Exhibit 10.32

 

 

 

 

 

TITAN PHARMACEUTICALS, INC.

 

AMENDED AND RESTATED

 

2015 OMNIBUS EQUITY INCENTIVE PLAN

 

 

 

 

 

 

 

 

 

 

TITAN PHARMACEUTICALS, INC.

AMENDED AND RESTATED

 

2015 OMNIBUS EQUITY INCENTIVE PLAN

 

Article I
PURPOSE

 

The purpose of this Titan Pharmaceuticals, Inc. 2015 Omnibus Equity Incentive
Plan (the “Plan”) is to benefit Titan Pharmaceuticals, Inc., a Delaware
corporation (the “Company”) and its stockholders, by assisting the Company to
attract, retain and provide incentives to key employees and directors of, and
consultants to, the Company and its Affiliates, and to align the interests of
such service providers with those of the Company’s stockholders. Accordingly,
the Plan provides for the granting of Non-qualified Stock Options, Incentive
Stock Options, Restricted Stock Awards, Restricted Stock Unit Awards, Stock
Appreciation Rights, Performance Stock Awards, Performance Unit Awards,
Unrestricted Stock Awards, Distribution Equivalent Rights or any combination of
the foregoing.

Article II
DEFINITIONS

 

The following definitions shall be applicable throughout the Plan unless the
context otherwise requires:

 

2.1 “Affiliate” shall mean any corporation which, with respect to the Company,
is a “subsidiary corporation” within the meaning of Section 424(f) of the Code
or other entity in which the Company has a controlling interest in such entity
or another entity which is part of a chain of entities in which the Company or
each entity has a controlling interest in another entity in the unbroken chain
of entities ending with the applicable entity.

 

2.2 “Award” shall mean, individually or collectively, any Option, Restricted
Stock Award, Restricted Stock Unit Award, Performance Stock Award, Performance
Unit Award, Stock Appreciation Right, Distribution Equivalent Right or
Unrestricted Stock Award.

 

2.3 “Award Agreement” shall mean a written agreement between the Company and the
Holder with respect to an Award, setting forth the terms and conditions of the
Award.

 

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

 

2.5 “Base Value” shall have the meaning given to such term in Section 14.2.

 

2.6 “Cause” shall mean (i) if the Holder is a party to an employment or service
agreement with the Company or an Affiliate which agreement defines “Cause” (or a
similar term), “Cause” shall have the same meaning as provided for in such
agreement, or (ii) for a Holder who is not a party to such an agreement, “Cause”
shall mean termination by the Company or an Affiliate of the employment (or
other service relationship) of the Holder by reason of the Holder’s (A)
intentional failure to perform reasonably assigned duties, (B) dishonesty or
willful misconduct in the performance of the Holder’s duties, (C) involvement in
a transaction which is materially adverse to the Company or an Affiliate, (D)
breach of fiduciary duty involving personal profit, (E) willful violation of any
law, rule, regulation or court order (other than misdemeanor traffic violations
and misdemeanors not involving misuse or misappropriation of money or property),
(F) commission of an act of fraud or intentional misappropriation or conversion
of any asset or opportunity of the Company or an Affiliate, or (G) material
breach of any provision of the Plan or the Holder’s Award Agreement or any other
written agreement between the Holder and the Company or an Affiliate, in each
case as determined in good faith by the Board, the determination of which shall
be final, conclusive and binding on all parties.

 

 

 

 

2.7 “Change of Control” shall mean: (i) for a Holder who is a party to an
employment or consulting agreement with the Company or an Affiliate which
agreement defines “Change of Control” (or a similar term), “Change of Control”
shall have the same meaning as provided for in such agreement, or (ii) for a
Holder who is not a party to such an agreement, “Change of Control” shall mean
the satisfaction of any one or more of the following conditions (and the “Change
of Control” shall be deemed to have occurred as of the first day that any one or
more of the following conditions shall have been satisfied):

 

(a) Any person (as such term is used in paragraphs 13(d) and 14(d)(2) of the
Exchange Act, hereinafter in this definition, “Person”), other than the Company
or an Affiliate or an employee benefit plan of the Company or an Affiliate,
becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act),
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;

 

(b) The closing of a merger, consolidation or other business combination (a
“Business Combination”) other than a Business Combination in which holders of
the Shares immediately prior to the Business Combination have substantially the
same proportionate ownership of the common stock of the surviving corporation
immediately after the Business Combination as immediately before;

 

(c) The closing of an agreement for the sale or disposition of all or
substantially all of the Company’s assets to any entity that is not an
Affiliate;

 

(d) The approval by the holders of shares of Shares of a plan of complete
liquidation of the Company, other than a merger of the Company into any
subsidiary or a liquidation as a result of which persons who were stockholders
of the Company immediately prior to such liquidation have substantially the same
proportionate ownership of shares of common stock of the surviving corporation
immediately after such liquidation as immediately before; or

 

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(e) Within any twenty-four (24) month period, the Incumbent Directors shall
cease to constitute at least a majority of the Board or the board of directors
of any successor to the Company; provided, however, that any director elected to
the Board, or nominated for election, by a majority of the Incumbent Directors
then still in office, shall be deemed to be an Incumbent Director for purposes
of this paragraph (e), but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of an individual, entity or “group” other than the Board (including, but
not limited to, any such assumption that results from paragraphs (a), (b), (c),
or (d) of this definition).

 

2.8 “Code” shall mean the Internal Revenue Code of 1986, as amended. Reference
in the Plan to any section of the Code shall be deemed to include any amendments
or successor provisions to any section and any regulation under such section.

 

2.9 “Committee” shall mean a committee comprised of two (2) or more members of
the Board who are selected by the Board as provided in Section 4.1.

 

2.10 “Company” shall have the meaning given to such term in the introductory
paragraph, including any successor thereto.

 

2.11 “Consultant” shall mean any non-Employee (individual or entity) advisor to
the Company or an Affiliate who or which has contracted directly with the
Company or an Affiliate to render bona fide consulting or advisory services
thereto.

 

2.12 “Director” shall mean a member of the Board or a member of the board of
directors of an Affiliate, in either case, who is not an Employee.

 

2.13 “Distribution Equivalent Right” shall mean an Award granted under Article
XIII of the Plan which entitles the Holder to receive bookkeeping credits, cash
payments and/or Share distributions equal in amount to the distributions that
would have been made to the Holder had the Holder held a specified number of
Shares during the period the Holder held the Distribution Equivalent Right.

 

2.14 “Distribution Equivalent Right Award Agreement” shall mean a written
agreement between the Company and a Holder with respect to a Distribution
Equivalent Right Award.

 

2.15 “Effective Date” shall mean August 24, 2015 or such later date that the
Plan is approved by the stockholders of the Company.

 

2.16 “Employee” shall mean any employee, including any officer, of the Company
or an Affiliate.

 

2.17 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

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2.18 “Fair Market Value” shall mean, as of any specified date, the closing sales
price of the Shares for such date (or, in the event that the Shares are not
traded on such date, on the immediately preceding trading date) on the NASDAQ
Stock Market (“NASDAQ”), as reported by NASDAQ, or such other domestic or
foreign national securities exchange on which the Shares may be listed. If the
Shares are not listed on NASDAQ or on a national securities exchange, but are
quoted on the OTC Bulletin Board or by the National Quotation Bureau, the Fair
Market Value of the Shares shall be the mean of the highest bid and lowest asked
prices per Share for such date. If the Shares are not quoted or listed as set
forth above, Fair Market Value shall be determined by the Board in good faith by
any fair and reasonable means (which means may be set forth with greater
specificity in the applicable Award Agreement). The Fair Market Value of
property other than Shares shall be determined by the Board in good faith by any
fair and reasonable means consistent with the requirements of applicable law.

 

2.19 “Family Member” of an individual shall mean any child, stepchild,
grandchild, parent, stepparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships, any person sharing the Holder’s
household (other than a tenant or employee of the Holder), a trust in which such
persons have more than fifty percent (50%) of the beneficial interest, a
foundation in which such persons (or the Holder) control the management of
assets, and any other entity in which such persons (or the Holder) own more than
fifty percent (50%) of the voting interests.

 

2.20 “Holder” shall mean an Employee, Director or Consultant who has been
granted an Award or any such individual’s beneficiary, estate or representative,
who has acquired such Award in accordance with the terms of the Plan, as
applicable.

 

2.21 “Incentive Stock Option” shall mean an Option which is intended by the
Committee to constitute an “incentive stock option” and conforms to the
applicable provisions of Section 422 of the Code.

 

2.22 “Incumbent Director” shall mean, with respect to any period of time
specified under the Plan for purposes of determining whether or not a Change of
Control has occurred, the individuals who were members of the Board at the
beginning of such period.

 

2.23 “Non-qualified Stock Option” shall mean an Option which is not an Incentive
Stock Option or which is designated as an Incentive Stock Option but does not
meet the applicable requirements of Section 422 of the Code.

 

2.24 “Option” shall mean an Award granted under Article VII of the Plan of an
option to purchase Shares and shall include both Incentive Stock Options and
Non-qualified Stock Options.

 

2.25 “Option Agreement” shall mean a written agreement between the Company and a
Holder with respect to an Option.

 

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2.26 “Performance Criteria” shall mean the criteria selected by the Committee
for purposes of establishing the Performance Goal(s) for a Holder for a
Performance Period.

 

2.27 “Performance Goals” shall mean, for a Performance Period, the written goal
or goals established by the Committee for the Performance Period based upon the
Performance Criteria, which may be related to the performance of the Holder, the
Company or an Affiliate.

 

2.28 “Performance Period” shall mean one or more periods of time, which may be
of varying and overlapping durations, selected by the Committee, over which the
attainment of the Performance Goals shall be measured for purposes of
determining a Holder’s right to, and the payment of, a Qualified
Performance-Based Award.

 

2.29 “Performance Stock Award” or “Performance Stock” shall mean an Award
granted under Article XII of the Plan under which, upon the satisfaction of
predetermined Performance Goals, Shares are paid to the Holder.

 

2.30 “Performance Stock Agreement” shall mean a written agreement between the
Company and a Holder with respect to a Performance Stock Award.

 

2.31 “Performance Unit” shall mean a Unit awarded to a Holder pursuant to a
Performance Unit Award.

 

2.32 “Performance Unit Award” shall mean an Award granted under Article XI of
the Plan under which, upon the satisfaction of predetermined Performance Goals,
a cash payment shall be made to the Holder, based on the number of Units awarded
to the Holder.

 

2.33 “Performance Unit Agreement” shall mean a written agreement between the
Company and a Holder with respect to a Performance Unit Award.

 

2.34 “Plan” shall mean this Titan Pharmaceuticals 2015 Omnibus Equity Incentive
Plan, as amended from time to time, together with each of the Award Agreements
utilized hereunder.

 

2.35 “Qualified Performance-Based Award” shall mean an Award that is intended to
qualify as “performance-based” compensation under Section 162(m) of the Code.

 

2.36 “Restricted Stock Award” and “Restricted Stock” shall mean an Award granted
under Article VIII of the Plan of Shares, the transferability of which by the
Holder is subject to Restrictions.

 

2.37 “Restricted Stock Agreement” shall mean a written agreement between the
Company and a Holder with respect to a Restricted Stock Award.

 

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2.38 “Restricted Stock Unit Award” and “RSUs” shall refer to an Award granted
under Article X of the Plan under which, upon the satisfaction of predetermined
individual service-related vesting requirements, a cash payment shall be made to
the Holder, based on the number of Units awarded to the Holder.

 

2.39 “Restricted Stock Unit Agreement” shall mean a written agreement between
the Company and a Holder with respect to a Restricted Stock Award.

 

2.40 “Restriction Period” shall mean the period of time for which Shares subject
to a Restricted Stock Award shall be subject to Restrictions, as set forth in
the applicable Restricted Stock Agreement.

 

2.41 “Restrictions” shall mean the forfeiture, transfer and/or other
restrictions applicable to Shares awarded to an Employee, Director or Consultant
under the Plan pursuant to a Restricted Stock Award and set forth in a
Restricted Stock Agreement.

 

2.42 “Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Exchange Act, as such may be amended from time to
time, and any successor rule, regulation or statute fulfilling the same or a
substantially similar function.

 

2.43 “Shares” or “Stock” shall mean the common stock of the Company, par value
$0.001 per share.

 

2.44 “Stock Appreciation Right” or “SAR” shall mean an Award granted under
Article XIV of the Plan of a right, granted alone or in connection with a
related Option, to receive a payment equal to the increase in value of a
specified number of Shares between the date of Award and the date of exercise.

 

2.45 “Stock Appreciation Right Agreement” shall mean a written agreement between
the Company and a Holder with respect to a Stock Appreciation Right.

 

2.46 “Tandem Stock Appreciation Right” shall mean a Stock Appreciation Right
granted in connection with a related Option, the exercise of some or all of
which results in termination of the entitlement to purchase some or all of the
Shares under the related Option, all as set forth in Article XIV.

 

2.47 “Ten Percent Stockholder” shall mean an Employee who, at the time an Option
is granted to him or her, owns shares possessing more than ten percent (10%) of
the total combined voting power of all classes of shares of the Company or of
any parent corporation or subsidiary corporation thereof (both as defined in
Section 424 of the Code), within the meaning of Section 422(b)(6) of the Code.

 

2.48 “Termination of Service” shall mean a termination of a Holder’s employment
with, or status as a Director or Consultant of, the Company or an Affiliate, as
applicable, for any reason, including, without limitation, Total and Permanent
Disability or death, except as provided in Section 6.4. In the event Termination
of Service shall constitute a payment event with respect to any Award subject to
Code Section 409A, Termination of Service shall only be deemed to occur upon a
“separation from service” as such term is defined under Code Section 409A and
applicable authorities.

 

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2.49 “Total and Permanent Disability” of an individual shall mean the inability
of such individual to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than twelve (12) months, within the meaning of
Section 22(e)(3) of the Code.

 

2.50 “Unit” shall mean a bookkeeping unit, which represents such monetary amount
as shall be designated by the Committee in each Performance Unit Agreement, or
represents one Share for purposes of each Restricted Stock Unit Award.

 

2.51 “Unrestricted Stock Award” shall mean an Award granted under Article IX of
the Plan of Shares which are not subject to Restrictions.

 

2.52 “Unrestricted Stock Agreement” shall mean a written agreement between the
Company and a Holder with respect to an Unrestricted Stock Award.

 

Article III
EFFECTIVE DATE OF PLAN

 

The Plan shall be effective as of the Effective Date.

 

Article IV
ADMINISTRATION

 

4.1 Composition of Committee. The Plan shall be administered by the Committee,
which shall be appointed by the Board. If necessary, in the Board’s discretion,
to comply with Rule 16b-3 under the Exchange Act and Section 162(m) of the Code,
the Committee shall consist solely of two (2) or more Directors who are each (i)
“outside directors” within the meaning of Section 162(m) of the Code (“Outside
Directors”), (ii) “non-employee directors” within the meaning of Rule 16b-3
(“Non-Employee Directors”) and (iii) “independent” for purposes of any
applicable listing requirements; provided, however, that the Board or the
Committee may delegate to a committee of one or more members of the Board who
are not (x) Outside Directors, the authority to grant Awards to eligible persons
who are not (A) then “covered employees” within the meaning of Section 162(m) of
the Code and are not expected to be “covered employees” at the time of
recognition of income resulting from such Award, or (B) persons with respect to
whom the Company wishes to comply with the requirements of Section 162(m) of the
Code, and/or (y) Non-Employee Directors, the authority to grant Awards to
eligible persons who are not then subject to the requirements of Section 16 of
the Exchange Act. If a member of the Committee shall be eligible to receive an
Award under the Plan, such Committee member shall have no authority hereunder
with respect to his or her own Award.

 

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4.2 Powers. Subject to the other provisions of the Plan, the Committee shall
have the sole authority, in its discretion, to make all determinations under the
Plan, including but not limited to (i) determining which Employees, Directors or
Consultants shall receive an Award, (ii) the time or times when an Award shall
be made (the date of grant of an Award shall be the date on which the Award is
awarded by the Committee), (iii) what type of Award shall be granted, (iv) the
term of an Award, (v) the date or dates on which an Award vests (including
acceleration of vesting), (vi) the form of any payment to be made pursuant to an
Award, (vii) the terms and conditions of an Award (including the forfeiture of
the Award, and/or any financial gain, if the Holder of the Award violates any
applicable restrictive covenant thereof), (viii) the Restrictions under a
Restricted Stock Award, (ix) the number of Shares which may be issued under an
Award, (x) Performance Goals applicable to any Award and certification of the
achievement of such goals, and (xi) the waiver of any Restrictions or
Performance Goals, subject in all cases to compliance with applicable laws. In
making such determinations the Committee may take into account the nature of the
services rendered by the respective Employees, Directors and Consultants, their
present and potential contribution to the Company’s (or the Affiliate’s) success
and such other factors as the Committee in its discretion may deem relevant.

 

4.3 Additional Powers. The Committee shall have such additional powers as are
delegated to it under the other provisions of the Plan. Subject to the express
provisions of the Plan, the Committee is authorized to construe the Plan and the
respective Award Agreements executed hereunder, to prescribe such rules and
regulations relating to the Plan as it may deem advisable to carry out the
intent of the Plan, to determine the terms, restrictions and provisions of each
Award and to make all other determinations necessary or advisable for
administering the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in any Award Agreement in the manner and
to the extent the Committee shall deem necessary, appropriate or expedient to
carry it into effect. The determinations of the Committee on the matters
referred to in this Article IV shall be conclusive and binding on the Company
and all Holders.

 

4.4 Committee Action. Subject to compliance with all applicable laws, action by
the Committee shall require the consent of a majority of the members of the
Committee, expressed either orally at a meeting of the Committee or in writing
in the absence of a meeting. No member of the Committee shall have any liability
for any good faith action, inaction or determination in connection with the
Plan.

 

Article V
SHARES SUBJECT TO PLAN AND LIMITATIONS THEREON

 

5.1 Authorized Shares and Award Limits. The Committee may from time to time
grant Awards to one or more Employees, Directors and/or Consultants determined
by it to be eligible for participation in the Plan in accordance with the
provisions of Article VI. Subject to Article XV, the aggregate number of Shares
that may be issued under the Plan shall not exceed Two Million Five Hundred
Thousand (2,500,000) Shares. Shares shall be deemed to have been issued under
the Plan solely to the extent actually issued and delivered pursuant to an
Award. To the extent that an Award lapses, expires, is canceled, is terminated
unexercised or ceases to be exercisable for any reason, or the rights of its
Holder terminate, any Shares subject to such Award shall again be available for
the grant of a new Award. Notwithstanding any provision in the Plan to the
contrary, the maximum number of Shares that may be subject to Awards granted to
any one person during any calendar year, shall be Five Hundred Thousand
(500,000) Shares (subject to adjustment in the same manner as provided in
Article XV with respect to Shares subject to Awards then outstanding). The
limitation set forth in the preceding sentence shall be applied in a manner
which shall permit compensation generated in connection with the exercise of
Options or Stock Appreciation Rights to constitute “performance-based”
compensation for purposes of Section 162(m) of the Code, including, but not
limited to, counting against such maximum number of Shares, to the extent
required under Section 162(m) of the Code, any Shares subject to Options or
Stock Appreciation Rights that are canceled or re-priced.

 

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5.2 Types of Shares . The Shares to be issued pursuant to the grant or exercise
of an Award may consist of authorized but unissued Shares, Shares purchased on
the open market or Shares previously issued and outstanding and reacquired by
the Company.

 

Article VI
ELIGIBILITY AND TERMINATION OF SERVICE

 

6.1 Eligibility. Awards made under the Plan may be granted solely to individuals
or entities who, at the time of grant, are Employees, Directors or Consultants.
An Award may be granted on more than one occasion to the same Employee, Director
or Consultant, and, subject to the limitations set forth in the Plan, such Award
may include, a Non-qualified Stock Option, a Restricted Stock Award, a
Restricted Stock Unit Award, an Unrestricted Stock Award, a Distribution
Equivalent Right Award, a Performance Stock Award, a Performance Unit Award, a
Stock Appreciation Right, a Tandem Stock Appreciation Right, or any combination
thereof, and solely for Employees, an Incentive Stock Option.

 

6.2 Termination of Service. Except to the extent inconsistent with the terms of
the applicable Award Agreement and/or the provisions of Section 6.3 or 6.4, the
following terms and conditions shall apply with respect to a Holder’s
Termination of Service with the Company or an Affiliate, as applicable:

 

(a) The Holder’s rights, if any, to exercise any then exercisable Options and/or
Stock Appreciation Rights shall terminate:

 

(i) If such termination is for a reason other than the Holder’s Total and
Permanent Disability or death, ninety (90) days after the date of such
Termination of Service;

 

(ii) If such termination is on account of the Holder’s Total and Permanent
Disability, one (1) year after the date of such Termination of Service; or

 

(iii) If such termination is on account of the Holder’s death, one (1) year
after the date of the Holder’s death.

 

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Upon such applicable date the Holder (and such Holder’s estate, designated
beneficiary or other legal representative) shall forfeit any rights or interests
in or with respect to any such Options and Stock Appreciation Rights.
Notwithstanding the foregoing, the Committee, in its sole discretion, may
provide for a different time period in the Award Agreement, or may extend the
time period, following a Termination of Service, during which the Holder has the
right to exercise any vested Non-qualified Stock Option or Stock Appreciation
Right, which time period may not extend beyond the expiration date of the Award
term.

 

(b) In the event of a Holder’s Termination of Service for any reason prior to
the actual or deemed satisfaction and/or lapse of the Restrictions, vesting
requirements, terms and conditions applicable to a Restricted Stock Award and/or
Restricted Stock Unit Award, such Restricted Stock and/or RSUs shall immediately
be canceled, and the Holder (and such Holder’s estate, designated beneficiary or
other legal representative) shall forfeit any rights or interests in and with
respect to any such Restricted Stock and/or RSUs. Notwithstanding the
immediately preceding sentence, the Committee, in its sole discretion, may
determine, prior to or within thirty (30) days after the date of such
Termination of Service that all or a portion of any such Holder’s Restricted
Stock and/or RSUs shall not be so canceled and forfeited.

 

6.3 Special Termination Rule. Except to the extent inconsistent with the terms
of the applicable Award Agreement, and notwithstanding anything to the contrary
contained in this Article VI, if a Holder’s employment with, or status as a
Director of, the Company or an Affiliate shall terminate, and if, within ninety
(90) days of such termination, such Holder shall become a Consultant, such
Holder’s rights with respect to any Award or portion thereof granted thereto
prior to the date of such termination may be preserved, if and to the extent
determined by the Committee in its sole discretion, as if such Holder had been a
Consultant for the entire period during which such Award or portion thereof had
been outstanding. Should the Committee effect such determination with respect to
such Holder, for all purposes of the Plan, such Holder shall not be treated as
if his or her employment or Director status had terminated until such time as
his or her Consultant status shall terminate, in which case his or her Award, as
it may have been reduced in connection with the Holder’s becoming a Consultant,
shall be treated pursuant to the provisions of Section 6.2, provided, however,
that any such Award which is intended to be an Incentive Stock Option shall,
upon the Holder’s no longer being an Employee, automatically convert to a
Non-qualified Stock Option. Should a Holder’s status as a Consultant terminate,
and if, within ninety (90) days of such termination, such Holder shall become an
Employee or a Director, such Holder’s rights with respect to any Award or
portion thereof granted thereto prior to the date of such termination may be
preserved, if and to the extent determined by the Committee in its sole
discretion, as if such Holder had been an Employee or a Director, as applicable,
for the entire period during which such Award or portion thereof had been
outstanding, and, should the Committee effect such determination with respect to
such Holder, for all purposes of the Plan, such Holder shall not be treated as
if his or her Consultant status had terminated until such time as his or her
employment with the Company or an Affiliate, or his or her Director status, as
applicable, shall terminate, in which case his or her Award shall be treated
pursuant to the provisions of Section 6.2.

 

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6.4 Termination of Service for Cause. Notwithstanding anything in this
Article VI or elsewhere in the Plan to the contrary, and unless a Holder’s Award
Agreement specifically provides otherwise, in the event of a Holder’s
Termination of Service for Cause, all of such Holder’s then outstanding Awards
shall expire immediately and be forfeited in their entirety upon such
Termination of Service.

 

Article VII
OPTIONS

 

7.1 Option Period. The term of each Option shall be as specified in the Option
Agreement; provided, however, that except as set forth in Section 7.3, no Option
shall be exercisable after the expiration of ten (10) years from the date of its
grant.

 

7.2 Limitations on Exercise of Option. An Option shall be exercisable in whole
or in such installments and at such times as specified in the Option Agreement.

 

7.3 Special Limitations on Incentive Stock Options. To the extent that the
aggregate Fair Market Value (determined at the time the respective Incentive
Stock Option is granted) of Shares with respect to which Incentive Stock Options
are exercisable for the first time by an individual during any calendar year
under all plans of the Company and any parent corporation or subsidiary
corporation thereof (both as defined in Section 424 of the Code) which provide
for the grant of Incentive Stock Options exceeds One Hundred Thousand Dollars
($100,000) (or such other individual limit as may be in effect under the Code on
the date of grant), the portion of such Incentive Stock Options that exceeds
such threshold shall be treated as Non-qualified Stock Options. The Committee
shall determine, in accordance with applicable provisions of the Code, Treasury
Regulations and other administrative pronouncements, which of a Holder’s
Options, which were intended by the Committee to be Incentive Stock Options when
granted to the Holder, will not constitute Incentive Stock Options because of
such limitation, and shall notify the Holder of such determination as soon as
practicable after such determination. No Incentive Stock Option shall be granted
to an Employee if, at the time the Incentive Stock Option is granted, such
Employee is a Ten Percent Stockholder, unless (i) at the time such Incentive
Stock Option is granted the Option price is at least one hundred ten percent
(110%) of the Fair Market Value of the Shares subject to the Incentive Stock
Option, and (ii) such Incentive Stock Option by its terms is not exercisable
after the expiration of five (5) years from the date of grant. No Incentive
Stock Option shall be granted more than ten (10) years from the Effective Date.
The designation by the Committee of an Option as an Incentive Stock Option shall
not guarantee the Holder that the Option will satisfy the applicable
requirements for “incentive stock option” status under Section 422 of the Code.

 

7.4 Option Agreement. Each Option shall be evidenced by an Option Agreement in
such form and containing such provisions not inconsistent with the other
provisions of the Plan as the Committee from time to time shall approve,
including, but not limited to, provisions intended to qualify an Option as an
Incentive Stock Option. An Option Agreement may provide for the payment of the
Option price, in whole or in part, by the delivery of a number of Shares (plus
cash if necessary) that have been owned by the Holder for at least six (6)
months and having a Fair Market Value equal to such Option price, or such other
forms or methods as the Committee may determine from time to time, in each case,
subject to such rules and regulations as may be adopted by the Committee. Each
Option Agreement shall, solely to the extent inconsistent with the provisions of
Sections 6.2, 6.3, and 6.4, as applicable, specify the effect of Termination of
Service on the exercisability of the Option. Moreover, without limiting the
generality of the foregoing, a Non-qualified Stock Option Agreement may provide
for a “cashless exercise” of the Option, in whole or in part, by
(a) establishing procedures whereby the Holder, by a properly-executed written
notice, directs (i) an immediate market sale or margin loan as to all or a part
of Shares to which he is entitled to receive upon exercise of the Option,
pursuant to an extension of credit by the Company to the Holder of the Option
price, (ii) the delivery of the Shares from the Company directly to a brokerage
firm and (iii) the delivery of the Option price from sale or margin loan
proceeds from the brokerage firm directly to the Company, or (b) reducing the
number of Shares to be issued upon exercise of the Option by the number of such
Shares having an aggregate Fair Market Value equal to the Option price (or
portion thereof to be so paid) as of the date of the Option’s exercise. An
Option Agreement may also include provisions relating to: (i) subject to the
provisions hereof, accelerated vesting of Options, including but not limited to,
upon the occurrence of a Change of Control, (ii) tax matters (including
provisions covering any applicable Employee wage withholding requirements and
requiring additional “gross-up” payments to Holders to meet any excise taxes or
other additional income tax liability imposed as a result of a payment made upon
a Change of Control resulting from the operation of the Plan or of such Option
Agreement) and (iii) any other matters not inconsistent with the terms and
provisions of the Plan that the Committee shall in its sole discretion
determine. The terms and conditions of the respective Option Agreements need not
be identical.

 

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Titan Pharmaceuticals, Inc. 2015 Omnibus Equity Incentive Plan

 

7.5 Option Price and Payment. The price at which an Share may be purchased upon
exercise of an Option shall be determined by the Committee; provided, however,
that such Option price (i) shall not be less than the Fair Market Value of an
Share on the date such Option is granted (or 110% of Fair Market Value for an
Incentive Stock Option held by Ten Percent Stockholder, as provided in Section
7.3), and (ii) shall be subject to adjustment as provided in Article XV. The
Option or portion thereof may be exercised by delivery of an irrevocable notice
of exercise to the Company. The Option price for the Option or portion thereof
shall be paid in full in the manner prescribed by the Committee as set forth in
the Plan and the applicable Option Agreement, which manner, with the consent of
the Committee, may include the withholding of Shares otherwise issuable in
connection with the exercise of the Option. Separate share certificates shall be
issued by the Company for those Shares acquired pursuant to the exercise of an
Incentive Stock Option and for those Shares acquired pursuant to the exercise of
a Non-qualified Stock Option.

 

7.6 Stockholder Rights and Privileges. The Holder of an Option shall be entitled
to all the privileges and rights of a stockholder of the Company solely with
respect to such Shares as have been purchased under the Option and for which
share certificates have been registered in the Holder’s name.

 

7.7 Options and Rights in Substitution for Stock or Options Granted by Other
Corporations. Options may be granted under the Plan from time to time in
substitution for stock options held by individuals employed by entities who
become Employees, Directors or Consultants as a result of a merger or
consolidation of the employing entity with the Company or any Affiliate, or the
acquisition by the Company or an Affiliate of the assets of the employing
entity, or the acquisition by the Company or an Affiliate of stock or shares of
the employing entity with the result that such employing entity becomes an
Affiliate.

 

7.8 Prohibition Against Re-Pricing. Except to the extent (i) approved in advance
by holders of a majority of the shares of the Company entitled to vote generally
in the election of directors, or (ii) as a result of any Change of Control or
any adjustment as provided in Article XV, the Committee shall not have the power
or authority to reduce, whether through amendment or otherwise, the exercise
price under any outstanding Option or Stock Appreciation Right, or to grant any
new Award or make any payment of cash in substitution for or upon the
cancellation of Options and/or Stock Appreciation Rights previously granted.

 

Article VIII
RESTRICTED STOCK AWARDS

 

8.1 Award. A Restricted Stock Award shall constitute an Award of Shares to the
Holder as of the date of the Award which are subject to a “substantial risk of
forfeiture” as defined under Section 83 of the Code during the specified
Restriction Period. At the time a Restricted Stock Award is made, the Committee
shall establish the Restriction Period applicable to such Award. Each Restricted
Stock Award may have a different Restriction Period, in the discretion of the
Committee. The Restriction Period applicable to a particular Restricted Stock
Award shall not be changed except as permitted by Section 8.2.

 

8.2 Terms and Conditions. At the time any Award is made under this Article VIII,
the Company and the Holder shall enter into a Restricted Stock Agreement setting
forth each of the matters contemplated thereby and such other matters as the
Committee may determine to be appropriate. Shares awarded pursuant to a
Restricted Stock Award shall be represented by a share certificate registered in
the name of the Holder of such Restricted Stock Award. If provided for under the
Restricted Stock Agreement, the Holder shall have the right to vote Shares
subject thereto and to enjoy all other stockholder rights, including the
entitlement to receive dividends on the Shares during the Restriction Period,
except that (i) the Holder shall not be entitled to delivery of the share
certificate until the Restriction Period shall have expired, (ii) the Company
shall retain custody of the share certificate during the Restriction Period
(with a share power endorsed by the Holder in blank), (iii) the Holder may not
sell, transfer, pledge, exchange, hypothecate or otherwise dispose of the Shares
during the Restriction Period and (iv) a breach of the terms and conditions
established by the Committee pursuant to the Restricted Stock Agreement shall
cause a forfeiture of the Restricted Stock Award. At the time of such Award, the
Committee may, in its sole discretion, prescribe additional terms and conditions
or restrictions relating to Restricted Stock Awards, including, but not limited
to, rules pertaining to the effect of Termination of Service prior to expiration
of the Restriction Period. Such additional terms, conditions or restrictions
shall, to the extent inconsistent with the provisions of Sections 6.2, 6.3 and
6.4, as applicable, be set forth in a Restricted Stock Agreement made in
conjunction with the Award. Such Restricted Stock Agreement may also include
provisions relating to: (i) subject to the provisions hereof, accelerated
vesting of Awards, including but not limited to accelerated vesting upon the
occurrence of a Change of Control, (ii) tax matters (including provisions
covering any applicable Employee wage withholding requirements and requiring
additional “gross-up” payments to Holders to meet any excise taxes or other
additional income tax liability imposed as a result of a payment made in
connection with a Change of Control resulting from the operation of the Plan or
of such Restricted Stock Agreement) and (iii) any other matters not inconsistent
with the terms and provisions of the Plan that the Committee shall in its sole
discretion determine. The terms and conditions of the respective Restricted
Stock Agreements need not be identical. All Shares delivered to a Holder as part
of a Restricted Stock Award shall be delivered and reported by the Company or
the Affiliate, as applicable, to the Holder at the time of vesting.

 

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8.3 Payment for Restricted Stock. The Committee shall determine the amount and
form of any payment from a Holder for Shares received pursuant to a Restricted
Stock Award, if any, provided that in the absence of such a determination, a
Holder shall not be required to make any payment for Shares received pursuant to
a Restricted Stock Award, except to the extent otherwise required by law.

 

Article IX
UNRESTRICTED STOCK AWARDS

 

9.1 Award. Shares may be awarded (or sold) to Employees, Directors or
Consultants under the Plan which are not subject to Restrictions of any kind, in
consideration for past services rendered thereby to the Company or an Affiliate
or for other valid consideration.

 

9.2 Terms and Conditions. At the time any Award is made under this Article IX,
the Company and the Holder shall enter into an Unrestricted Stock Agreement
setting forth each of the matters contemplated hereby and such other matters as
the Committee may determine to be appropriate.

 

9.3 Payment for Unrestricted Stock. The Committee shall determine the amount and
form of any payment from a Holder for Shares received pursuant to an
Unrestricted Stock Award, if any, provided that in the absence of such a
determination, a Holder shall not be required to make any payment for Shares
received pursuant to an Unrestricted Stock Award, except to the extent otherwise
required by law.

 

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Article X
RESTRICTED STOCK UNIT AWARDS

 

10.1 Award. A Restricted Stock Unit Award shall constitute a promise to grant
Shares (or cash equal to the Fair Market Value of Shares) to the Holder at the
end of a specified Restriction Period. At the time a Restricted Stock Unit Award
is made, the Committee shall establish the Restriction Period applicable to such
Award. Each Restricted Stock Unit Award may have a different Restriction Period,
in the discretion of the Committee. A Restricted Stock Unit shall not constitute
an equity interest in the Company and shall not entitle the Holder to voting
rights, dividends or any other rights associated with ownership of Shares prior
to the time the Holder shall receive a distribution of Shares pursuant to
Section 10.3.

 

10.2 Terms and Conditions. At the time any Award is made under this Article X,
the Company and the Holder shall enter into a Restricted Stock Unit Agreement
setting forth each of the matters contemplated thereby and such other matters as
the Committee may determine to be appropriate. The Restricted Stock Unit
Agreement shall set forth the individual service-based vesting requirement which
the Holder would be required to satisfy before the Holder would become entitled
to distribution pursuant to Section 10.3 and the number of Units awarded to the
Holder. Such conditions shall be sufficient to constitute a “substantial risk of
forfeiture” as such term is defined under Section 409A of the Code. At the time
of such Award, the Committee may, in its sole discretion, prescribe additional
terms and conditions or restrictions relating to Restricted Stock Unit Awards in
the Restricted Stock Unit Agreement, including, but not limited to, rules
pertaining to the effect of Termination of Service prior to expiration of the
applicable vesting period. The terms and conditions of the respective Restricted
Stock Unit Agreements need not be identical.

 

10.3 Distributions of Shares. The Holder of a Restricted Stock Unit shall be
entitled to receive a cash payment equal to the Fair Market Value of an Share,
or one Share, as determined in the sole discretion of the Committee and as set
forth in the Restricted Stock Unit Agreement, for each Restricted Stock Unit
subject to such Restricted Stock Unit Award, if the Holder satisfies the
applicable vesting requirement. Such distribution shall be made no later than by
the fifteenth (15th) day of the third (3rd) calendar month next following the
end of the calendar year in which the Restricted Stock Unit first becomes vested
(i.e., no longer subject to a “substantial risk of forfeiture”).

 

Article XI
PERFORMANCE UNIT AWARDS

 

11.1 Award. A Performance Unit Award shall constitute an Award under which, upon
the satisfaction of predetermined individual and/or Company (and/or Affiliate)
Performance Goals based on selected Performance Criteria, a cash payment shall
be made to the Holder, based on the number of Units awarded to the Holder. At
the time a Performance Unit Award is made, the Committee shall establish the
Performance Period and applicable Performance Goals. Each Performance Unit Award
may have different Performance Goals, in the discretion of the Committee. A
Performance Unit Award shall not constitute an equity interest in the Company
and shall not entitle the Holder to voting rights, dividends or any other rights
associated with ownership of Shares.

 

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11.2 Terms and Conditions. At the time any Award is made under this Article XI,
the Company and the Holder shall enter into a Performance Unit Agreement setting
forth each of the matters contemplated thereby and such other matters as the
Committee may determine to be appropriate. The Committee shall set forth in the
applicable Performance Unit Agreement the Performance Period, Performance
Criteria and Performance Goals which the Holder and/or the Company would be
required to satisfy before the Holder would become entitled to payment pursuant
to Section 11.3, the number of Units awarded to the Holder and the dollar value
or formula assigned to each such Unit. Such payment shall be subject to a
“substantial risk of forfeiture” under Section 409A of the Code. At the time of
such Award, the Committee may, in its sole discretion, prescribe additional
terms and conditions or restrictions relating to Performance Unit Awards,
including, but not limited to, rules pertaining to the effect of Termination of
Service prior to expiration of the applicable performance period. The terms and
conditions of the respective Performance Unit Agreements need not be identical.

 

11.3 Payments. The Holder of a Performance Unit shall be entitled to receive a
cash payment equal to the dollar value assigned to such Unit under the
applicable Performance Unit Agreement if the Holder and/or the Company satisfy
(or partially satisfy, if applicable under the applicable Performance Unit
Agreement) the Performance Goals set forth in such Performance Unit Agreement.
If necessary to satisfy the requirements of Code Section 162(m), if applicable,
the achievement of such Performance Goals shall be certified in writing by the
Committee prior to any payment. All payments shall be made no later than by the
fifteenth (15th) day of the third (3rd) calendar month next following the end of
the Company’s fiscal year to which such performance goals and objectives relate.

 

Article XII
PERFORMANCE STOCK AWARDS

 

12.1 Award. A Performance Stock Award shall constitute a promise to grant Shares
(or cash equal to the Fair Market Value of Shares) to the Holder at the end of a
specified Performance Period subject to achievement of specified Performance
Goals. At the time a Performance Stock Award is made, the Committee shall
establish the Performance Period and applicable Performance Goals based on
selected Performance Criteria. Each Performance Stock Award may have different
Performance Goals, in the discretion of the Committee. A Performance Stock Award
shall not constitute an equity interest in the Company and shall not entitle the
Holder to voting rights, dividends or any other rights associated with ownership
of Shares unless and until the Holder shall receive a distribution of Shares
pursuant to Section 11.3.

 

12.2 Terms and Conditions. At the time any Award is made under this Article XII,
the Company and the Holder shall enter into a Performance Stock Agreement
setting forth each of the matters contemplated thereby and such other matters as
the Committee may determine to be appropriate. The Committee shall set forth in
the applicable Performance Stock Agreement the Performance Period, selected
Performance Criteria and Performance Goals which the Holder and/or the Company
would be required to satisfy before the Holder would become entitled to the
receipt of Shares pursuant to such Holder’s Performance Stock Award and the
number of Shares subject to such Performance Stock Award. Such distribution
shall be subject to a “substantial risk of forfeiture” under Section 409A of the
Code. If such Performance Goals are achieved, the distribution of Shares (or the
payment of cash, as determined in the sole discretion of the Committee), shall
be made no later than by the fifteenth (15th) day of the third (3rd) calendar
month next following the end of the Company’s fiscal year to which such goals
and objectives relate. At the time of such Award, the Committee may, in its sole
discretion, prescribe additional terms and conditions or restrictions relating
to Performance Stock Awards, including, but not limited to, rules pertaining to
the effect of the Holder’s Termination of Service prior to the expiration of the
applicable performance period. The terms and conditions of the respective
Performance Stock Agreements need not be identical.

 

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Titan Pharmaceuticals, Inc. 2015 Omnibus Equity Incentive Plan

 

12.3 Distributions of Shares. The Holder of a Performance Stock Award shall be
entitled to receive a cash payment equal to the Fair Market Value of a Share, or
one Share, as determined in the sole discretion of the Committee, for each
Performance Stock Award subject to such Performance Stock Agreement, if the
Holder satisfies the applicable vesting requirement. If necessary to satisfy the
requirements of Code Section 162(m), if applicable, the achievement of such
Performance Goals shall be certified in writing by the Committee prior to any
payment. Such distribution shall be made no later than by the fifteenth (15th)
day of the third (3rd) calendar month next following the end of the Company’s
fiscal year to which such performance goals and objectives relate.

 

Article XIII
DISTRIBUTION EQUIVALENT RIGHTS

 

13.1 Award. A Distribution Equivalent Right shall entitle the Holder to receive
bookkeeping credits, cash payments and/or Share distributions equal in amount to
the distributions that would have been made to the Holder had the Holder held a
specified number of Shares during the specified period of the Award.

 

13.2 Terms and Conditions. At the time any Award is made under this Article
XIII, the Company and the Holder shall enter into a Distribution Equivalent
Rights Award Agreement setting forth each of the matters contemplated thereby
and such other matters as the Committee may determine to be appropriate. The
Committee shall set forth in the applicable Distribution Equivalent Rights Award
Agreement the terms and conditions, if any, including whether the Holder is to
receive credits currently in cash, is to have such credits reinvested (at Fair
Market Value determined as of the date of reinvestment) in additional Shares or
is to be entitled to choose among such alternatives. Such receipt shall be
subject to a “substantial risk of forfeiture” under Section 409A of the Code
and, if such Award becomes vested, the distribution of such cash or Shares shall
be made no later than by the fifteenth (15th) day of the third (3rd) calendar
month next following the end of the Company’s fiscal year in which the Holder’s
interest in the Award vests. Distribution Equivalent Rights Awards may be
settled in cash or in Shares, as set forth in the applicable Distribution
Equivalent Rights Award Agreement. A Distribution Equivalent Rights Award may,
but need not be, awarded in tandem with another Award (other than an Option or a
SAR), whereby, if so awarded, such Distribution Equivalent Rights Award shall
expire, terminate or be forfeited by the Holder, as applicable, under the same
conditions as under such other Award.

 

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13.3 Interest Equivalents. The Distribution Equivalent Rights Award Agreement
for a Distribution Equivalent Rights Award may provide for the crediting of
interest on a Distribution Rights Award to be settled in cash at a future date
(but in no event later than by the fifteenth (15th) day of the third (3rd)
calendar month next following the end of the Company’s fiscal year in which such
interest is credited and vested), at a rate set forth in the applicable
Distribution Equivalent Rights Award Agreement, on the amount of cash payable
thereunder.

 

Article XIV
STOCK APPRECIATION RIGHTS

 

14.1 Award. A Stock Appreciation Right shall constitute a right, granted alone
or in connection with a related Option, to receive a payment equal to the
increase in value of a specified number of Shares between the date of Award and
the date of exercise.

 

14.2 Terms and Conditions. At the time any Award is made under this Article XIV,
the Company and the Holder shall enter into a Stock Appreciation Right Agreement
setting forth each of the matters contemplated thereby and such other matters as
the Committee may determine to be appropriate. The Committee shall set forth in
the applicable Stock Appreciation Right Agreement the terms and conditions of
the Stock Appreciation Right, including (i) the base value (the “Base Value”)
for the Stock Appreciation Right, which shall be not less than the Fair Market
Value of a Share on the date of grant of the Stock Appreciation Right, (ii) the
number of Shares subject to the Stock Appreciation Right, (iii) the period
during which the Stock Appreciation Right may be exercised; provided, however,
that no Stock Appreciation Right shall be exercisable after the expiration of
ten (10) years from the date of its grant, and (iv) any other special rules
and/or requirements which the Committee imposes upon the Stock Appreciation
Right. Upon the exercise of some or all of the portion of a Stock Appreciation
Right, the Holder shall receive a payment from the Company, in cash or in the
form of Shares having an equivalent Fair Market Value or in a combination of
both, as determined in the sole discretion of the Committee, equal to the
product of:

 

(a) The excess of (i) the Fair Market Value of an Share on the date of exercise,
over (ii) the Base Value, multiplied by,

 

(b) The number of Shares with respect to which the Stock Appreciation Right is
exercised.

 

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14.3 Tandem Stock Appreciation Rights. If the Committee grants a Stock
Appreciation Right which is intended to be a Tandem Stock Appreciation Right,
the Tandem Stock Appreciation Right shall be granted at the same time as the
related Option, and the following special rules shall apply:

 

(a) The Base Value shall be equal to or greater than the per Share exercise
price under the related Option;

 

(b) The Tandem Stock Appreciation Right may be exercised for all or part of the
Shares which are subject to the related Option, but solely upon the surrender by
the Holder of the Holder’s right to exercise the equivalent portion of the
related Option (and when a Share is purchased under the related Option, an
equivalent portion of the related Tandem Stock Appreciation Right shall be
canceled);

 

(c) The Tandem Stock Appreciation Right shall expire no later than the date of
the expiration of the related Option;

 

(d) The value of the payment with respect to the Tandem Stock Appreciation Right
may be no more than one hundred percent (100%) of the difference between the per
Share exercise price under the related Option and the Fair Market Value of the
Shares subject to the related Option at the time the Tandem Stock Appreciation
Right is exercised, multiplied by the number of the Shares with respect to which
the Tandem Stock Appreciation Right is exercised; and

 

(e) The Tandem Stock Appreciation Right may be exercised solely when the Fair
Market Value of the Shares subject to the related Option exceeds the per Share
exercise price under the related Option.

 

Article XV
RECAPITALIZATION OR REORGANIZATION

 

15.1 Adjustments to Shares. The shares with respect to which Awards may be
granted under the Plan are Shares as presently constituted; provided, however,
that if, and whenever, prior to the expiration or distribution to the Holder of
Shares underlying an Award theretofore granted, the Company shall effect a
subdivision or consolidation of the Shares or the payment of an Share dividend
on Shares without receipt of consideration by the Company, the number of Shares
with respect to which such Award may thereafter be exercised or satisfied, as
applicable, (i) in the event of an increase in the number of outstanding Shares,
shall be proportionately increased, and the purchase price per Share shall be
proportionately reduced, and (ii) in the event of a reduction in the number of
outstanding Shares, shall be proportionately reduced, and the purchase price per
Share shall be proportionately increased. Notwithstanding the foregoing or any
other provision of this Article XV, any adjustment made with respect to an Award
(x) which is an Incentive Stock Option, shall comply with the requirements of
Section 424(a) of the Code, and in no event shall any adjustment be made which
would render any Incentive Stock Option granted under the Plan to be other than
an “incentive stock option” for purposes of Section 422 of the Code, and (y)
which is a Non-qualified Stock Option, shall comply with the requirements of
Section 409A of the Code, and in no event shall any adjustment be made which
would render any Non-qualified Stock Option granted under the Plan to become
subject to Section 409A of the Code.

 

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Titan Pharmaceuticals, Inc. 2015 Omnibus Equity Incentive Plan

 

15.2 Recapitalization. If the Company recapitalizes or otherwise changes its
capital structure, thereafter upon any exercise or satisfaction, as applicable,
of a previously granted Award, the Holder shall be entitled to receive (or
entitled to purchase, if applicable) under such Award, in lieu of the number of
Shares then covered by such Award, the number and class of shares and securities
to which the Holder would have been entitled pursuant to the terms of the
recapitalization if, immediately prior to such recapitalization, the Holder had
been the holder of record of the number of Shares then covered by such Award.

 

15.3 Other Events. In the event of changes to the outstanding Shares by reason
of an extraordinary cash dividend, reorganization, merger, consolidation,
combination, split-up, spin-off, exchange or other relevant change in
capitalization occurring after the date of the grant of any Award and not
otherwise provided for under this Article XV, any outstanding Awards and any
Award Agreements evidencing such Awards shall be adjusted by the Board in its
discretion in such manner as the Board shall deem equitable or appropriate
taking into consideration the applicable accounting and tax consequences, as to
the number and price of Shares or other consideration subject to such Awards. In
the event of any adjustment pursuant to Sections 15.1, 15.2 or this Section
15.3, the aggregate number of Shares available under the Plan pursuant to
Section 5.1 (and the Code Section 162(m) limit set forth therein) may be
appropriately adjusted by the Board, the determination of which shall be
conclusive. In addition, the Committee may make provision for a cash payment to
a Holder or a person who has an outstanding Award. The number of Shares subject
to any Award shall be rounded to the nearest whole number.

 

15.4 Powers Not Affected. The existence of the Plan and the Awards granted
hereunder shall not affect in any way the right or power of the Board or of the
stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change of the Company’s capital
structure or business, any merger or consolidation of the Company, any issue of
debt or equity securities ahead of or affecting Shares or the rights thereof,
the dissolution or liquidation of the Company or any sale, lease, exchange or
other disposition of all or any part of its assets or business or any other
corporate act or proceeding.

 

15.5 No Adjustment for Certain Awards. Except as hereinabove expressly provided,
the issuance by the Company of shares of any class or securities convertible
into shares of any class, for cash, property, labor or services, upon direct
sale, upon the exercise of rights or warrants to subscribe therefor or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, and in any case whether or not for fair value, shall not
affect previously granted Awards, and no adjustment by reason thereof shall be
made with respect to the number of Shares subject to Awards theretofore granted
or the purchase price per Share, if applicable.

 

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Titan Pharmaceuticals, Inc. 2015 Omnibus Equity Incentive Plan

 

Article XVI
AMENDMENT AND TERMINATION OF PLAN

 

The Plan shall continue in effect, unless sooner terminated pursuant to this
Article XVI, until the tenth (10th) anniversary of the date on which it is
adopted by the Board (except as to Awards outstanding on that date). The Board
in its discretion may terminate the Plan at any time with respect to any shares
for which Awards have not theretofore been granted; provided, however, that the
Plan’s termination shall not materially and adversely impair the rights of a
Holder with respect to any Award theretofore granted without the consent of the
Holder. The Board shall have the right to alter or amend the Plan or any part
hereof from time to time; provided, however, that without the approval by a
majority of the votes cast at a meeting of stockholders at which a quorum
representing a majority of the shares of the Company entitled to vote generally
in the election of directors is present in person or by proxy, no amendment or
modification of the Plan may (i) materially increase the benefits accruing to
Holders, (ii) except as otherwise expressly provided in Article XV, materially
increase the number of Shares subject to the Plan or the individual Award
Agreements specified in Article V, (iii) materially modify the requirements for
participation in the Plan, or (iv) amend, modify or suspend Section 7.7
(re-pricing prohibitions) or this Article XVI. In addition, no change in any
Award theretofore granted may be made which would materially and adversely
impair the rights of a Holder with respect to such Award without the consent of
the Holder (unless such change is required in order to cause the benefits under
the Plan to qualify as “performance-based” compensation within the meaning of
Section 162(m) of the Code or to exempt the Plan or any Award from Section 409A
of the Code).

 

Article XVII
MISCELLANEOUS

 

17.1 No Right to Award. Neither the adoption of the Plan by the Company nor any
action of the Board or the Committee shall be deemed to give an Employee,
Director or Consultant any right to an Award except as may be evidenced by an
Award Agreement duly executed on behalf of the Company, and then solely to the
extent and on the terms and conditions expressly set forth therein.

 

17.2 No Rights Conferred. Nothing contained in the Plan shall (i) confer upon
any Employee any right with respect to continuation of employment with the
Company or any Affiliate, (ii) interfere in any way with any right of the
Company or any Affiliate to terminate the employment of an Employee at any time,
(iii) confer upon any Director any right with respect to continuation of such
Director’s membership on the Board, (iv) interfere in any way with any right of
the Company or an Affiliate to terminate a Director’s membership on the Board at
any time, (v) confer upon any Consultant any right with respect to continuation
of his or her consulting engagement with the Company or any Affiliate, or
(vi) interfere in any way with any right of the Company or an Affiliate to
terminate a Consultant’s consulting engagement with the Company or an Affiliate
at any time.

 

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Titan Pharmaceuticals, Inc. 2015 Omnibus Equity Incentive Plan

 

17.3 Other Laws; No Fractional Shares; Withholding. The Company shall not be
obligated by virtue of any provision of the Plan to recognize the exercise of
any Award or to otherwise sell or issue Shares in violation of any laws, rules
or regulations, and any postponement of the exercise or settlement of any Award
under this provision shall not extend the term of such Award. Neither the
Company nor its directors or officers shall have any obligation or liability to
a Holder with respect to any Award (or Shares issuable thereunder) (i) that
shall lapse because of such postponement, or (ii) for any failure to comply with
the requirements of any applicable law, rules or regulations, including but not
limited to any failure to comply with the requirements of Section 409A of this
Code. No fractional Shares shall be delivered, nor shall any cash in lieu of
fractional Shares be paid. The Company shall have the right to deduct in cash
(whether under this Plan or otherwise) in connection with all Awards any taxes
required by law to be withheld and to require any payments required to enable it
to satisfy its withholding obligations. In the case of any Award satisfied in
the form of Shares, no Shares shall be issued unless and until arrangements
satisfactory to the Company shall have been made to satisfy any tax withholding
obligations applicable with respect to such Award. Subject to such terms and
conditions as the Committee may impose, the Company shall have the right to
retain, or the Committee may, subject to such terms and conditions as it may
establish from time to time, permit Holders to elect to tender, Shares
(including Shares issuable in respect of an Award) to satisfy, in whole or in
part, the amount required to be withheld.

 

17.4 No Restriction on Corporate Action. Nothing contained in the Plan shall be
construed to prevent the Company or any Affiliate from taking any corporate
action which is deemed by the Company or such Affiliate to be appropriate or in
its best interest, whether or not such action would have an adverse effect on
the Plan or any Award made under the Plan. No Employee, Director, Consultant,
beneficiary or other person shall have any claim against the Company or any
Affiliate as a result of any such action.

 

17.5 Restrictions on Transfer. No Award under the Plan or any Award Agreement
and no rights or interests herein or therein, shall or may be assigned,
transferred, sold, exchanged, encumbered, pledged or otherwise hypothecated or
disposed of by a Holder except by will or by the laws of descent and
distribution. An Award may be exercisable during the lifetime of the Holder only
by such Holder or by the Holder’s guardian or legal representative.

 

17.6 Beneficiary Designations. Each Holder may, from time to time, name a
beneficiary or beneficiaries (who may be contingent or successive beneficiaries)
for purposes of receiving any amount which is payable in connection with an
Award under the Plan upon or subsequent to the Holder’s death. Each such
beneficiary designation shall serve to revoke all prior beneficiary
designations, be in a form prescribed by the Company and be effective solely
when filed by the Holder in writing with the Company during the Holder’s
lifetime. In the absence of any such written beneficiary designation, for
purposes of the Plan, a Holder’s beneficiary shall be the Holder’s estate.

 

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Titan Pharmaceuticals, Inc. 2015 Omnibus Equity Incentive Plan

 

17.7 Rule 16b-3. It is intended that the Plan and any Award made to a person
subject to Section 16 of the Exchange Act shall meet all of the requirements of
Rule 16b-3. If any provision of the Plan or of any such Award would disqualify
the Plan or such Award under, or would otherwise not comply with the
requirements of, Rule 16b-3, such provision or Award shall be construed or
deemed to have been amended as necessary to conform to the requirements of
Rule 16b-3.

 

17.8 Section 162(m). The following conditions shall apply if it is intended that
the requirements of Section 162(m) of the Code be satisfied such that Awards
under the Plan which are made to Holders who are “covered employees” (as defined
in Section 162(m) of the Code) shall constitute “performance-based” compensation
within the meaning of Section 162(m) of the Code: Any Performance Goal(s)
applicable to Qualified Performance-Based Awards shall be objective, shall be
established not later than ninety (90) days after the beginning of any
applicable Performance Period (or at such other date as may be required or
permitted for “performance-based” compensation under Section 162(m) of the Code)
and shall otherwise meet the requirements of Section 162(m) of the Code,
including the requirement that the outcome of the Performance Goal or Goals be
substantially uncertain (as defined in the regulations under Section 162(m) of
the Code) at the time established. The Performance Criteria to be utilized under
the Plan to establish Performance Goals shall consist of objective tests based
on one or more of the following: earnings or earnings per share, cash flow or
cash flow per share, operating cash flow or operating cash flow per share
revenue growth, product revenue growth, financial return ratios (such as return
on equity, return on investment and/or return on assets), share price
performance, stockholder return, equity and/or value, operating income,
operating margins, earnings before interest, taxes, depreciation and
amortization, earnings, pre- or post-tax income, economic value added (or an
equivalent metric), profit returns and margins, credit quality, sales growth,
market share, working capital levels, comparisons with various share market
indices, year-end cash, debt reduction, assets under management, operating
efficiencies, strategic partnerships or transactions (including co-development,
co-marketing, profit sharing, joint venture or other similar arrangements),
and/or financing and other capital raising transaction. Performance criteria may
be established on a Company-wide basis or with respect to one or more Company
business units or divisions or subsidiaries; and either in absolute terms,
relative to the performance of one or more similarly situated companies, or
relative to the performance of an index covering a peer group of companies. When
establishing Performance Goals for the applicable Performance Period, the
Committee may exclude any or all “extraordinary items” as determined under U.S.
generally accepted accounting principles including, without limitation, the
charges or costs associated with restructurings of the Company, discontinued
operations, other unusual or non-recurring items, and the cumulative effects of
accounting changes, and as identified in the Company’s financial statements,
notes to the Company’s financial statements or management’s discussion and
analysis of financial condition and results of operations contained in the
Company’s most recent annual report filed with the U.S. Securities and Exchange
Commission pursuant to the Exchange Act. Holders who are “covered employees” (as
defined in Section 162(m) of the Code) shall be eligible to receive payment
under a Qualified Performance-Based Award which is subject to achievement of a
Performance Goal or Goals only if the applicable Performance Goal or Goals are
achieved within the applicable Performance Period, as determined by the
Committee. If any provision of the Plan would disqualify the Plan or would not
otherwise permit the Plan to comply with Section 162(m) of the Code as so
intended, such provision shall be construed or deemed amended to conform to the
requirements or provisions of Section 162(m) of the Code. The Committee may
postpone the exercising of Awards, the issuance or delivery of Shares under any
Award or any action permitted under the Plan to prevent the Company or any
subsidiary from being denied a federal income tax deduction, provided that such
deferral satisfies the requirements of Section 409A of the Code. For purposes of
the requirements of Treasury Regulation Section 1.162-27(e)(4)(i), the maximum
aggregate amount that may be paid in cash during any calendar year to any one
person (measured from the date of any payment) with respect to one or more
Awards payable in cash shall be Ten Million Dollars ($10,000,000)].

 

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Titan Pharmaceuticals, Inc. 2015 Omnibus Equity Incentive Plan

 

17.9 Section 409A. Notwithstanding any other provision of the Plan, the
Committee shall have no authority to issue an Award under the Plan with terms
and/or conditions which would cause such Award to constitute non-qualified
“deferred compensation” under Section 409A of the Code unless such Award shall
be structured to be exempt from or comply with all requirements of Code Section
409A. The Plan and all Award Agreements are intended to comply with the
requirements of Section 409A of the Code (or to be exempt therefrom) and shall
be so interpreted and construed and no amount shall be paid or distributed from
the Plan unless and until such payment complies with all requirements of Code
Section 409A. It is the intent of the Company that the provisions of this
Agreement and all other plans and programs sponsored by the Company be
interpreted to comply in all respects with Code Section 409A, however, the
Company shall have no liability to the Holder, or any successor or beneficiary
thereof, in the event taxes, penalties or excise taxes may ultimately be
determined to be applicable to any payment or benefit received by the Holder or
any successor or beneficiary thereof.

 

17.10 Indemnification. Each person who is or shall have been a member of the
Committee or of the Board shall be indemnified and held harmless by the Company
against and from any loss, cost, liability, or expense that may be imposed upon
or reasonably incurred thereby in connection with or resulting from any claim,
action, suit, or proceeding to which such person may be made a party or may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid thereby in settlement thereof, with
the Company’s approval, or paid thereby in satisfaction of any judgment in any
such action, suit, or proceeding against such person; provided, however, that
such person shall give the Company an opportunity, at its own expense, to handle
and defend the same before he or she undertakes to handle and defend it on his
or her own behalf. The foregoing right of indemnification shall not be exclusive
and shall be independent of any other rights of indemnification to which such
persons may be entitled under the Company’s Articles of Incorporation or
By-laws, by contract, as a matter of law, or otherwise.

 

17.11 Other Benefit Plans. No Award, payment or amount received hereunder shall
be taken into account in computing an Employee’s salary or compensation for the
purposes of determining any benefits under any pension, retirement, life
insurance or other benefit plan of the Company or any Affiliate, unless such
other plan specifically provides for the inclusion of such Award, payment or
amount received. Nothing in the Plan shall be construed to limit the right of
the Company to establish other plans or to pay compensation to its employees, in
cash or property, in a manner which is not expressly authorized under the Plan.

 

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Titan Pharmaceuticals, Inc. 2015 Omnibus Equity Incentive Plan

 

17.12 Limits of Liability. Any liability of the Company with respect to an Award
shall be based solely upon the contractual obligations created under the Plan
and the Award Agreement. None of the Company, any member of the Board nor any
member of the Committee shall have any liability to any party for any action
taken or not taken, in good faith, in connection with or under the Plan.

 

17.13 Governing Law. Except as otherwise provided herein, the Plan shall be
construed in accordance with the laws of the State of Delaware, without regard
to principles of conflicts of law.

 

17.14 Severability of Provisions. If any provision of the Plan is held invalid
or unenforceable, such invalidity or unenforceability shall not affect any other
provision of the Plan, and the Plan shall be construed and enforced as if such
invalid or unenforceable provision had not been included in the Plan.

 

17.15 No Funding. The Plan shall be unfunded. The Company shall not be required
to establish any special or separate fund or to make any other segregation of
funds or assets to ensure the payment of any Award. Prior to receipt of Shares
or a cash distribution pursuant to the terms of an Award, such Award shall
represent an unfunded unsecured contractual obligation of the Company and the
Holder shall have no greater claim to the Shares underlying such Award or any
other assets of the Company or Affiliate than any other unsecured general
creditor.

 

17.16 Headings. Headings used throughout the Plan are for convenience only and
shall not be given legal significance.

 

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