of your Continuous Service for any
reason other than Cause, your Disability, or your death; provided, however, that
if during any part of such three-month period your option is not exercisable
solely because of the condition set forth in the section above relating to
“Securities Law Compliance,” your option will not expire until the earlier of
the Expiration Date or until it has been exercisable for an aggregate period of
three (3) months after the termination of your Continuous Service; provided
further, if during any part of such three (3) month period, the sale of any
Common Shares received upon exercise of your option would violate the Company’s
insider trading policy, then your option will not expire until the earlier of
the Expiration Date or until it has been exercisable for an aggregate period of
three (3) months after the termination of your Continuous Service during which
the sale of any Common Shares received upon exercise of your option would not be
in violation of the Company’s insider trading policy. Notwithstanding the
foregoing, if (A) you are a Non-Exempt Employee, (B) your Continuous Service
terminates within six (6) months after the Date of Grant, and

 

2 

Note to Draft: Include for grants to non-employee members of the board of
directors.

 

I-3

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(C) you have vested in a portion of your option at the time of your termination
of Continuous Service, your option will not expire until the earlier of (x) the
later of (I) the date that is seven (7) months after the Date of Grant, and
(II) the date that is three (3) months after the termination of your Continuous
Service, and (y) the Expiration Date;]3

(iii)    twelve (12) months after the termination of your Continuous Service due
to your Disability (except as otherwise provided in Section 8(b)(iv) below);

(iv)    (iv) eighteen (18) months after your death if you die either during your
Continuous Service or within three (3) months after your Continuous Service
terminates for any reason other than Cause;

(v)    the Expiration Date indicated in your Stock Option Grant Notice; and

(vi)    the day before the tenth (10th) anniversary of the Date of Grant.

(c)    [If an IPO Date occurs following the date on which your Continuous
Service ceases and prior to the date on which your option would expire pursuant
to Section 8(a), then your option shall expire on the earlier of the date set
forth in Section 8(a) or the date that is one hundred and eighty-five (185) days
following the IPO Date; provided, however, that if during any part of such one
hundred and eighty-five (185) day period your option is not exercisable solely
because of the condition set forth in the section above relating to “Securities
Law Compliance,” your option will not expire until the earlier of the Expiration
Date or until it has been exercisable for an aggregate period of one hundred and
eighty-five (185) days after the IPO Date; provided further, if during any part
of such one hundred and eighty-five (185) day period, the sale of any Common
Shares received upon exercise of your option would violate the Company’s insider
trading policy, then your option will not expire until the earlier of the
Expiration Date or until it has been exercisable for an aggregate period of one
hundred and eighty-five (185) days after the IPO Date during which the sale of
any Common Shares received upon exercise of your option would not be in
violation of the Company’s insider trading policy.4]

(d)    If your option is an Incentive Stock Option, note that to obtain the
federal income tax advantages associated with an Incentive Stock Option, the
Code requires that at all times beginning on the Date of Grant and ending on the
day three (3) months before the date of your option’s exercise, you must be an
employee of the Company or an Affiliate, except in the event of your death or
Disability. The Company has provided for extended exercisability of your option
under certain circumstances for your benefit but cannot guarantee that your
option will necessarily be treated as an Incentive Stock Option if you continue
to provide services to the Company or an Affiliate as a Consultant or Director
after your employment terminates or if you otherwise exercise your option more
than three (3) months after the date your employment with the Company or an
Affiliate terminates.

 

 

3 

Note to Draft: Include for grants to officers and employees.

4 

Note to Draft: Include for grants to officers and employees.

 

I-4

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9.    EXERCISE.

(a)    You may exercise the vested portion of your option (and the unvested
portion of your option if your Stock Option Grant Notice so permits) during its
term by (i) delivering a Notice of Exercise (in a form designated by the
Company) or completing such other documents and/or procedures designated by the
Company for exercise and (ii) paying the exercise price and any applicable
withholding taxes to the Company’s Secretary, stock plan administrator, or such
other person as the Company may designate, together with such additional
documents as the Company may then require.

(b)    Your option and the obligation of the Company to sell and deliver shares
of Common Stock hereunder upon exercise of your option shall be subject in all
respects to (i) all applicable federal and state laws, rules and regulations,
(ii) any regulation, qualification, approvals or other requirements imposed by
any government or regulatory agency or body which the Board shall, in its sole
discretion, determine to be necessary or applicable and (iii) the terms of any
Shareholders Agreement entered into by and among the Company and each of the
shareholders of the Company that is a party thereto, as may be amended from time
to time (the “Shareholders Agreement”). Moreover, your option may not be
exercised if its exercise, or the receipt of shares of Common Stock pursuant
thereto, would be contrary to applicable law. All shares received upon any
exercise of your option shall be held subject to all of the terms and conditions
of the Shareholders Agreement. By signing this letter, you agree to execute and
become a party to the Shareholders Agreement as a condition to the grant of the
option and be subject to the rights and obligations thereunder, and the Company
may require you to execute a joinder to the Shareholders Agreement in connection
with the exercise of your option.

(c)    By exercising your option you agree that, as a condition to any exercise
of your option, the Company may require you to enter into an arrangement
providing for the payment by you to the Company of any tax withholding
obligation of the Company arising by reason of (i) the exercise of your option,
or (ii) the disposition of shares of Common Stock acquired upon such exercise.

(d)    If your option is an Incentive Stock Option, by exercising your option
you agree that you will notify the Company in writing within fifteen (15) days
after the date of any disposition of any of the shares of Common Stock issued
upon exercise of your option that occurs within two (2) years after the Date of
Grant or within one (1) year after such shares of Common Stock are transferred
upon exercise of your option.

(e)    By exercising your option you agree that you will not sell, dispose of,
transfer, make any short sale of, grant any option for the purchase of, or enter
into any hedging or similar transaction with the same economic effect as a sale
with respect to any shares of Common Stock or other securities of the Company
held by you, for a period of one hundred eighty (180) days following the
effective date of a registration statement of the Company filed under the
Securities Act or such longer period as the underwriters or the Company will
request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or
any successor or similar rules or regulation (the “Lock-Up Period”); provided,
however, that nothing contained in this section will prevent the exercise of a
repurchase option, if any, in favor of the Company during the Lock-Up Period.
You further agree to execute and deliver such other agreements as may be
reasonably requested by the

 

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Company or the underwriters that are consistent with the foregoing or that are
necessary to give further effect thereto. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to your
shares of Common Stock until the end of such period. You also agree that any
transferee of any shares of Common Stock (or other securities) of the Company
held by you will be bound by this Section 9(d). The underwriters of the
Company’s stock are intended third party beneficiaries of this Section 9(d) and
will have the right, power and authority to enforce the provisions hereof as
though they were a party hereto.

10.    TRANSFERABILITY. Except as otherwise provided in this Section 10, your
option is not transferable, except by will or by the laws of descent and
distribution, and is exercisable during your life only by you.

(a)    Certain Trusts. Upon receiving written permission from the Board or its
duly authorized designee, you may transfer your option to a trust if you are
considered to be the sole beneficial owner (determined under Section 671 of the
Code and applicable state law) while the option is held in the trust. You and
the trustee must enter into transfer and other agreements required by the
Company.

(b)    Domestic Relations Orders. Upon receiving written permission from the
Board or its duly authorized designee, and provided that you and the designated
transferee enter into transfer and other agreements required by the Company, you
may transfer your option pursuant to the terms of a domestic relations order,
official marital settlement agreement or other divorce or separation instrument
as permitted by Treasury Regulation 1.421-1(b)(2) that contains the information
required by the Company to effectuate the transfer. You are encouraged to
discuss the proposed terms of any division of this option with the Company prior
to finalizing the domestic relations order or marital settlement agreement to
help ensure the required information is contained within the domestic relations
order or marital settlement agreement. If this option is an Incentive Stock
Option, this option may be deemed to be a Nonstatutory Stock Option as a result
of such transfer.

(c)    Beneficiary Designation. Upon receiving written permission from the Board
or its duly authorized designee, you may, by delivering written notice to the
Company, in a form approved by the Company and any broker designated by the
Company to handle option exercises, designate a third party who, on your death,
will thereafter be entitled to exercise this option and receive the Common Stock
or other consideration resulting from such exercise. In the absence of such a
designation, your executor or administrator of your estate will be entitled to
exercise this option and receive, on behalf of your estate, the Common Stock or
other consideration resulting from such exercise.

11.    RIGHT OF REPURCHASE. The Company will have the right to repurchase all of
the shares of Common Stock you acquire pursuant to the exercise of your option
upon termination of your Continuous Service for Cause. Such repurchase will be
at the exercise price you paid to acquire the shares and will be effected
pursuant to such other terms and conditions, and at such time, as the Company
shall determine.

12.    OPTION NOT A SERVICE CONTRACT. Your option is not an employment or
service contract, and nothing in your option will be deemed to create in any way
whatsoever any obligation

 

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on your part to continue in the employ of the Company or an Affiliate, or of the
Company or an Affiliate to continue your employment. In addition, nothing in
your option will obligate the Company or an Affiliate, their respective
stockholders, boards of directors, officers or employees to continue any
relationship that you might have as a Director or Consultant for the Company or
an Affiliate.

13.    WITHHOLDING OBLIGATIONS.

(a)    At the time you exercise your option, in whole or in part, and at any
time thereafter as requested by the Company, you hereby authorize withholding
from payroll and any other amounts payable to you, and otherwise agree to make
adequate provision for (including by means of a “same day sale” pursuant to a
program developed under Regulation T as promulgated by the Federal Reserve Board
to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or
an Affiliate, if any, which arise in connection with the exercise of your
option.

(b)    If this option is a Nonstatutory Stock Option, then upon your request and
subject to approval by the Company, and compliance with any applicable legal
conditions or restrictions, the Company may withhold from fully vested shares of
Common Stock otherwise issuable to you upon the exercise of your option a number
of whole shares of Common Stock having a Fair Market Value, determined by the
Company as of the date of exercise, not in excess of the minimum amount of tax
required to be withheld by law (or such lower amount as may be necessary to
avoid classification of your option as a liability for financial accounting
purposes). Any adverse consequences to you arising in connection with such share
withholding procedure shall be your sole responsibility.

(c)    You may not exercise your option unless the tax withholding obligations
of the Company and/or any Affiliate are satisfied. Accordingly, you may not be
able to exercise your option when desired even though your option is vested, and
the Company will have no obligation to issue a certificate for such shares of
Common Stock or release such shares of Common Stock from any escrow provided for
herein, if applicable, unless such obligations are satisfied.

14.    TAX CONSEQUENCES. You hereby agree that the Company does not have a duty
to design or administer the Plan or its other compensation programs in a manner
that minimizes your tax liabilities. You will not make any claim against the
Company, or any of its Officers, Directors, Employees or Affiliates related to
tax liabilities arising from your option or your other compensation. In
particular, you acknowledge that this option is exempt from Section 409A of the
Code only if the exercise price per share specified in the Stock Option Grant
Notice is at least equal to the “fair market value” per share of Common Stock on
the Date of Grant and there is no other impermissible deferral of compensation
associated with the option. Because the Common Stock is not traded on an
established securities market, the Fair Market Value is determined by the Board,
perhaps in consultation with an independent valuation firm retained by the
Company. You acknowledge that there is no guarantee that the Internal Revenue
Service will agree with the valuation as determined by the Board, and you will
not make any claim against the Company, or any of its Officers, Directors,
Employees or Affiliates in the event that the Internal Revenue Service asserts
that the valuation determined by the Board is less than the “fair market value”
as subsequently determined by the Internal Revenue Service.

 

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15.    NOTICES. Any notices provided for in your option or the Plan will be
given in writing (including electronically) and will be deemed effectively given
upon receipt or, in the case of notices delivered by mail by the Company to you,
five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company. The Company
may, in its sole discretion, decide to deliver any documents related to
participation in the Plan and this option by electronic means or to request your
consent to participate in the Plan by electronic means. By accepting this
option, you consent to receive such documents by electronic delivery and to
participate in the Plan through an on-line or electronic system established and
maintained by the Company or another third party designated by the Company.

 

 

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ATTACHMENT II

2018 EQUITY INCENTIVE PLAN

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ATTACHMENT III

NOTICE OF EXERCISE

--------------------------------------------------------------------------------

NOTICE OF EXERCISE

IMMUNOVANT SCIENCES LTD.

CLARENDON HOUSE

2 CHURCH STREET

HAMILTON HM 11, BERMUDA

Date of Exercise:                     

This constitutes notice to Immunovant Sciences Ltd. (the “Company”) under my
stock option that I elect to purchase the below number of common shares of the
Company (the “Shares”) for the exercise price set forth below.

 

Type of option (check one):    Incentive  ☐      Nonstatutory  ☐  

Stock option dated:

        

 

 

    

 

 

 

Number of Shares as to which option is exercised:

        

 

 

    

 

 

 

Certificates to be issued in name of:

        

 

 

    

 

 

 

Total exercise price:

   $                    $                   

 

 

    

 

 

 

Cash payment delivered herewith:

   $        $       

 

 

    

 

 

 

Regulation T Program (cashless exercise5):

   $        $       

 

 

    

 

 

 

Value of                  Shares delivered herewith6:

   $        $       

 

 

    

 

 

 

By this exercise, I agree (i) to provide such additional documents as you may
require pursuant to the terms of the Immunovant Sciences Ltd. 2018 Equity
Incentive Plan, including without limitation, a joinder to the Shareholders
Agreement (ii) to provide for the payment by me to you (in the manner designated
by you) of your withholding obligation, if any, relating to the exercise of this
option, and (iii) if this exercise relates to an incentive stock option, to
notify you in writing within fifteen (15) days after the date of any disposition
of any of the Shares issued upon exercise of this option that occurs within two
(2) years after the date of grant of this option or within one (1) year after
such Shares are issued upon exercise of this option.

 

 

5 

Shares must meet the public trading requirements set forth in the option
agreement.

6 

Shares must meet the public trading requirements set forth in the option. Shares
must be valued in accordance with the terms of the option being exercised, and
must be owned free and clear of any liens, claims, encumbrances or security
interests. Certificates must be endorsed or accompanied by an executed
assignment separate from certificate.

 

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I hereby make the following certifications and representations with respect to
the number of Shares listed above, which are being acquired by me for my own
account upon exercise of the option as set forth above:

I acknowledge that the Shares have not been registered under the Securities Act
of 1933, as amended (the “Securities Act”), and are deemed to constitute
“restricted securities” under Rule 701 and Rule 144 promulgated under the
Securities Act. I warrant and represent to the Company that I have no present
intention of distributing or selling said Shares, except as permitted under the
Securities Act and any applicable state securities laws.

I further acknowledge that I will not be able to resell the Shares for at least
ninety (90) days after the common shares of the Company becomes publicly traded
(i.e., subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934) under Rule 701 and that more restrictive
conditions apply to affiliates of the Company under Rule 144.

I further acknowledge that all certificates representing any of the Shares
subject to the provisions of the option shall have endorsed thereon appropriate
legends reflecting the foregoing limitations, as well as any legends reflecting
restrictions pursuant to the Company’s Memorandum of Association, Bye-laws
and/or applicable securities laws.

I further agree that, if required by the Company (or a representative of the
underwriters) in connection with the first underwritten registration of the
offering of any securities of the Company under the Securities Act, I will not
sell, dispose of, transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction with the same
economic effect as a sale with respect to any common shares or other securities
of the Company for a period of one hundred eighty (180) days following the
effective date of a registration statement of the Company filed under the
Securities Act (or such longer period as the underwriters or the Company shall
request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or
any successor or similar rule or regulation) (the “Lock-Up Period”). I further
agree to execute and deliver such other agreements as may be reasonably
requested by the Company or the underwriters that are consistent with the
foregoing or that are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such period.

 

Very truly yours,

 

Signature

 

Print Name

 

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