EXHIBIT 10.7

KINDRED BIOSCIENCES, INC.
2016 EQUITY INCENTIVE PLAN
RESTRICTED STOCK GRANT NOTICE
KINDRED BIOSCIENCES, Inc., a Delaware corporation (the “Company”), pursuant to
its 2016 Equity Incentive Plan, as amended from time to time (the “Plan”),
hereby grants to the holder listed below (“Participant”) the number of shares of
Common Stock issued pursuant to the Restricted Stock Award (the “Shares”) set
forth below. The Shares are subject to the terms and conditions set forth in
this Restricted Stock Grant Notice (the “Grant Notice”) and the Restricted Stock
Award Agreement attached hereto as Exhibit A (the “Agreement”) and the Plan,
which are incorporated herein by reference. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings in the Grant
Notice and the Agreement.
Participant:
 
 
 
Grant Date:
 
 
 
Total Number of Shares of Common Stock
 
 
 
Vesting Schedule:
 

[To be specified in individual agreements]

By Participant’s signature below, Participant agrees to be bound by the terms
and conditions of the Plan, the Agreement and the Grant Notice. Participant has
reviewed the Agreement, the Plan and the Grant Notice in their entirety, has had
an opportunity to obtain the advice of counsel prior to executing the Grant
Notice and fully understands all provisions of the Grant Notice, the Agreement
and the Plan. Participant hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the administrator upon any questions
arising under the Plan, the Grant Notice or the Agreement.
KINDRED BIOSCIENCES, INC.
PARTICIPANT
 
 
By:
By:
Print Name:
Print Name:
Title:
Title:
 
 
 
 

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EXHIBIT 10.7

EXHIBIT A
TO RESTRICTED STOCK GRANT NOTICE
RESTRICTED STOCK AWARD AGREEMENT
Pursuant to the Grant Notice to which this Agreement is attached, the Company
has granted to Participant the number of Shares set forth in the Grant Notice.
ARTICLE I.GENERAL
1.Defined Terms. Capitalized terms not specifically defined herein shall have
the meanings specified in the Plan or the Grant Notice.
2.Incorporation of Terms of Plan. The Shares issued to Participant pursuant to
the Grant Notice are subject to the terms and conditions set forth in this
Agreement and the Plan, which is incorporated herein by reference. In the event
of any inconsistency between the Plan and this Agreement, the terms of the Plan
shall control.
ARTICLE II.ISSUANCE OF SHARES
1.Issuance of Shares. In consideration of Participant’s past and/or continued
employment with or service to the Company or a Subsidiary and for other good and
valuable consideration, effective as of the grant date set forth in the Grant
Notice (the “Grant Date”), the Company has granted to Participant the number of
Shares set forth in the Grant Notice, upon the terms and conditions set forth in
the Grant Notice, this Agreement and the Plan.
2.Issuance Mechanics. As of the Grant Date, the Company shall issue the Shares
in the form of Common Stock (“Stock”) to Participant and shall (a) cause a stock
certificate or certificates representing such shares of Stock to be registered
in the name of Participant, or (b) cause such shares of Stock to be held in
book-entry form. If a stock certificate is issued, it shall be delivered to and
held in custody by the Company and shall bear the restrictive legends required
by Section 5.1. If the shares of Stock are held in book-entry form, then such
entry will reflect that the shares are subject to the restrictions of this
Agreement.
ARTICLE III. FORFEITURE AND TRANSFER RESTRICTIONS
1.Forfeiture Restriction. Subject to the provisions of Section 3.2 below, in the
event of Participant’s termination of Continuous Service for any reason,
including as a result of Participant’s death or Disability, all of the
Unreleased Shares (as defined below) shall thereupon be forfeited immediately
and without any further action by the Company (the “Forfeiture Restriction”),
except as otherwise provided in a written agreement between Participant and the
Company. Upon the occurrence of such forfeiture, the Company shall become the
legal and beneficial owner of the Unreleased Shares and all rights and interests
therein or relating thereto, and the Company shall have the right to retain and
transfer to its own name the number of Unreleased Shares being forfeited by
Participant. The Unreleased Shares shall be held by the Company in accordance
with Section 3.3 until the Shares are forfeited as provided in this Section 3.1,
until such Unreleased Shares are fully released from the Forfeiture Restriction
as provided in Section 3.2 or until such time as this Agreement is no longer in
effect. Participant hereby authorizes and directs the Secretary of the Company
or other officer specified by the Board or committee which has been delegated
administration of the Plan pursuant to Section 2 of the Plan (the
“Administrator”), to transfer any Unreleased Shares that are forfeited pursuant
to this Section 3.1 from Participant to the Company.
2.Release of Shares from Forfeiture Restriction. The Shares shall be released
from the Forfeiture Restriction in accordance with the vesting schedule set
forth in the Grant Notice. Any of the Shares which, from time to time, have not
yet been released from the Forfeiture Restriction are referred to herein as
“Unreleased Shares.” In the event any of the Unreleased Shares are released from
the Forfeiture Restriction, any Retained Distributions (as defined below) paid
on such Unreleased Shares shall be promptly paid by the Company to Participant.
As soon as administratively practicable following the

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EXHIBIT 10.7

release of any Shares from the Forfeiture Restriction, the Company shall, as
applicable, either deliver to Participant the certificate or certificates
representing such Shares in the Company’s possession belonging to Participant,
or, if the Shares are held in book-entry form, then the Company shall remove the
notations indicating that the shares are subject to the restrictions of this
Agreement. Participant (or the beneficiary or personal representative of
Participant in the event of Participant’s death or incapacity, as the case may
be) shall deliver to the Company any representations or other documents or
assurances as the Company or its representatives deem necessary or advisable in
connection with any such delivery.
3.Escrow.
(a)The Unreleased Shares shall be held by the Company until such Unreleased
Shares are forfeited as provided in Section 3.1, until such Unreleased Shares
are fully released from the Forfeiture Restriction as provided in Section 3.2 or
until such time as this Agreement is no longer in effect. Participant shall not
retain physical custody of any certificates representing Unreleased Shares
issued to Participant. Participant, by acceptance of this Award, shall be deemed
to appoint, and does so appoint, the Company and each of its authorized
representatives as Participant’s attorney(s)-in-fact to effect any transfer of
forfeited Unreleased Shares (and Retained Distributions, if any, paid on such
forfeited Unreleased Shares) to the Company as may be required pursuant to the
Plan or this Agreement, and to execute such representations or other documents
or assurances as the Company or such representatives deem necessary or advisable
in connection with any such transfer. To the extent allowable by applicable law,
the Company, or its designee, shall not be liable for any act it may do or omit
to do with respect to holding the Shares in escrow and while acting in good
faith and in the exercise of its judgment.
(b)The Company will retain custody of all cash dividends and other distributions
(“Retained Distributions”) made or declared with respect to Unreleased Shares
(and such Retained Distributions will be subject to the Forfeiture Restriction
and the other terms and conditions under this Agreement that are applicable to
the Shares) until such time, if ever, as the Unreleased Shares with respect to
which such Retained Distributions shall have been made, paid or declared shall
have become vested pursuant to the Grant Notice. Retained Distributions that
were made or declared in cash will be deemed reinvested in notional shares of
Stock such that upon release and distribution of such Retained Distributions to
Participant as set forth in the immediately preceding sentence, Participant
shall be entitled to receive on the date of such distribution or release an
amount of cash or the number of whole shares of Stock or a combination thereof,
as determined by the Administrator, the aggregate fair value of which shall be
equal to the Fair Market Value of the notional shares of Stock to which such
released Retained Distributions relate. Any Retained Distributions with respect
to Unreleased Shares shall be forfeited in the event such Unreleased Shares are
forfeited.
4.Rights as Stockholder. Except as otherwise provided herein, upon issuance of
the Shares by the Company, Participant shall have all the rights of a
stockholder with respect to said Shares, subject to the restrictions herein,
including the right to vote the Shares and to receive all dividends or other
distributions paid or made with respect to the Shares.
ARTICLE IV. TAXATION AND TAX WITHHOLDING
1.Representation. Participant represents to the Company that Participant has
reviewed with his or her own tax advisors the federal, state, local and foreign
tax consequences of this investment and the transactions contemplated by this
Agreement. Participant is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents. Participant
is ultimately liable and responsible for all taxes owed in connection with this
investment and the transactions contemplated by this Agreement, regardless of
any action the Company or any Subsidiary takes with respect to any tax
withholding obligations that arise in connection with the Shares. Neither the
Company nor any Subsidiary makes any representation or undertaking regarding the
treatment of any tax withholding in connection with the Shares or Participant’s
sale of shares of Stock. The Company and the Subsidiaries do not commit and are
under no obligation to structure this investment or the transactions
contemplated by this Agreement to reduce or eliminate Participant’s tax
liability.

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EXHIBIT 10.7

2.Section 83(b) Election. If Participant makes an election under Section 83(b)
of the Internal Revenue Code of 1986, as amended (the “Code”), to be taxed with
respect to the Shares as of the date of transfer of the Shares rather than as of
the date or dates upon which Participant would otherwise be taxable under
Section 83(a) of the Code, Participant shall deliver a copy of such election to
the Company promptly upon filing such election with the Internal Revenue
Service.
3.Tax Withholding.
(a)The Company and its Subsidiaries have the authority to deduct or withhold, or
require Participant to remit to the Company or the applicable Subsidiary, an
amount sufficient to satisfy applicable federal, state, local and foreign taxes
(including the employee portion of any FICA obligation) required by law to be
withheld with respect to any taxable event arising pursuant to this Agreement.
The Company and its Subsidiaries may withhold or Participant may make such
payment in one or more of the forms specified below:
(i)by cash or check made payable to the Company with respect to which the
withholding obligation arises;
(ii)by the deduction of such amount from other compensation payable to
Participant;
(iii)with respect to any withholding taxes arising in connection with the
vesting of the Shares, with the consent of the Administrator, by requesting that
the Company withhold a net number of vested Shares having a then current Fair
Market Value not exceeding the amount necessary to satisfy the withholding
obligation of the Company based on the minimum applicable statutory withholding
rates for federal, state, local and foreign income tax and payroll tax purposes;
(iv)with respect to any withholding taxes arising in connection with the vesting
of the Shares, with the consent of the Administrator, by tendering to the
Company vested shares of Stock having a then current Fair Market Value not
exceeding the amount necessary to satisfy the withholding obligation of the
Company based on the minimum applicable statutory withholding rates for federal,
state, local and foreign income tax and payroll tax purposes;
(v)with respect to any withholding taxes arising in connection with the vesting
of the Shares, through the delivery of a notice that Participant has placed a
market sell order with a broker acceptable to the Company with respect to those
Shares that are then becoming vested and that the broker has been directed to
pay a sufficient portion of the net proceeds of the sale to the Company with
respect to which the withholding obligation arises in satisfaction of such
withholding taxes; provided that payment of such proceeds is then made to the
Company or the applicable Subsidiary at such time as may be required by the
Administrator, but in any event not later the settlement of such sale; or
(vi)in any combination of the foregoing.
(b)With respect to any withholding taxes arising in connection with the Shares,
in the event Participant fails to provide timely payment of all sums required
pursuant to Section 4.3(a), the Company shall have the right and option, but not
the obligation, to treat such failure as an election by Participant to satisfy
all or any portion of Participant’s required payment obligation pursuant to
Section 4.3(a)(ii) or Section 4.3(a)(iii) above, or any combination of the
foregoing as the Company may determine to be appropriate. The Company shall not
be obligated to deliver any certificate representing the Shares to Participant
or his or her legal representative unless and until Participant or his or her
legal representative shall have paid or otherwise satisfied in full the amount
of all federal, state, local and foreign taxes applicable with respect to the
taxable income of Participant resulting from the vesting of the Shares or any
other taxable event related to the Shares.
(c)In the event any tax withholding obligation arising in connection with the
Shares will be satisfied under Section 4.3(a)(iii), then the Company may elect
to instruct any brokerage firm determined acceptable to the Company for such
purpose to sell on Participant’s behalf a whole number of shares of Stock from
those Shares that are then becoming vested as the Company determines to be
appropriate to generate cash proceeds sufficient to satisfy the tax withholding
obligation and to remit the

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EXHIBIT 10.7

proceeds of such sale to the Company with respect to which the withholding
obligation arises. Participant’s acceptance of this Award constitutes
Participant’s instruction and authorization to the Company and such brokerage
firm to complete the transactions described in this Section 4.3(c), including
the transactions described in the previous sentence, as applicable. The Company
may refuse to deliver any certificate representing the Shares to Participant or
his or her legal representative until the foregoing tax withholding obligations
are satisfied.
(d)Participant is ultimately liable and responsible for all taxes owed in
connection with the Shares, regardless of any action the Company or any
Subsidiary takes with respect to any tax withholding obligations that arise in
connection with the Shares. Neither the Company nor any Subsidiary makes any
representation or undertaking regarding the treatment of any tax withholding in
connection with the awarding, vesting or payment of the Shares or the subsequent
sale of the Shares. The Company and the Subsidiaries do not commit and are under
no obligation to structure this Award to reduce or eliminate Participant’s tax
liability.
ARTICLE V.RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS
1.Legends. The certificate or certificates representing the Shares, if any,
shall bear the following legend (as well as any legends required by the
Company’s charter and applicable law):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO FORFEITURE IN FAVOR OF
THE COMPANY AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A
RESTRICTED STOCK AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
2.Refusal to Transfer; Stop-Transfer Notices. The Company shall not be required
(a) to transfer on its books any Shares that have been sold or otherwise
transferred in violation of any of the provisions of this Agreement or (b) to
treat as owner of such Shares or to accord the right to vote or pay dividends to
any purchaser or other transferee to whom such Shares shall have been so
transferred. Participant agrees that, in order to ensure compliance with the
restrictions referred to herein, the Company may issue appropriate “stop
transfer” instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.
3.Removal of Legend. After such time as the Forfeiture Restriction shall have
lapsed with respect to the Shares, and upon Participant’s request, a new
certificate or certificates representing such Shares shall be issued without the
legend referred to in Section 5.1 and delivered to Participant. If the Shares
are held in book entry form, the Company shall cause any restrictions noted on
the book form to be removed.
ARTICLE VI.OTHER PROVISIONS
1.Administration. The Administrator shall have the power to interpret the Plan,
the Grant Notice and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan, the Grant Notice and
this Agreement as are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made by
the Administrator will be final and binding upon Participant, the Company and
all other interested persons. To the extent allowable pursuant to applicable
law, no member of the Committee or the Board will be personally liable for any
action, determination or interpretation made with respect to the Plan, the Grant
Notice or this Agreement.
2.Shares Not Transferable. The Shares and Retained Distributions may not be
sold, pledged, assigned or transferred in any manner unless and until the
Forfeiture Restrictions have lapsed. No Unreleased Shares or Retained
Distributions or any interest or right therein or part thereof shall be liable
for the debts, contracts or engagements of Participant or his or her successors
in interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy,

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EXHIBIT 10.7

attachment, garnishment or any other legal or equitable proceedings (including
bankruptcy), and any attempted disposition thereof shall be null and void and of
no effect.
3.Adjustments. The Administrator may accelerate the vesting of all or a portion
of the Unreleased Shares in such circumstances as it, in its sole discretion,
may determine. Participant acknowledges that the Shares are subject to
adjustment, modification and termination in certain events as provided in this
Agreement and the Plan.
4.Notices. Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of the Secretary of the
Company at the Company’s principal office, and any notice to be given to
Participant shall be addressed to Participant at Participant’s last address
reflected on the Company’s records. By a notice given pursuant to this Section
6.4, either party may hereafter designate a different address for notices to be
given to that party. Any notice shall be deemed duly given when sent via email
or when sent by certified mail (return receipt requested) and deposited (with
postage prepaid) in a post office or branch post office regularly maintained by
the United States Postal Service.
5.Titles. Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
6.Governing Law. The laws of the State of Delaware shall govern the
interpretation, validity, administration, enforcement and performance of the
terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.
7.Conformity to Securities Laws. Participant acknowledges that the Plan, the
Grant Notice and this Agreement are intended to conform to the extent necessary
with all applicable law, including, without limitation, the provisions of the
Securities Act and the Exchange Act, and any and all regulations and rules
promulgated thereunder by the Securities and Exchange Commission, and state
securities laws and regulations. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and the Shares are granted, only in
such a manner as to conform to applicable law. To the extent permitted by
applicable law, the Plan and this Agreement shall be deemed amended to the
extent necessary to conform to applicable law.
8.Amendment, Suspension and Termination. To the extent permitted by the Plan,
this Agreement may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Administrator or
the Board, provided that, except as may otherwise be provided by the Plan, no
amendment, modification, suspension or termination of this Agreement shall
adversely affect the Shares in any material way without the prior written
consent of Participant.
9.Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth in Section 6.2 and the Plan, this Agreement
shall be binding upon and inure to the benefit of the heirs, legatees, legal
representatives, successors and assigns of the parties hereto.
10.Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan or this Agreement, if Participant is subject to Section 16
of the Exchange Act, the Plan, the Shares, the Grant Notice and this Agreement
shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 of the Exchange Act) that are requirements for the application of
such exemptive rule. To the extent permitted by applicable law, this Agreement
shall be deemed amended to the extent necessary to conform to such applicable
exemptive rule.
11.Not a Contract of Employment. Nothing in this Agreement or in the Plan shall
confer upon Participant any right to continue to serve as an employee or other
service provider of the Company or any Subsidiary or shall interfere with or
restrict in any way the rights of the Company and its Subsidiaries, which rights
are hereby expressly reserved, to discharge or terminate the services of
Participant at any time for any reason whatsoever, with or without cause, except
to the extent expressly provided otherwise in a written agreement between the
Company or a Subsidiary and Participant.

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EXHIBIT 10.7

12.Entire Agreement. The Plan, the Grant Notice and this Agreement (including
any exhibit hereto) constitute the entire agreement of the parties and supersede
in their entirety all prior undertakings and agreements of the Company and
Participant with respect to the subject matter hereof.
13.Section 409A. This Award is not intended to constitute “nonqualified deferred
compensation” within the meaning of Section 409A of the Code (together with any
Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance
that may be issued after the date hereof, “Section 409A”). However,
notwithstanding any other provision of the Plan, the Grant Notice or this
Agreement, if at any time the Administrator determines that this Award (or any
portion thereof) may be subject to Section 409A, the Administrator shall have
the right in its sole discretion (without any obligation to do so or to
indemnify Participant or any other person for failure to do so) to adopt such
amendments to the Plan, the Grant Notice or this Agreement, or adopt other
policies and procedures (including amendments, policies and procedures with
retroactive effect), or take any other actions, as the Administrator determines
are necessary or appropriate for this Award either to be exempt from the
application of Section 409A or to comply with the requirements of Section 409A.
14.Agreement Severable. In the event that any provision of the Grant Notice or
this Agreement is held invalid or unenforceable, such provision will be
severable from, and such invalidity or unenforceability will not be construed to
have any effect on, the remaining provisions of the Grant Notice or this
Agreement.
15.Limitation on Participant’s Rights. Participation in the Plan confers no
rights or interests other than as herein provided. This Agreement creates only a
contractual obligation on the part of the Company as to amounts payable and
shall not be construed as creating a trust. Neither the Plan nor any underlying
program, in and of itself, has any assets. Participant shall have only the
rights of a general unsecured creditor of the Company with respect to amounts
credited and benefits payable, if any, with respect to the Award.
16.Counterparts. The Grant Notice may be executed in one or more counterparts,
including by way of any electronic signature, subject to applicable law, each of
which shall be deemed an original and all of which together shall constitute one
instrument.
17.Broker-Assisted Sales. In the event of any broker-assisted sale of shares of
Stock in connection with the payment of withholding taxes as provided in Section
4.3(a)(iii) or Section 4.3(a)(v): (A) any shares of Stock to be sold through a
broker-assisted sale will be sold on the day the tax withholding obligation
arises or as soon thereafter as practicable; (B) such shares of Stock may be
sold as part of a block trade with other participants in the Plan in which all
participants receive an average price; (C) Participant will be responsible for
all broker’s fees and other costs of sale, and Participant agrees to indemnify
and hold the Company harmless from any losses, costs, damages, or expenses
relating to any such sale; (D) to the extent the proceeds of such sale exceed
the applicable tax withholding obligation, the Company agrees to pay such excess
in cash to Participant as soon as reasonably practicable; (E) Participant
acknowledges that the Company or its designee is under no obligation to arrange
for such sale at any particular price, and that the proceeds of any such sale
may not be sufficient to satisfy the applicable tax withholding obligation; and
(F) in the event the proceeds of such sale are insufficient to satisfy the
applicable tax withholding obligation, Participant agrees to pay immediately
upon demand to the Company or its Subsidiary with respect to which the
withholding obligation arises an amount in cash sufficient to satisfy any
remaining portion of the Company’s or the applicable Subsidiary’s withholding
obligation.
* * * * *