BIOXCEL THERAPEUTICS, INC.
2020 EMPLOYEE STOCK PURCHASE PLAN

 

Exhibit 10.2

 

Article I.
PURPOSE

 

The purposes of this BioXcel Therapeutics, Inc. 2020 Employee Stock Purchase
Plan (as it may be amended or restated from time to time, the “Plan”) are to
assist Eligible Employees of BioXcel Therapeutics, Inc., a Delaware corporation
(the “Company”), and its Designated Subsidiaries in acquiring a stock ownership
interest in the Company.

 

The Plan consists of two components: (i) the Section 423 Component and (ii) the
Non-Section 423 Component. The Section 423 Component is intended to qualify as
an “employee stock purchase plan” under Section 423 of the Code and shall be
administered, interpreted and construed in a manner consistent with the
requirements of Section 423 of the Code. The Non-Section 423 Component
authorizes the grant of rights which need not qualify as rights granted pursuant
to an “employee stock purchase plan” under Section 423 of the Code. Rights
granted under the Non-Section 423 Component shall be granted pursuant to
separate Offerings containing such sub-plans, appendices, rules or procedures as
may be adopted by the Administrator and designed to achieve tax, securities laws
or other objectives for Eligible Employees and Designated Subsidiaries but shall
not be intended to qualify as an “employee stock purchase plan” under
Section 423 of the Code. Except as otherwise determined by the Administrator or
provided herein, the Non-Section 423 Component will operate and be administered
in the same manner as the Section 423 Component. Offerings intended to be made
under the Non-Section 423 Component will be designated as such by the
Administrator at or prior to the time of such Offering.

 

For purposes of this Plan, the Administrator may designate separate Offerings
under the Plan in which Eligible Employees will participate. The terms of these
Offerings need not be identical, even if the dates of the applicable Offering
Period(s) in each such Offering are identical, provided that the terms of
participation are the same within each separate Offering under the Section 423
Component (as determined under Section 423 of the Code). Solely by way of
example and without limiting the foregoing, the Company could, but shall not be
required to, provide for simultaneous Offerings under the Section 423 Component
and the Non-Section 423 Component of the Plan.

 

Article II.
DEFINITIONS AND CONSTRUCTION

 

Wherever the following terms are used in the Plan they shall have the meanings
specified below, unless the context clearly indicates otherwise. The singular
pronoun shall include the plural where the context so indicates. Masculine,
feminine and neuter pronouns are used interchangeably and each comprehends the
others.

 

2.1            “Administrator” shall mean the entity that conducts the general
administration of the Plan as provided in Article XI. The term “Administrator”
shall refer to the Committee unless the Board has assumed the authority for
administration of the Plan as provided in Article XI.

 

 

 

 

2.2            “Applicable Law” shall mean the requirements relating to the
administration of equity incentive plans under U.S. federal and state
securities, tax and other applicable laws, rules and regulations, the applicable
rules of any stock exchange or quotation system on which Shares are listed or
quoted and the applicable laws and rules of any foreign country or other
jurisdiction where rights under this Plan are granted.

  

2.3            “Board” shall mean the Board of Directors of the Company.

 

2.4            “Change in Control” shall mean and include each of the following:

 

(a)            A transaction or series of transactions (other than an offering
of Shares to the general public through a registration statement filed with the
Securities and Exchange Commission or a transaction or series of transactions
that meets the requirements of clauses (i) and (ii) of subsection (c) below)
whereby any “person” or related “group” of “persons” (as such terms are used in
Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of
its Subsidiaries, an employee benefit plan maintained by the Company or any of
its Subsidiaries or a “person” that, prior to such transaction, directly or
indirectly controls, is controlled by, or is under common control with, the
Company) directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of securities of the Company
possessing more than 50% of the total combined voting power of the Company’s
securities outstanding immediately after such acquisition; or

 

(b)            During any period of two consecutive years, individuals who, at
the beginning of such period, constitute the Board together with any new
director(s) (other than a director designated by a person who shall have entered
into an agreement with the Company to effect a transaction described in
subsections (a) or (c)) whose election by the Board or nomination for election
by the Company’s stockholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the beginning of
the two-year period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority thereof; or

 

(c)            The consummation by the Company (whether directly involving the
Company or indirectly involving the Company through one or more intermediaries)
of (x) a merger, consolidation, reorganization, or business combination or (y) a
sale or other disposition of all or substantially all of the Company’s assets in
any single transaction or series of related transactions or (z) the acquisition
of assets or stock of another entity, in each case other than a transaction:

 

(i)            which results in the Company’s voting securities outstanding
immediately before the transaction continuing to represent (either by remaining
outstanding or by being converted into voting securities of the Company or the
person that, as a result of the transaction, controls, directly or indirectly,
the Company or owns, directly or indirectly, all or substantially all of the
Company’s assets or otherwise succeeds to the business of the Company (the
Company or such person, the “Successor Entity”)) directly or indirectly, at
least a majority of the combined voting power of the Successor Entity’s
outstanding voting securities immediately after the transaction, and

 

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(ii)            after which no person or group beneficially owns voting
securities representing 50% or more of the combined voting power of the
Successor Entity; provided, however, that no person or group shall be treated
for purposes of this clause (ii) as beneficially owning 50% or more of the
combined voting power of the Successor Entity solely as a result of the voting
power held in the Company prior to the consummation of the transaction.

 

The Administrator shall have full and final authority, which shall be exercised
in its discretion, to determine conclusively whether a Change in Control has
occurred pursuant to the above definition, the date of the occurrence of such
Change in Control and any incidental matters relating thereto.

 

2.5            “Code” shall mean the U.S. Internal Revenue Code of 1986, as
amended, and the regulations issued thereunder.

 

2.6            “Company” shall mean BioXcel Therapeutics, Inc., a Delaware
corporation, or any successor.

 

2.7            “Compensation” of an Eligible Employee shall mean, unless
otherwise determined by the Administrator, the gross base compensation received
by such Eligible Employee as compensation for services to the Company or any
Designated Subsidiary, including overtime payments and excluding sales
commissions, incentive compensation, bonuses, expense reimbursements, fringe
benefits and other special payments.

 

2.8            “Designated Subsidiary” shall mean any Subsidiary designated by
the Administrator in accordance with Section 11.3(b), such designation to
specify whether such participation is in the Section 423 Component or
Non-Section 423 Component. A Designated Subsidiary may participate in either the
Section 423 Component or Non-Section 423 Component, but not both.

 

2.9            “Eligible Employee” shall mean an Employee who does not,
immediately after any rights under this Plan are granted, own (directly or
through attribution) stock possessing 5% or more of the total combined voting
power or value of all classes of Shares and other securities of the Company, a
Parent or a Subsidiary (as determined under Section 423(b)(3) of the Code). For
purposes of the foregoing, the rules of Section 424(d) of the Code with regard
to the attribution of stock ownership shall apply in determining the stock
ownership of an individual, and stock that an Employee may purchase under
outstanding options shall be treated as stock owned by the Employee.

 

Notwithstanding the foregoing, the Administrator may provide in an Offering
Document that an Employee shall not be eligible to participate in an Offering
Period under the Section 423 Component if: (i) such Employee is a highly
compensated employee within the meaning of Section 423(b)(4)(D) of the Code;
(ii) such Employee has not met a service requirement designated by the
Administrator pursuant to Section 423(b)(4)(A) of the Code (which service
requirement may not exceed two years); (iii) such Employee’s customary
employment is for twenty hours per week or less; (iv) such Employee’s customary
employment is for less than five months in any calendar year; and/or (v) such
Employee is a citizen or resident of a foreign jurisdiction and the grant of a
right to purchase Shares under the Plan to such Employee would be prohibited
under the laws of such foreign jurisdiction or the grant of a right to purchase
Shares under the Plan to such Employee in compliance with the laws of such
foreign jurisdiction would cause the Plan to violate the requirements of
Section 423 of the Code, as determined by the Administrator in its sole
discretion; provided, further, that any exclusion in clauses (i), (ii), (iii),
(iv) or (v) shall be applied in an identical manner under each Offering Period
to all Employees, in accordance with Treasury Regulation Section 1.423-2(e).

 

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Further notwithstanding the foregoing, with respect to the Non-Section 423
Component, the first sentence in this definition shall apply in determining who
is an “Eligible Employee,” except (i) the Administrator may limit eligibility
further within the Company or a Designated Subsidiary so as to only designate
some Employees of the Company or a Designated Subsidiary as Eligible Employees,
and (ii) to the extent the restrictions in the first sentence in this definition
are not consistent with applicable local laws, the applicable local laws shall
control.

 

2.10            “Employee” shall mean any officer or other employee of the
Company or any Designated Subsidiary. For the Section 423 Component of the Plan,
“employee” shall not include any director or employee of the Company or a
Designated Subsidiary who does not render services to the Company or a
Designated Subsidiary as an employee within the meaning of Section 3401(c) of
the Code. For purposes of the Plan, the employment relationship shall be treated
as continuing intact while the individual is on sick leave or other leave of
absence approved by the Company or Designated Subsidiary and meeting the
requirements of Treasury Regulation Section 1.421-1(h)(2). Where the period of
leave exceeds three (3) months and the individual’s right to reemployment is not
guaranteed either by statute or by contract, the employment relationship shall
be deemed to have terminated on the first day immediately following such three
(3)-month period.

 

2.11            “Enrollment Date” shall mean the first Trading Day of each
Offering Period.

 

2.12            “Exchange Act” shall mean the U.S. Securities Exchange Act of
1934, as amended.

 

2.13            “Fair Market Value” means, as of any date, the value of Shares
determined as follows: (i) if the Shares are listed on any established stock
exchange, its Fair Market Value will be the closing sales price for such Shares
as quoted on such exchange for such date, or if no sale occurred on such date,
the last day preceding such date during which a sale occurred, as reported in
The Wall Street Journal or another source the Administrator deems reliable;
(ii) if the Shares are not traded on a stock exchange but are quoted on a
national market or other quotation system, the closing sales price on such date,
or if no sales occurred on such date, then on the last date preceding such date
during which a sale occurred, as reported in The Wall Street Journal or another
source the Administrator deems reliable; or (iii) without an established market
for the Shares, the Administrator will determine the Fair Market Value in its
discretion.

 

2.14            “Non-Section 423 Component” means those Offerings under the
Plan, together with the sub-plans, appendices, rules or procedures, if any,
adopted by the Administrator as a part of this Plan, in each case, pursuant to
which rights to purchase Shares during an Offering Period may be granted to
Eligible Employees that need not satisfy the requirements for rights to purchase
Shares granted pursuant to an “employee stock purchase plan” that are set forth
under Section 423 of the Code.

 

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2.15            “Offering” means an offer under the Plan of a right to purchase
Shares that may be exercised during an Offering Period as further described in
Article IV hereof. Unless otherwise specified by the Administrator, each
Offering to the Eligible Employees of the Company or a Designated Subsidiary
shall be deemed a separate Offering, even if the dates and other terms of the
applicable Offering Periods of each such Offering are identical, and the
provisions of the Plan will separately apply to each Offering. To the extent
permitted by Treas. Reg. § 1.423-2(a)(1), the terms of each separate Offering
under the Section 423 Component need not be identical, provided that the terms
of the Section 423 Component and an Offering thereunder together satisfy Treas.
Reg. § 1.423-2(a)(2) and (a)(3).

  

2.16            “Offering Document” shall have the meaning given to such term in
Section 4.1.

 

2.17            “Offering Period” shall have the meaning given to such term in
Section 4.1.

 

2.18            “Parent” shall mean any corporation, other than the Company, in
an unbroken chain of corporations ending with the Company if, at the time of the
determination, each of the corporations other than the Company owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

 

2.19            “Participant” shall mean any Eligible Employee who has executed
a subscription agreement and been granted rights to purchase Shares pursuant to
the Plan.

 

2.20            “Plan” shall mean this 2020 Employee Stock Purchase Plan,
including both the Section 423 Component and Non-Section 423 Component and any
other sub-plans or appendices hereto, as amended from time to time.

 

2.21            “Purchase Date” shall mean the last Trading Day of each Offering
Period.

 

2.22            “Purchase Price” shall mean the purchase price designated by the
Administrator in the applicable Offering Document (which purchase price, for
purposes of the Section 423 Component, shall not be less than 85% of the Fair
Market Value of a Share on the Enrollment Date or on the Purchase Date,
whichever is lower); provided, however, that, in the event no purchase price is
designated by the Administrator in the applicable Offering Document, the
purchase price for the Offering Periods covered by such Offering Document shall
be 85% of the Fair Market Value of a Share on the Enrollment Date or on the
Purchase Date, whichever is lower; provided, further, that the Purchase Price
may be adjusted by the Administrator pursuant to Article VIII and shall not be
less than the par value of a Share.

 

2.23            “Section 423 Component” means those Offerings under the Plan,
together with the sub-plans, appendices, rules or procedures, if any, adopted by
the Administrator as a part of this Plan, in each case, pursuant to which rights
to purchase Shares during an Offering Period may be granted to Eligible
Employees that are intended to satisfy the requirements for rights to purchase
Shares granted pursuant to an “employee stock purchase plan” that are set forth
under Section 423 of the Code.

 

2.24            “Securities Act” shall mean the U.S. Securities Act of 1933, as
amended.

 

2.25            “Share” shall mean a share of common stock of the Company.

 

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2.26            “Subsidiary” shall mean any corporation, other than the Company,
in an unbroken chain of corporations beginning with the Company if, at the time
of the determination, each of the corporations other than the last corporation
in an unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain; provided, however, that a limited liability company or partnership may be
treated as a Subsidiary to the extent either (a) such entity is treated as a
disregarded entity under Treasury Regulation Section 301.7701-3(a) by reason of
the Company or any other Subsidiary that is a corporation being the sole owner
of such entity, or (b) such entity elects to be classified as a corporation
under Treasury Regulation Section 301.7701-3(a) and such entity would otherwise
qualify as a Subsidiary. In addition, with respect to the Non-Section 423
Component, Subsidiary shall include any corporate or non-corporate entity in
which the Company has a direct or indirect equity interest or significant
business relationship.

 

2.27            “Trading Day” shall mean a day on which national stock exchanges
in the United States are open for trading.

 

2.28            “Treas. Reg.” means U.S. Department of the Treasury regulations.

 

Article III.
SHARES SUBJECT TO THE PLAN

 

3.1            Number of Shares. Subject to Article VIII, the aggregate number
of Shares that may be issued pursuant to rights granted under the Plan shall be
100,000 Shares. In addition to the foregoing, subject to Article VIII, on the
first day of each calendar year beginning on January 1, 2021 and ending on and
including January 1, 2030, the number of Shares available for issuance under the
Plan shall be increased by that number of Shares equal to the lesser of (a) 1%
of the Shares outstanding on the final day of the immediately preceding calendar
year and (b) such smaller number of Shares as determined by the Board. If any
right granted under the Plan shall for any reason terminate without having been
exercised, the Shares not purchased under such right shall again become
available for issuance under the Plan. Notwithstanding anything in this
Section 3.1 to the contrary, the number of Shares that may be issued or
transferred pursuant to the rights granted under the Section 423 Component of
the Plan shall not exceed an aggregate of 500,000 Shares, subject to
Article VIII.

 

3.2            Shares Distributed. Any Shares distributed pursuant to the Plan
may consist, in whole or in part, of authorized and unissued Shares, treasury
shares or Shares purchased on the open market.

 

Article IV.
Offering Periods; Offering Documents; Purchase Dates

 

4.1            Offering Periods. The Administrator may from time to time grant
or provide for the grant of rights to purchase Shares under the Plan to Eligible
Employees during one or more periods (each, an “Offering Period”) selected by
the Administrator. The terms and conditions applicable to each Offering Period
shall be set forth in an “Offering Document” adopted by the Administrator, which
Offering Document shall be in such form and shall contain such terms and
conditions as the Administrator shall deem appropriate and shall be incorporated
by reference into and made part of the Plan and shall be attached hereto as part
of the Plan. The provisions of separate Offerings or Offering Periods under the
Plan need not be identical.

 

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4.2            Offering Documents. Each Offering Document with respect to an
Offering Period shall specify (through incorporation of the provisions of this
Plan by reference or otherwise):

 

(a)            the length of the Offering Period, which period shall not exceed
twenty-seven months;

 

(b)            the maximum number of Shares that may be purchased by any
Eligible Employee during such Offering Period, which, in the absence of a
contrary designation by the Administrator, shall be 25,000 Shares; and

 

(c)            such other provisions as the Administrator determines are
appropriate, subject to the Plan.

 

Article V.
ELIGIBILITY AND PARTICIPATION

 

5.1            Eligibility. Any Eligible Employee who shall be employed by the
Company or a Designated Subsidiary on a given Enrollment Date for an Offering
Period shall be eligible to participate in the Plan during such Offering Period,
subject to the requirements of this Article V and, for the Section 423
Component, the limitations imposed by Section 423(b) of the Code.

 

5.2            Enrollment in Plan.

  

(a)            Except as otherwise set forth in an Offering Document or
determined by the Administrator, an Eligible Employee may become a Participant
in the Plan for an Offering Period by delivering a subscription agreement to the
Company by such time prior to the Enrollment Date for such Offering Period (or
such other date specified in the Offering Document) designated by the
Administrator and in such form as the Company provides.

 

(b)            Each subscription agreement shall designate a whole percentage of
such Eligible Employee’s Compensation to be withheld by the Company or the
Designated Subsidiary employing such Eligible Employee on each payday during the
Offering Period as payroll deductions under the Plan. The percentage of
Compensation designated by an Eligible Employee may not be less than 1% and may
not be more than the maximum percentage specified by the Administrator in the
applicable Offering Document (which percentage shall be 25% in the absence of
any such designation) as payroll deductions. The payroll deductions made for
each Participant shall be credited to an account for such Participant under the
Plan and shall be deposited with the general funds of the Company.

 

(c)            A Participant may increase or decrease the percentage of
Compensation designated in his or her subscription agreement, subject to the
limits of this Section 5.2, or may suspend his or her payroll deductions, at any
time during an Offering Period; provided, however, that the Administrator may
limit the number of changes a Participant may make to his or her payroll
deduction elections during each Offering Period in the applicable Offering
Document (and in the absence of any specific designation by the Administrator, a
Participant shall be allowed one change to his or her payroll deduction
elections during each Offering Period). Any such change or suspension of payroll
deductions shall be effective with the first full payroll period following five
business days after the Company’s receipt of the new subscription agreement (or
such shorter or longer period as may be specified by the Administrator in the
applicable Offering Document). In the event a Participant suspends his or her
payroll deductions, such Participant’s cumulative payroll deductions prior to
the suspension shall remain in his or her account and shall be applied to the
purchase of Shares on the next occurring Purchase Date and shall not be paid to
such Participant unless he or she withdraws from participation in the Plan
pursuant to Article VII.

 

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(d)            Except as otherwise set forth in an Offering Document or
determined by the Administrator, a Participant may participate in the Plan only
by means of payroll deduction and may not make contributions by lump sum payment
for any Offering Period.

 

5.3            Payroll Deductions. Except as otherwise provided in the
applicable Offering Document, payroll deductions for a Participant shall
commence on the first payroll following the Enrollment Date and shall end on the
last payroll in the Offering Period to which the Participant’s authorization is
applicable, unless sooner terminated by the Participant as provided in
Article VII or suspended by the Participant or the Administrator as provided in
Section 5.2 and Section 5.6, respectively. Notwithstanding any other provisions
of the Plan to the contrary, in non-U.S. jurisdictions where participation in
the Plan through payroll deductions is prohibited, the Administrator may provide
that an Eligible Employee may elect to participate through contributions to the
Participant’s account under the Plan in a form acceptable to the Administrator
in lieu of or in addition to payroll deductions; provided, however, that, for
any Offering under the Section 423 Component, the Administrator shall take into
consideration any limitations under Section 423 of the Code when applying an
alternative method of contribution.

 

5.4            Effect of Enrollment. A Participant’s completion of a
subscription agreement will enroll such Participant in the Plan for each
subsequent Offering Period on the terms contained therein until the Participant
either submits a new subscription agreement, withdraws from participation under
the Plan as provided in Article VII or otherwise becomes ineligible to
participate in the Plan.

 

5.5            Limitation on Purchase of Shares. An Eligible Employee may be
granted rights under the Section 423 Component only if such rights, together
with any other rights granted to such Eligible Employee under “employee stock
purchase plans” of the Company, any Parent or any Subsidiary, as specified by
Section 423(b)(8) of the Code, do not permit such employee’s rights to purchase
stock of the Company or any Parent or Subsidiary to accrue at a rate that
exceeds $25,000 of the fair market value of such stock (determined as of the
first day of the Offering Period during which such rights are granted) for each
calendar year in which such rights are outstanding at any time. This limitation
shall be applied in accordance with Section 423(b)(8) of the Code.

 

5.6            Suspension of Payroll Deductions. Notwithstanding the foregoing,
to the extent necessary to comply with Section 423(b)(8) of the Code and
Section 5.5 (with respect to the Section 423 Component) or the other limitations
set forth in this Plan, a Participant’s payroll deductions may be suspended by
the Administrator at any time during an Offering Period. The balance of the
amount credited to the account of each Participant that has not been applied to
the purchase of Shares by reason of Section 423(b)(8) of the Code, Section 5.5
or the other limitations set forth in this Plan shall be paid to such
Participant in one lump sum in cash as soon as reasonably practicable after the
Purchase Date.

 

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5.7            Foreign Employees. In order to facilitate participation in the
Plan, the Administrator may provide for such special terms applicable to
Participants who are citizens or residents of a foreign jurisdiction, or who are
employed by a Designated Subsidiary outside of the United States, as the
Administrator may consider necessary or appropriate to accommodate differences
in local law, tax policy or custom. Except as permitted by Section 423 of the
Code, with respect to the Section 423 Component, such special terms may not be
more favorable than the terms of rights granted under the Section 423 Component
to Eligible Employees who are residents of the United States. Such special terms
may be set forth in an addendum to the Plan in the form of an appendix or
sub-plan (which appendix or sub-plan may be designed to govern Offerings under
the Section 423 Component or the Non-Section 423 Component, as determined by the
Administrator). To the extent that the terms and conditions set forth in an
appendix or sub-plan conflict with any provisions of the Plan, the provisions of
the appendix or sub-plan shall govern. The adoption of any such appendix or
sub-plan shall be pursuant to Section 11.3(f). Without limiting the foregoing,
the Administrator is specifically authorized to adopt rules and procedures, with
respect to Participants who are foreign nationals or employed in non-U.S.
jurisdictions, regarding the exclusion of particular Subsidiaries from
participation in the Plan, eligibility to participate, the definition of
Compensation, handling of payroll deductions or other contributions by
Participants, payment of interest, conversion of local currency, data privacy
security, payroll tax, withholding procedures, establishment of bank or trust
accounts to hold payroll deductions or contributions.

 

5.8            Leave of Absence. During leaves of absence approved by the
Company meeting the requirements of Treasury Regulation
Section 1.421-1(h)(2) under the Code, a Participant may continue participation
in the Plan by making cash payments to the Company on his or her normal payday
equal to his or her authorized payroll deduction.

 

Article VI.
grant and Exercise of rights

 

6.1            Grant of Rights. On the Enrollment Date of each Offering Period,
each Eligible Employee participating in such Offering Period shall be granted a
right to purchase the maximum number of Shares specified under Section 4.2,
subject to the limits in Section 5.5, and shall have the right to buy, on each
Purchase Date during such Offering Period (at the applicable Purchase Price),
such number of whole Shares as is determined by dividing (a) such Participant’s
payroll deductions accumulated prior to such Purchase Date and retained in the
Participant’s account as of the Purchase Date, by (b) the applicable Purchase
Price (rounded down to the nearest Share). The right shall expire on the last
day of the Offering Period.

 

6.2            Exercise of Rights. On each Purchase Date, each Participant’s
accumulated payroll deductions and any other additional payments specifically
provided for in the applicable Offering Document will be applied to the purchase
of whole Shares, up to the maximum number of Shares permitted pursuant to the
terms of the Plan and the applicable Offering Document, at the Purchase Price.
No fractional Shares shall be issued upon the exercise of rights granted under
the Plan, unless the Offering Document specifically provides otherwise. Any cash
in lieu of fractional Shares remaining after the purchase of whole Shares upon
exercise of a purchase right will be credited to a Participant’s account and
carried forward and applied toward the purchase of whole Shares for the next
following Offering Period. Shares issued pursuant to the Plan may be evidenced
in such manner as the Administrator may determine and may be issued in
certificated form or issued pursuant to book-entry procedures.

 

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6.3            Pro Rata Allocation of Shares. If the Administrator determines
that, on a given Purchase Date, the number of Shares with respect to which
rights are to be exercised may exceed (a) the number of Shares that were
available for issuance under the Plan on the Enrollment Date of the applicable
Offering Period, or (b) the number of Shares available for issuance under the
Plan on such Purchase Date, the Administrator may in its sole discretion provide
that the Company shall make a pro rata allocation of the Shares available for
purchase on such Enrollment Date or Purchase Date, as applicable, in as uniform
a manner as shall be practicable and as it shall determine in its sole
discretion to be equitable among all Participants for whom rights to purchase
Shares are to be exercised pursuant to this Article VI on such Purchase Date,
and shall either (i) continue all Offering Periods then in effect, or
(ii) terminate any or all Offering Periods then in effect pursuant to
Article IX. The Company may make pro rata allocation of the Shares available on
the Enrollment Date of any applicable Offering Period pursuant to the preceding
sentence, notwithstanding any authorization of additional Shares for issuance
under the Plan by the Company’s stockholders subsequent to such Enrollment Date.
The balance of the amount credited to the account of each Participant that has
not been applied to the purchase of Shares shall be paid to such Participant in
one lump sum in cash as soon as reasonably practicable after the Purchase Date.

 

6.4            Withholding. At the time a Participant’s rights under the Plan
are exercised, in whole or in part, or at the time some or all of the Shares
issued under the Plan is disposed of, the Participant must make adequate
provision for the Company’s federal, state, or other tax withholding
obligations, if any, that arise upon the exercise of the right or the
disposition of the Shares. At any time, the Company may, but shall not be
obligated to, withhold from the Participant’s compensation the amount necessary
for the Company to meet applicable withholding obligations, including any
withholding required to make available to the Company any tax deductions or
benefits attributable to sale or early disposition of Shares by the Participant.

 

6.5            Conditions to Issuance of Shares. The Company shall not be
required to issue or deliver any certificate or certificates for, or make any
book entries evidencing, Shares purchased upon the exercise of rights under the
Plan prior to fulfillment of all of the following conditions:

 

(a)            The admission of such Shares to listing on all stock exchanges,
if any, on which the Shares are then listed;

 

(b)            The completion of any registration or other qualification of such
Shares under any state or federal law or under the rulings or regulations of the
Securities and Exchange Commission or any other governmental regulatory body,
that the Administrator shall, in its absolute discretion, deem necessary or
advisable;

 

10

 

 

(c)            The obtaining of any approval or other clearance from any state
or federal governmental agency that the Administrator shall, in its absolute
discretion, determine to be necessary or advisable;

 

(d)            The payment to the Company of all amounts that it is required to
withhold under federal, state or local law upon exercise of the rights, if any;
and

 

(e)            The lapse of such reasonable period of time following the
exercise of the rights as the Administrator may from time to time establish for
reasons of administrative convenience.

 

Article VII.
WITHDRAWAL; CESSATION OF ELIGIBILITY

 

7.1            Withdrawal. A Participant may withdraw all but not less than all
of the payroll deductions credited to his or her account and not yet used to
exercise his or her rights under the Plan at any time by giving written notice
to the Company in a form acceptable to the Company no later than one week prior
to the end of the Offering Period. All of the Participant’s payroll deductions
credited to his or her account during an Offering Period shall be paid to such
Participant as soon as reasonably practicable after receipt of notice of
withdrawal and such Participant’s rights for the Offering Period shall be
automatically terminated, and no further payroll deductions for the purchase of
Shares shall be made for such Offering Period. If a Participant withdraws from
an Offering Period, payroll deductions shall not resume at the beginning of the
next Offering Period unless the Participant timely delivers to the Company a new
subscription agreement.

 

7.2            Future Participation. A Participant’s withdrawal from an Offering
Period shall not have any effect upon his or her eligibility to participate in
any similar plan that may hereafter be adopted by the Company or a Designated
Subsidiary or in subsequent Offering Periods that commence after the termination
of the Offering Period from which the Participant withdraws.

 

7.3            Cessation of Eligibility. Upon a Participant’s ceasing to be an
Eligible Employee for any reason, he or she shall be deemed to have elected to
withdraw from the Plan pursuant to this Article VII and the payroll deductions
credited to such Participant’s account during the Offering Period shall be paid
to such Participant or, in the case of his or her death, to the person or
persons entitled thereto under Section 12.4, as soon as reasonably practicable,
and such Participant’s rights for the Offering Period shall be automatically
terminated. If a Participant transfers employment from the Company or any
Designated Subsidiary participating in the Section 423 Component to any
Designated Subsidiary participating in the Non-Section 423 Component, such
transfer shall not be treated as a termination of employment, but the
Participant shall immediately cease to participate in the Section 423 Component;
however, any contributions made for the Offering Period in which such transfer
occurs shall be transferred to the Non-Section 423 Component, and such
Participant shall immediately join the then-current Offering under the
Non-Section 423 Component upon the same terms and conditions in effect for the
Participant’s participation in the Section 423 Component, except for such
modifications otherwise applicable for Participants in such Offering. A
Participant who transfers employment from any Designated Subsidiary
participating in the Non-Section 423 Component to the Company or any Designated
Subsidiary participating in the Section 423 Component shall not be treated as
terminating the Participant’s employment and shall remain a Participant in the
Non-Section 423 Component until the earlier of (i) the end of the current
Offering Period under the Non-Section 423 Component or (ii) the Enrollment Date
of the first Offering Period in which the Participant is eligible to participate
following such transfer. Notwithstanding the foregoing, the Administrator may
establish different rules to govern transfers of employment between entities
participating in the Section 423 Component and the Non-Section 423 Component,
consistent with the applicable requirements of Section 423 of the Code.

 

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Article VIII.
Adjustments upon Changes in SHARES

 

8.1            Changes in Capitalization. Subject to Section 8.3, in the event
that the Administrator determines that any dividend or other distribution
(whether in the form of cash, Shares, other securities, or other property),
Change in Control, reorganization, merger, amalgamation, consolidation,
combination, repurchase, redemption, recapitalization, liquidation, dissolution,
or sale, transfer, exchange or other disposition of all or substantially all of
the assets of the Company, or sale or exchange of Shares or other securities of
the Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event, as
determined by the Administrator, affects the Shares such that an adjustment is
determined by the Administrator to be appropriate in order to prevent dilution
or enlargement of the benefits or potential benefits intended by the Company to
be made available under the Plan or with respect to any outstanding purchase
rights under the Plan, the Administrator shall make equitable adjustments, if
any, to reflect such change with respect to (a) the aggregate number and type of
Shares (or other securities or property) that may be issued under the Plan
(including, but not limited to, adjustments of the limitations in Section 3.1
and the limitations established in each Offering Document pursuant to
Section 4.2 on the maximum number of Shares that may be purchased); (b) the
class(es) and number of Shares and price per Share subject to outstanding
rights; and (c) the Purchase Price with respect to any outstanding rights.

 

8.2            Other Adjustments. Subject to Section 8.3, in the event of any
transaction or event described in Section 8.1 or any unusual or nonrecurring
transactions or events affecting the Company, any affiliate of the Company, or
the financial statements of the Company or any affiliate (including without
limitation any Change in Control), or of changes in Applicable Law or accounting
principles, the Administrator, in its discretion, and on such terms and
conditions as it deems appropriate, is hereby authorized to take any one or more
of the following actions whenever the Administrator determines that such action
is appropriate in order to prevent the dilution or enlargement of the benefits
or potential benefits intended to be made available under the Plan or with
respect to any right under the Plan, to facilitate such transactions or events
or to give effect to such changes in laws, regulations or principles:

 

(a)            To provide for either (i) termination of any outstanding right in
exchange for an amount of cash, if any, equal to the amount that would have been
obtained upon the exercise of such right had such right been currently
exercisable or (ii) the replacement of such outstanding right with other rights
or property selected by the Administrator in its sole discretion;

 

(b)            To provide that the outstanding rights under the Plan shall be
assumed by the successor or survivor corporation, or a parent or subsidiary
thereof, or shall be substituted for by similar rights covering the stock of the
successor or survivor corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices;

 

12

 

  

(c)            To make adjustments in the number and type of Shares (or other
securities or property) subject to outstanding rights under the Plan and/or in
the terms and conditions of outstanding rights and rights that may be granted in
the future;

 

(d)            To provide that Participants’ accumulated payroll deductions may
be used to purchase Shares prior to the next occurring Purchase Date on such
date as the Administrator determines in its sole discretion and the
Participants’ rights under the ongoing Offering Period(s) shall be terminated;
and

 

(e)            To provide that all outstanding rights shall terminate without
being exercised.

 

8.3            No Adjustment Under Certain Circumstances. No adjustment or
action described in this Article VIII or in any other provision of the Plan
shall be authorized to the extent that such adjustment or action would cause the
Section 423 Component of the Plan to fail to satisfy the requirements of
Section 423 of the Code.

 

8.4            No Other Rights. Except as expressly provided in the Plan, no
Participant shall have any rights by reason of any subdivision or consolidation
of shares of stock of any class, the payment of any dividend, any increase or
decrease in the number of shares of stock of any class or any dissolution,
liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the
Administrator under the Plan, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of Shares subject to outstanding rights under the Plan or the Purchase
Price with respect to any outstanding rights.

 

Article IX.
Amendment, modification and termination

 

9.1            Amendment, Modification and Termination. The Administrator may
amend, suspend or terminate the Plan at any time and from time to time;
provided, however, that approval of the Company’s stockholders shall be required
to amend the Plan to: (a) increase the aggregate number, or change the type, of
shares that may be sold pursuant to rights under the Plan under Section 3.1
(other than an adjustment as provided by Article VIII) or (b) change the
corporations or classes of corporations whose employees may be granted rights
under the Plan.

 

9.2            Certain Changes to Plan. Without stockholder consent and without
regard to whether any Participant rights may be considered to have been
adversely affected (and, with respect to the Section 423 Component of the Plan,
to the extent permitted by Section 423 of the Code), the Administrator shall be
entitled to change the Offering Periods, limit the frequency and/or number of
changes in the amount withheld from Compensation during an Offering Period,
establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, permit payroll withholding in excess of the amount designated
by a Participant in order to adjust for delays or mistakes in the Company’s
processing of withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of Shares for each Participant properly correspond
with amounts withheld from the Participant’s Compensation, and establish such
other limitations or procedures as the Administrator determines in its sole
discretion to be advisable that are consistent with the Plan.

 

13

 

  

9.3            Actions In the Event of Unfavorable Financial Accounting
Consequences. In the event the Administrator determines that the ongoing
operation of the Plan may result in unfavorable financial accounting
consequences, the Administrator may, in its discretion and, to the extent
necessary or desirable, modify or amend the Plan to reduce or eliminate such
accounting consequence including, but not limited to:

 

(a)            altering the Purchase Price for any Offering Period including an
Offering Period underway at the time of the change in Purchase Price;

 

(b)            shortening any Offering Period so that the Offering Period ends
on a new Purchase Date, including an Offering Period underway at the time of the
Administrator action; and

 

(c)            allocating Shares.

 

Such modifications or amendments shall not require stockholder approval or the
consent of any Participant.

 

9.4            Payments Upon Termination of Plan. Upon termination of the Plan,
the balance in each Participant’s Plan account shall be refunded as soon as
practicable after such termination, without any interest thereon, or the
Offering Period may be shortened so that the purchase of Shares occurs prior to
the termination of the Plan.

 

Article X.
TERM OF PLAN

 

The Plan shall become effective on the date the Plan is adopted by the Board,
subject to approval of the Plan by the Company’s stockholders within twelve
months following the date the Plan is first approved by the Board. No right may
be granted under the Plan prior to such stockholder approval. No rights may be
granted under the Plan during any period of suspension of the Plan or after
termination of the Plan.

 

Article XI.
ADMINISTRATION

 

11.1            Administrator. Unless otherwise determined by the Board, the
Administrator of the Plan shall be the Compensation Committee of the Board (or
another committee or a subcommittee of the Board to which the Board delegates
administration of the Plan) (such committee, the “Committee”). The Board may at
any time vest in the Board any authority or duties for administration of the
Plan.

 

14

 

 

11.2            Action by the Administrator. Unless otherwise established by the
Board or in any charter of the Administrator, a majority of the Administrator
shall constitute a quorum. The acts of a majority of the members present at any
meeting at which a quorum is present and, subject to Applicable Law and the
Bylaws of the Company, acts approved in writing by a majority of the
Administrator in lieu of a meeting, shall be deemed the acts of the
Administrator. Each member of the Administrator is entitled to, in good faith,
rely or act upon any report or other information furnished to that member by any
officer or other employee of the Company or any Designated Subsidiary, the
Company’s independent certified public accountants, or any executive
compensation consultant or other professional retained by the Company to assist
in the administration of the Plan.

 

11.3            Authority of Administrator. The Administrator shall have the
power, subject to, and within the limitations of, the express provisions of the
Plan:

 

(a)            To determine when and how rights to purchase Shares shall be
granted and the provisions of each offering of such rights (which need not be
identical).

 

(b)            To designate from time to time which Subsidiaries of the Company
shall be Designated Subsidiaries, which designation may be made without the
approval of the stockholders of the Company.

 

(c)            To impose a mandatory holding period pursuant to which Employees
may not dispose of or transfer Shares purchased under the Plan for a period of
time determined by the Administrator in its discretion.

 

(d)            To construe and interpret the Plan and rights granted under it,
and to establish, amend and revoke rules and regulations for its administration.
The Administrator, in the exercise of this power, may correct any defect,
omission or inconsistency in the Plan, in a manner and to the extent it shall
deem necessary or expedient to make the Plan fully effective.

 

(e)            To amend, suspend or terminate the Plan as provided in
Article IX.

 

(f)            Generally, to exercise such powers and to perform such acts as
the Administrator deems necessary or expedient to promote the best interests of
the Company and its Subsidiaries and to carry out the intent that the Plan be
treated as an “employee stock purchase plan” within the meaning of Section 423
of the Code for the Section 423 Component.

 

(g)            The Administrator may adopt sub-plans applicable to particular
Designated Subsidiaries or locations, which sub-plans may be designed to be
outside the scope of Section 423 of the Code. The rules of such sub-plans may
take precedence over other provisions of this Plan, with the exception of
Section 3.1 hereof, but unless otherwise superseded by the terms of such
sub-plan, the provisions of this Plan shall govern the operation of such
sub-plan.

 

11.4            Designation of Subsidiaries. The Board or Administrator shall
designate from time to time the Subsidiaries that shall constitute Designated
Subsidiaries, and determine whether such Designated Subsidiaries shall
participate in the Section 423 Component or Non-Section 423 Component. The Board
or Administrator may designate a Subsidiary, or terminate the designation of a
Subsidiary, without the approval of the stockholders of the Company.

 

15

 

 

11.5            Decisions Binding. The Administrator’s interpretation of the
Plan, any rights granted pursuant to the Plan, any subscription agreement and
all decisions and determinations by the Administrator with respect to the Plan
are final, binding, and conclusive on all parties.

 

Article XII.
MISCELLANEOUS

 

12.1            Restriction upon Assignment. A right granted under the Plan
shall not be transferable other than by will or the applicable laws of descent
and distribution, and is exercisable during the Participant’s lifetime only by
the Participant. Except as provided in Section 12.4 hereof, a right under the
Plan may not be exercised to any extent except by the Participant. The Company
shall not recognize and shall be under no duty to recognize any assignment or
alienation of the Participant’s interest in the Plan, the Participant’s rights
under the Plan or any rights thereunder.

 

12.2            Rights as a Stockholder. With respect to Shares subject to a
right granted under the Plan, a Participant shall not be deemed to be a
stockholder of the Company, and the Participant shall not have any of the rights
or privileges of a stockholder, until such Shares have been issued to the
Participant or his or her nominee following exercise of the Participant’s rights
under the Plan. No adjustments shall be made for dividends (ordinary or
extraordinary, whether in cash securities, or other property) or distribution or
other rights for which the record date occurs prior to the date of such
issuance, except as otherwise expressly provided herein or as determined by the
Administrator.

 

12.3            Interest. No interest shall accrue on the payroll deductions or
contributions of a Participant under the Plan.

 

12.4            Designation of Beneficiary.

 

(a)            A Participant may, in the manner determined by the Administrator,
file a written designation of a beneficiary who is to receive any Shares and/or
cash, if any, from the Participant’s account under the Plan in the event of such
Participant’s death subsequent to a Purchase Date on which the Participant’s
rights are exercised but prior to delivery to such Participant of such Shares
and cash. In addition, a Participant may file a written designation of a
beneficiary who is to receive any cash from the Participant’s account under the
Plan in the event of such Participant’s death prior to exercise of the
Participant’s rights under the Plan. If the Participant is married and resides
in a community property state, a designation of a person other than the
Participant’s spouse as his or her beneficiary shall not be effective without
the prior written consent of the Participant’s spouse.

 

(b)            Such designation of beneficiary may be changed by the Participant
at any time by written notice to the Company. In the event of the death of a
Participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such Participant’s death, the Company shall
deliver such Shares and/or cash to the executor or administrator of the estate
of the Participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such Shares and/or cash to the spouse or to any one or more dependents or
relatives of the Participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.

 

16

 

  

12.5            Notices. All notices or other communications by a Participant to
the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

 

12.6            Equal Rights and Privileges. Subject to Section 5.7, all
Eligible Employees will have equal rights and privileges under the Section 423
Component so that the Section 423 Component of this Plan qualifies as an
“employee stock purchase plan” within the meaning of Section 423 of the Code.
Subject to Section 5.7, any provision of the Section 423 Component that is
inconsistent with Section 423 of the Code will, without further act or amendment
by the Company, the Board or the Administrator, be reformed to comply with the
equal rights and privileges requirement of Section 423 of the Code. Eligible
Employees participating in the Non-Section 423 Component need not have the same
rights and privileges as other Eligible Employees participating in the
Non-Section 423 Component or as Eligible Employees participating in the
Section 423 Component.

 

12.7            Use of Funds. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.

 

12.8            Reports. Statements of account shall be given to Participants at
least annually, which statements shall set forth the amounts of payroll
deductions, the Purchase Price, the number of Shares purchased and the remaining
cash balance, if any.

 

12.9            No Employment Rights. Nothing in the Plan shall be construed to
give any person (including any Eligible Employee or Participant) the right to
remain in the employ of the Company or any Parent or Subsidiary or affect the
right of the Company or any Parent or Subsidiary to terminate the employment of
any person (including any Eligible Employee or Participant) at any time, with or
without cause.

 

12.10            Notice of Disposition of Shares. Each Participant shall give
prompt notice to the Company of any disposition or other transfer of any Shares
purchased upon exercise of a right under the Section 423 Component of the Plan
if such disposition or transfer is made: (a) within two years from the
Enrollment Date of the Offering Period in which the Shares were purchased or
(b) within one year after the Purchase Date on which such Shares were purchased.
Such notice shall specify the date of such disposition or other transfer and the
amount realized, in cash, other property, assumption of indebtedness or other
consideration, by the Participant in such disposition or other transfer.

 

12.11            Governing Law. The Plan and any agreements hereunder shall be
administered, interpreted and enforced in accordance with the laws of the State
of Delaware, disregarding any state’s choice of law principles requiring the
application of a jurisdiction’s laws other than the State of Delaware.

 

17

 

 

12.12            Electronic Forms. To the extent permitted by Applicable Law and
in the discretion of the Administrator, an Eligible Employee may submit any form
or notice as set forth herein by means of an electronic form approved by the
Administrator. Before the commencement of an Offering Period, the Administrator
shall prescribe the time limits within which any such electronic form shall be
submitted to the Administrator with respect to such Offering Period in order to
be a valid election.

  

* * * * *

 

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BIOXCEL THERAPEUTICS, INC.
2020 EMPLOYEE STOCK PURCHASE PLAN
SUB-PLAN FOR INTERNATIONAL PARTICIPANTS

  

1.            Application. This Sub-Plan for International Participants in the
BioXcel Therapeutics, Inc. 2020 Employee Stock Purchase Plan (this “Sub-Plan”)
sets forth additional terms and conditions applicable to the rights granted to,
and the Shares purchased by, Eligible Employees in the countries set forth
below.

 

The Plan and this Sub-Plan are complimentary to each other and shall be deemed
as one. In any case of contradiction between the provisions of this Sub-Plan and
the Plan, the provisions set out in the Sub-Plan shall prevail. Any capitalized
terms used in this Sub-Plan but not defined shall have the meaning given to
those terms in the Plan.

 

2.            Global Provisions.

 

(a)            Data Protection. It shall be a term and condition for
participation in the Plan that a Participant explicitly and unambiguously
consent to the collection, use and transfer, in electronic or other form, of a
Participant’s personal “Data” (as defined below) by and among, as applicable,
the Company, any Subsidiary and a Participant’s employing entity (the
“Employer”), if different, and their affiliates (collectively, the “Company
Group”) for the exclusive purpose of implementing, administering and managing
the Participant’s participation in the Plan. The Company Group holds certain
personal information about the Participant, including, but not limited to, the
Participant’s name, home address and telephone number, e-mail address, date of
birth, employee identification number, NRIC or passport number or equivalent,
salary, nationality, job title, any shares of stock or directorships held in the
Company, details of all options or any other entitlement to shares of stock
awarded, canceled, exercised, vested, unvested or outstanding in the
Participant’s favor, for the purpose of implementing, administering and managing
the Plan (“Data”). Data will be transferred to such stock plan service providers
as may be selected by the Company which are assisting the Company with the
implementation, administration and management of the Plan. The recipients of the
Data may be located in the United States of America or elsewhere (and, if the
Participant is a resident of a member state of the European Union, may be
outside the European Economic Area) and that the recipient’s country (e.g., the
United States of America) may have different data privacy laws and protections
than the Participant’s country. The Participant may request a list with the
names and addresses of all recipients of the Data by contacting his or her local
human resources representative. Each Participant hereby authorizes the Company
Group and any other possible recipients which may assist the Company (presently
or in the future) with implementing, administering and managing the Plan to
receive, possess, use, retain and transfer the Data, in electronic or other
form, for the purposes of implementing, administering and managing the
Participant’s participation in the Plan. Data will be held only as long as is
necessary to implement, administer and manage the Participant’s participation in
the Plan. The Company may also make the Data available to public authorities
where required under locally applicable law. A Participant may, at any time,
view Data, request additional information about the storage and processing of
Data, require any necessary amendments to Data or refuse or withdraw the
consents herein, in any case, without cost, by contacting in writing the
Participant’s local human resources representative. A Participant’s refusal to
provide consent or withdrawal of consent may affect the Participant’s ability to
participate in the Plan. This section applies to information held, used or
disclosed in any medium.

 

19

 

  

(b)            Acknowledgment of Nature of Plan and Rights. In participating in
the Plan, each Participant acknowledges that:

 

(i)            for labor law purposes, the rights granted and the Shares
purchased under the Plan are an extraordinary item that do not constitute wages
of any kind for services of any kind rendered to the Company or the Employer,
and the award of rights is outside the scope of Participant’s service contract,
if any;

 

(ii)            for labor law purposes, the rights granted and the Shares
purchased under the Plan are not part of normal or expected wages or salary for
any purposes, including, but not limited to, calculation of any severance,
resignation, termination, redundancy, dismissal, end of service payments,
bonuses, holiday pay, long-service awards, pension or retirement benefits or
similar payments and in no event should be considered as compensation for, or
relating in any way to, past services for the Company, the Employer, its Parent,
or any Subsidiary or affiliate of the Company;

 

(iii)            the rights and the Shares purchased under the Plan are not
intended to replace any pension rights or compensation;

 

(iv)            neither the rights nor any provision of Plan or the policies
adopted pursuant to the Plan confer upon any Participant any right with respect
to service or continuation of current service and shall not be interpreted to
form a service contract or relationship with the Company or any Subsidiary or
affiliate;

 

(v)            the future value of the underlying Shares is unknown and cannot
be predicted with certainty;

 

(vi)           if the underlying Shares do not increase in value, the right may
have no value; and

 

(vii)          if a Participant acquires Shares, the value of the Shares
acquired upon purchase may increase or decrease in value, even below the
Purchase Price.

 

* * * * *

 

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