Exhibit 10.2

SIERRA ONCOLOGY, INC.

2018 EQUITY INDUCEMENT PLAN

1. PURPOSE. The purpose of this Plan is to provide incentives to attract, retain
and motivate eligible persons whose present and potential contributions are
important to the success of the Company, and any Parents and Subsidiaries that
exist now or in the future, by offering them an opportunity to participate in
the Company’s future performance through the grant of Awards. Capitalized terms
not defined elsewhere in the text are defined in Section 21.

2. SHARES SUBJECT TO THE PLAN.

2.1 Number of Shares Available. Subject to Section 2.4 and any other applicable
provisions hereof, the total number of Shares reserved and available for grant
and issuance pursuant to this Plan is 1,500,000.

2.2 Lapsed, Returned Awards. Shares subject to Awards, and Shares issued under
the Plan under any Award, will again be available for grant and issuance in
connection with subsequent Awards under this Plan to the extent such Shares:
(a) are subject to issuance upon exercise of an Option granted under this Plan
but which cease to be subject to the Option for any reason other than exercise
of the Option; (b) are subject to Awards granted under this Plan that are
forfeited or are repurchased by the Company at the original issue price or
(c) are subject to Awards granted under this Plan that otherwise terminate
without such Shares being issued. To the extent an Award under the Plan is paid
out in cash rather than Shares, such cash payment will not result in reducing
the number of Shares available for issuance under the Plan. Shares used to pay
the exercise price of an Award or withheld to satisfy the tax withholding
obligations related to an Award will become available for future grant or sale
under the Plan.

2.3 Minimum Share Reserve. At all times the Company shall reserve and keep
available a sufficient number of Shares as shall be required to satisfy the
requirements of all outstanding Awards granted under this Plan.

2.4 Adjustment of Shares. If the number of outstanding Shares is changed by a
stock dividend, extraordinary dividends or distributions (whether in cash,
shares or other property, other than a regular cash dividend) recapitalization,
stock split, reverse stock split, subdivision, combination, reclassification,
spin-off or similar change in the capital structure of the Company, without
consideration, then (a) the number of Shares reserved for issuance and future
grant under the Plan set forth in Section 2.1, (b) the Exercise Prices of and
number of Shares subject to outstanding Options and (c) the number of Shares
subject to other outstanding Awards, shall be proportionately adjusted, subject
to any required action by the Board or the stockholders of the Company and in
compliance with applicable securities laws; provided that fractions of a Share
will not be issued.

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3. ELIGIBILITY. Awards may be granted only to a person who, at the time of
granting of the Award by the Committee: (a) has been hired as an Employee by the
Company or any Subsidiary and such Award is a material inducement to such person
being hired; (b) has been rehired as an Employee following a bona fide period of
interruption of employment with the Company or any Subsidiary; or (c) has become
an Employee of the Company or any Subsidiary in connection with a merger or
acquisition.

4. ADMINISTRATION.

4.1 Committee Composition; Authority. This Plan will be administered by the
Committee or by the Board acting as the Committee. Subject to the general
purposes, terms and conditions of this Plan, and to the direction of the Board,
the Committee will have full power to implement and carry out this Plan.
Notwithstanding the foregoing, the grant of any Award will not be effective
unless: (i) if the grant is made by the Board, then it must be approved by a
majority of the Outside Directors on the Board; and (ii) if the grant is made by
the Committee, then the Committee must be comprised solely of Outside Directors
(except as otherwise permitted under applicable rules). The Committee will have
the authority to:

(a) construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;

(b) prescribe, amend and rescind rules and regulations relating to this Plan or
any Award;

(c) select persons to receive Awards;

(d) determine the form and terms and conditions, not inconsistent with the terms
of the Plan, of any Award granted hereunder. Such terms and conditions include,
but are not limited to, the exercise price, the time or times when Awards may
vest and be exercised (which may be based on performance criteria) or settled,
any vesting acceleration or waiver of forfeiture restrictions, the method to
satisfy tax withholding obligations or any other tax liability legally due and
any restriction or limitation regarding any Award or the Shares relating
thereto, based in each case on such factors as the Committee will determine;

(e) determine the number of Shares or other consideration subject to Awards;

(f) determine the Fair Market Value in good faith and interpret the applicable
provisions of this Plan and the definition of Fair Market Value in connection
with circumstances that impact the Fair Market Value, if necessary;

(g) determine whether Awards will be granted singly, in combination with, in
tandem with, or as alternatives to, other Awards under this Plan or any other
incentive or compensation plan of the Company or any Parent or Subsidiary of the
Company;

(h) grant waivers of Plan or Award conditions;

(i) determine the vesting, exercisability and payment of Awards;

(j) correct any defect, supply any omission or reconcile any inconsistency in
this Plan, any Award or any Award Agreement;

(k) determine whether an Award has been earned;

 

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(l) reduce or waive any criteria with respect to Performance Factors;

(m) adjust Performance Factors to take into account changes in law and
accounting or tax rules as the Committee deems necessary or appropriate to
reflect the impact of extraordinary or unusual items, events or circumstances to
avoid windfalls or hardships;

(n) adopt terms and conditions, rules and/or procedures (including the adoption
of any subplan under this Plan) relating to the operation and administration of
the Plan to accommodate requirements of local law and procedures outside of the
United States; and

(o) make all other determinations necessary or advisable for the administration
of this Plan.

4.2 Committee Interpretation and Discretion. Any determination made by the
Committee with respect to any Award shall be made in its sole discretion at the
time of grant of the Award or, unless in contravention of any express term of
the Plan or Award, at any later time, and such determination shall be final and
binding on the Company and all persons having an interest in any Award under the
Plan. Any dispute regarding the interpretation of the Plan or any Award
Agreement shall be submitted by the Employee or Company to the Committee for
review. The resolution of such a dispute by the Committee shall be final and
binding on the Company and the Employee. The Committee may delegate to one or
more executive officers the authority to review and resolve disputes with
respect to Awards held by Employees who are not Insiders, and such resolution
shall be final and binding on the Company and the Employee.

4.3 Section 16 of the Exchange Act. Awards granted to Employees who are subject
to Section 16 of the Exchange Act must be approved by two or more “non-employee
directors” (as defined in the regulations promulgated under Section 16 of the
Exchange Act).

4.4 Documentation. The Award Agreement for a given Award, the Plan and any other
documents may be delivered to, and accepted by, an Employee or any other person
in any manner (including electronic distribution or posting) that meets
applicable legal requirements.

4.5 Foreign Award Recipients. Notwithstanding any provision of the Plan to the
contrary, in order to comply with the laws and practices in other countries in
which the Company and its Subsidiaries operate or have employees eligible for
Awards, the Committee, in its sole discretion, shall have the power and
authority to: (a) determine which Subsidiaries and Affiliates shall be covered
by the Plan; (b) determine which Employees outside the United States are
eligible to participate in the Plan; (c) modify the terms and conditions of any
Award granted to individuals outside the United States or foreign nationals to
comply with applicable foreign laws, policies, customs and practices;
(d) establish subplans and modify exercise procedures and other terms and
procedures, to the extent the Committee determines such actions to be necessary
or advisable (and such subplans and/or modifications shall be attached to this
Plan as appendices); provided, however, that no such subplans and/or
modifications shall increase the share limitations contained in the Plan; and
(e) take any action, before or after an Award is made, that the Committee
determines to be necessary or advisable to obtain approval or comply with any
local governmental regulatory exemptions or approvals. Notwithstanding the
foregoing, the Committee may not take any actions hereunder, and no Awards shall
be granted, that would violate the Exchange Act or any other applicable United
States securities law, the Code, or any other applicable United States governing
statute or law.

 

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5. OPTIONS. An Option is the right but not the obligation to purchase a Share,
subject to certain conditions, if applicable. The Committee may grant Options to
eligible Employees and will determine the number of Shares subject to the
Option, the Exercise Price of the Option, the period during which the Option may
vest and be exercised, and all other terms and conditions of the Option, subject
to the following terms of this section.

5.1 Option Grant. Each Option granted under this Plan will be a Nonqualified
Stock Option (“NSO”). An Option may be, but need not be, awarded upon
satisfaction of such Performance Factors during any Performance Period as are
set out in advance in the Employee’s individual Award Agreement. If the Option
is being earned upon the satisfaction of Performance Factors, then the Committee
will: (a) determine the nature, length and starting date of any Performance
Period for each Option; and (b) select from among the Performance Factors to be
used to measure the performance, if any. Performance Periods may overlap and
Employees may participate simultaneously with respect to Options that are
subject to different performance goals and other criteria.

5.2 Date of Grant. The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, or a specified future
date. The Award Agreement and a copy of this Plan will be delivered to the
Employee within a reasonable time after the granting of the Option.

5.3 Exercise Period. Options may be vested and exercisable within the times or
upon the conditions as set forth in the Award Agreement governing such Option;
provided, however, that no Option will be exercisable after the expiration of
ten (10) years from the date the Option is granted. The Committee also may
provide for Options to become vested or exercisable at one time or from time to
time, periodically or otherwise, in such number of Shares or percentage of
Shares as the Committee determines.

5.4 Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted; provided that: the Exercise Price of an
Option will be not less than one hundred percent (100%) of the Fair Market Value
of the Shares on the date of grant. Payment for the Shares purchased may be made
in accordance with Section 7 and the Award Agreement and in accordance with any
procedures established by the Company.

5.5 Method of Exercise. Any Option granted hereunder will be vested and
exercisable according to the terms of the Plan and at such times and under such
conditions as determined by the Committee and set forth in the Award Agreement.
An Option may not be exercised for a fraction of a Share. An Option will be
deemed exercised when the Company receives: (a) notice of exercise (in such form
as the Committee may specify from time to time) from the person entitled to
exercise the Option (and/or via electronic execution through the authorized
third party administrator), and (b) full payment for the Shares with respect to
which the Option is exercised (together with applicable withholding taxes). Full
payment may consist of any consideration and method of payment authorized by the
Committee and permitted by the Award Agreement and the Plan. Shares issued upon
exercise of an Option will be issued in the name of the Employee. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder will exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
will issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 2.4 of the Plan. Exercising an Option in any manner will decrease the
number of Shares thereafter available, both for purposes of the Plan and for
sale under the Option, by the number of Shares as to which the Option is
exercised.

 

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5.6 Termination of Service. If the Employee’s Service terminates for any reason
except for Cause or the Employee’s death or Disability, then the Employee may
exercise such Employee’s Options (only to the extent that such Options are
exercisable by the Employee on the date Employee’s Service terminates) during
the period ending no later than three (3) months after the date Employee’s
Service terminates (or such shorter or longer time period as may be determined
by the Committee), but in any event no later than the expiration date of the
Options.

(a) Death. If the Employee’s Service terminates because of the Employee’s death
(or the Employee dies within three (3) months after Employee’s Service
terminates other than for Cause or because of the Employee’s Disability), then
the Employee’s Options may be exercised only to the extent that such Options
would have been exercisable by the Employee on the date Employee’s Service
terminates and must be exercised by the Employee’s legal representative, or
authorized assignee, no later than twelve (12) months after the date Employee’s
Service terminates (or such shorter time period or longer time period as may be
determined by the Committee), but in any event no later than the expiration date
of the Options.

(b) Disability. If the Employee’s Service terminates because of the Employee’s
Disability, then the Employee’s Options may be exercised only to the extent that
such Options would have been exercisable by the Employee on the date Employee’s
Service terminates and must be exercised by the Employee (or the Employee’s
legal representative or authorized assignee) no later than twelve (12) months
after the date Employee’s Service terminates (or such shorter or longer time
period as may be determined by the Committee, but in any event no later than the
expiration date of the Options.

(c) Cause. If the Employee is terminated for Cause, then Employee’s Options
shall expire on such Employee’s date of termination of Service, or at such later
time and on such conditions as are determined by the Committee, but in any event
no later than the expiration date of the Options. Unless otherwise provided in
the Award Agreement or other agreement between the Company and Employee, Cause
shall have the meaning set forth in this Plan.

5.7 Limitations on Exercise. The Committee may specify a minimum number of
Shares that may be purchased on any exercise of an Option, provided that such
minimum number will not prevent any Employee from exercising the Option for the
full number of Shares for which it is then exercisable.

5.8 Modification, Extension or Renewal. The Committee may modify, extend or
renew outstanding Options and authorize the grant of new Options in substitution
therefor, provided that any such action may not, without the written consent of
an Employee, impair any of such Employee’s rights under any Option previously
granted.

6. RESTRICTED STOCK UNITS. A Restricted Stock Unit (“RSU”) is an award to an
eligible Employee covering a number of Shares that may be settled in cash, or by
issuance of those Shares. All RSUs shall be made pursuant to an Award Agreement.

6.1 Terms of RSUs. The Committee will determine the terms of an RSU including,
without limitation: (a) the number of Shares subject to the RSU; (b) the time or
times during which the RSU may be settled; (c) the consideration to be
distributed on settlement; and (d) the effect of the Employee’s termination of
Service on each RSU. An RSU may be awarded upon satisfaction of such performance
goals based on Performance Factors during any Performance Period as are set out
in advance in the Employee’s Award Agreement. If the RSU is being earned upon
satisfaction of Performance Factors, then the Committee will: (x) determine the
nature, length and starting date of any Performance Period for the RSU;
(y) select from among the Performance Factors to be used to measure the
performance, if any; and (z) determine the number of Shares deemed subject to
the RSU. Performance Periods may overlap and participants may participate
simultaneously with respect to RSUs that are subject to different Performance
Periods and different performance goals and other criteria.

 

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6.2 Form and Timing of Settlement. Payment of earned RSUs shall be made as soon
as practicable after the date(s) determined by the Committee and set forth in
the Award Agreement. The Committee, in its sole discretion, may settle earned
RSUs in cash, Shares, or a combination of both. The Committee may also permit a
Employee to defer payment under an RSU to a date or dates after the RSU is
earned provided that the terms of the RSU and any deferral satisfy the
requirements of Section 409A of the Code.

6.3 Termination of Service. Except as may be set forth in the Employee’s Award
Agreement, vesting ceases on such date Employee’s Service terminates (unless
determined otherwise by the Committee).

7. PAYMENT FOR SHARE PURCHASES. Payment from an Employee for Shares purchased
pursuant to this Plan may be made in cash or by check or, where expressly
approved for the Employee by the Committee and where permitted by law (and to
the extent not otherwise set forth in the applicable Award Agreement):

(a) by cancellation of indebtedness of the Company to the Employee;

(b) by surrender of shares of the Company held by the Employee that have a Fair
Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which said Award will be exercised or settled;

(c) by waiver of compensation due or accrued to the Employee for services
rendered or to be rendered to the Company or a Parent or Subsidiary of the
Company;

(d) by consideration received by the Company pursuant to a broker-assisted or
other form of cashless exercise program implemented by the Company in connection
with the Plan;

(e) by any combination of the foregoing; or

(f) by any other method of payment as is permitted by applicable law.

8. WITHHOLDING TAXES.

8.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of
Awards granted under this Plan or the applicable tax event occurs, the Company
may require the Employee to remit to the Company, or to the Parent or Subsidiary
employing the Employee, an amount sufficient to satisfy applicable U.S. federal,
state, local and international withholding tax requirements or any other tax or
social insurance liability legally due from the Employee prior to the delivery
of Shares pursuant to exercise or settlement of any Award. Whenever payments in
satisfaction of Awards granted under this Plan are to be made in cash, such
payment will be net of an amount sufficient to satisfy applicable U.S. federal,
state, local and international withholding tax or social insurance requirements
or any other tax liability legally due from the Employee. The Fair Market Value
of the Shares will be determined as of the date that the taxes are required to
be withheld and such Shares will be valued based on the value of the actual
trade or, if there is none, the Fair Market Value of the Shares as of the
previous trading day.

 

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8.2 Stock Withholding. The Committee, in its sole discretion and pursuant to
such procedures as it may specify from time to time and to limitations of local
law, may require or permit an Employee to satisfy such tax withholding
obligation or any other tax liability legally due from the Employee, in whole or
in part by (without limitation) (a) paying cash, (b) electing to have the
Company withhold otherwise deliverable cash or Shares having a Fair Market Value
equal to up to the maximum statutory amount permitted to be withheld,
(c) delivering to the Company already-owned Shares having a Fair Market Value
equal to up to the maximum statutory amount permitted to be withheld or
(d) withholding from the proceeds of the sale of otherwise deliverable Shares
acquired pursuant to an Award either through a voluntary sale or through a
mandatory sale arranged by the Company.

9. TRANSFERABILITY. Unless determined otherwise by the Committee, an Award may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution. If the
Committee makes an Award transferable, including, without limitation, by
instrument to an inter vivos or testamentary trust in which the Awards are to be
passed to beneficiaries upon the death of the trustor (settlor) or by gift or by
domestic relations order to a Permitted Transferee, such Award will contain such
additional terms and conditions as the Committee deems appropriate. All Awards
shall be exercisable: (a) during the Employee’s lifetime only by (i) the
Employee, or (ii) the Employee’s guardian or legal representative; (b) after the
Employee’s death, by the legal representative of the Employee’s heirs or
legatees; and (c) by a Permitted Transferee

10. PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.

10.1 Voting and Dividends. No Employee will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Employee, except for any Dividend Equivalent Rights permitted by an applicable
Award Agreement. Any Dividend Equivalent Rights shall be subject to the same
vesting or performance conditions as the underlying Award. In addition, the
Committee may provide that any Dividend Equivalent Rights permitted by an
applicable Award Agreement shall be deemed to have been reinvested in additional
Shares or otherwise reinvested. After Shares are issued to the Employee, the
Employee will be a stockholder and have all the rights of a stockholder with
respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares; provided, that if
such Shares are Unvested Shares, then any new, additional or different
securities the Employee may become entitled to receive with respect to such
Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company will be subject to the same
restrictions as the Unvested Shares; provided, further, that the Employee will
have no right to retain such stock dividends or stock distributions with respect
to Shares that are repurchased at the Employee’s Exercise Price, pursuant to
Section 10.2.

10.2 Restrictions on Shares. At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) a right to repurchase (a “Right of
Repurchase”) a portion of any or all Unvested Shares held by an Employee
following such Employee’s termination of Service at any time within ninety
(90) days (or such longer or shorter time determined by the Committee) after the
later of the date Employee’s Service terminates and the date the Employee
purchases Shares under this Plan, for cash and/or cancellation of purchase money
indebtedness, at the Employee’s Exercise Price.

11. CERTIFICATES. All Shares or other securities (whether or not certificated)
delivered under this Plan will be subject to such stock transfer orders, legends
and other restrictions as the Committee may deem necessary or advisable,
including restrictions under any applicable U.S. federal, state or foreign
securities law, or any rules, regulations and other requirements of the SEC or
any stock exchange or automated quotation system upon which the Shares may be
listed or quoted and any non-U.S. exchange controls or securities law
restrictions to which the Shares are subject.

 

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12. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on an Employee’s
Shares, the Committee may require the Employee to deposit all certificates
representing Shares, together with stock powers or other instruments of transfer
approved by the Committee, appropriately endorsed in blank, with the Company or
an agent designated by the Company to hold in escrow until such restrictions
have lapsed or terminated, and the Committee may cause a legend or legends
referencing such restrictions to be placed on the certificates. Any Employee who
is permitted to execute a promissory note as partial or full consideration for
the purchase of Shares under this Plan will be required to pledge and deposit
with the Company all or part of the Shares so purchased as collateral to secure
the payment of the Employee’s obligation to the Company under the promissory
note; provided, however, that the Committee may require or accept other or
additional forms of collateral to secure the payment of such obligation and, in
any event, the Company will have full recourse against the Employee under the
promissory note notwithstanding any pledge of the Employee’s Shares or other
collateral. In connection with any pledge of the Shares, the Employee will be
required to execute and deliver a written pledge agreement in such form as the
Committee will from time to time approve. The Shares purchased with the
promissory note may be released from the pledge on a pro rata basis as the
promissory note is paid.

13. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award will not be
effective unless such Award is in compliance with all applicable U.S. and
foreign federal and state securities and exchange control laws, rules and
regulations of any governmental body, and the requirements of any stock exchange
or automated quotation system upon which the Shares may then be listed or
quoted, as they are in effect on the date of grant of the Award and also on the
date of exercise or other issuance. Notwithstanding any other provision in this
Plan, the Company will have no obligation to issue or deliver certificates for
Shares under this Plan prior to: (a) obtaining any approvals from governmental
agencies that the Company determines are necessary or advisable; and/or
(b) completion of any registration or other qualification of such Shares under
any state or federal or foreign law or ruling of any governmental body that the
Company determines to be necessary or advisable. The Company will be under no
obligation to register the Shares with the SEC or to effect compliance with the
registration, qualification or listing requirements of any foreign or state
securities laws, exchange control laws, stock exchange or automated quotation
system, and the Company will have no liability for any inability or failure to
do so.

14. NO OBLIGATION TO EMPLOY. The Employee’s participation in the Plan is
voluntary. Nothing in this Plan or any Award granted under this Plan will confer
or be deemed to confer on any Employee any right to continue in the employ of,
or to continue any other relationship with, the Company or any Parent,
Subsidiary or Affiliate or limit in any way the right of the Company or any
Parent, Subsidiary or Affiliate to terminate Employee’s employment or other
relationship at any time.

15. CORPORATE TRANSACTIONS. In the event of a Corporate Transaction any or all
outstanding Awards may be assumed or replaced by the successor corporation,
which assumption or replacement shall be binding on all Employees. In the
alternative, the successor corporation may substitute equivalent Awards or
provide substantially similar consideration to Employees as was provided to
stockholders (after taking into account the existing provisions of the Awards).
The successor corporation may also issue, in place of outstanding Shares of the
Company held by the Employee, substantially similar shares, cash or other
property subject to repurchase restrictions no less favorable to the Employee.
In the event such successor or acquiring corporation (if any) refuses to assume,
convert, replace or substitute Awards, as provided above, pursuant to a
Corporate Transaction, then notwithstanding any other provision in this Plan to
the contrary, such Awards shall have their vesting accelerate as to all shares
subject to such Award (and any applicable rights of repurchase shall fully
lapse) immediately prior to the Corporate Transaction. In addition, in the event
such successor or acquiring corporation (if any) refuses to assume, convert,
replace

 

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or substitute Awards, as provided above, pursuant to a Corporate Transaction,
the Committee will (i) notify the Employee in writing or electronically that
such Award will, if applicable, be exercisable for a period of time determined
by the Committee in its sole discretion, and such Award will terminate upon the
earlier of the expiration of such period or immediately prior to the Corporate
Transaction or (ii) provide that each Award shall be cancelled immediately upon
the occurrence of the Corporate Transaction in exchange for a payment in cash or
securities in an amount equal to (A) the excess of the consideration paid per
Share in the Corporate Transaction over the exercise price or purchase price (if
any) per Share subject to the Award multiplied by (B) the number of Shares
subject to the Award. Awards need not be treated similarly in a Corporate
Transaction

16. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided herein,
this Plan will become effective on the Effective Date and will terminate on the
later of ten (10) years from the date this Plan is adopted by the Committee or
the date additional Shares are added to the Plan by the Committee. This Plan and
all Awards granted hereunder shall be governed by and construed in accordance
with the laws of the State of Delaware (excluding its conflict of law rules).

17. AMENDMENT OR TERMINATION OF PLAN. The Board or Committee may at any time
terminate or amend this Plan in any respect, including, without limitation,
amendment of any form of Award Agreement or instrument to be executed pursuant
to this Plan; provided, however, that the Board or Committee will not, without
the approval of the stockholders of the Company, amend this Plan in any manner
that requires such stockholder approval; provided further, that an Employee’s
Award shall be governed by the version of this Plan then in effect at the time
such Award was granted.

18. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the
Committee nor any provision of this Plan will be construed as creating any
limitations on the power of the Board or the Committee to adopt such additional
compensation arrangements as it may deem desirable, including, without
limitation, the granting of stock awards and bonuses otherwise than under this
Plan, and such arrangements may be either generally applicable or applicable
only in specific cases.

19. INSIDER TRADING POLICY. Each Employee who receives an Award shall comply
with any policy adopted by the Company from time to time covering transactions
in the Company’s securities by Employees, officers and/or directors of the
Company.

20. ALL AWARDS SUBJECT TO COMPANY CLAWBACK OR RECOUPMENT POLICY. All Awards,
subject to applicable law, shall be subject to clawback or recoupment pursuant
to any compensation clawback or recoupment policy adopted by the Board or
required by law during the term of Employee’s employment or other service with
the Company that is applicable to executive officers, employees, directors or
other service providers of the Company, and in addition to any other remedies
available under such policy and applicable law, may require the cancellation of
outstanding Awards and the recoupment of any gains realized with respect to
Awards.

21. DEFINITIONS. As used in this Plan, and except as elsewhere defined herein,
the following terms will have the following meanings:

21.1 “Affiliate” means (i) any entity that, directly or indirectly, is
controlled by, controls or is under common control with, the Company and
(ii) any entity in which the Company has a significant equity interest, in
either case as determined by the Committee, whether now or hereafter existing.

21.2 “Award” means any award under this Plan, including any Option or Restricted
Stock Unit.

 

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21.3 “Award Agreement” means, with respect to each Award, the written or
electronic agreement between the Company and the Employee setting forth the
terms and conditions of the Award, and country-specific appendix thereto for
grants to non-U.S. Employees, which shall be in substantially a form (which need
not be the same for each Employee) that the Committee (or in the case of Award
agreements that are not used for Insiders, the Committee’s delegate(s)) has from
time to time approved, and will comply with and be subject to the terms and
conditions of this Plan.

21.4 “Board” means the Board of Directors of the Company.

21.5 “Cause” means (a) Employee’s conviction (including a guilty plea or plea of
nolo contendere) of any felony or any other crime involving fraud, dishonesty or
moral turpitude; (b) Employee’s commission or attempted commission of or
participation in a fraud or act of dishonesty or misrepresentation against the
Company that results (or could reasonably be expected to result) in material
harm or injury to the business or reputation of the Company; (c) Employee’s
material violation of any contract or agreement between Employee and the
Company, or of any Company policy, or of any statutory duty Employee owes to the
Company; or (d) Employee’s conduct that constitutes gross insubordination,
incompetence or habitual neglect of duties and that results in (or could
reasonably be expected to have resulted in) material harm to the business or
reputation of the Company. The determination as to whether an Employee is being
terminated for Cause shall be made in good faith by the Company and shall be
final and binding on the Employee. The foregoing definition does not in any way
limit the Company’s ability to terminate an Employee’s employment or consulting
relationship at any time as provided in Section 14 above, and the term “Company”
will be interpreted to include any Subsidiary or Parent, as appropriate.
Notwithstanding the foregoing, the foregoing definition of “Cause” may, in part
or in whole, be modified or replaced in each individual employment agreement or
Award Agreement with any Employee, provided that such document supersedes the
definition provided in this Section 21.5.

21.6 “Code” means the United States Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.

21.7 “Committee” means the Compensation Committee of the Board.

21.8 “Common Stock” means the common stock of the Company.

21.9 “Company” means Sierra Oncology, Inc., or any successor corporation.

21.10 “Corporate Transaction” means the occurrence of any of the following
events: (a) any “Person” (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of
the Exchange Act), directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the total voting power represented
by the Company’s then-outstanding voting securities; provided, however, that for
purposes of this subclause (a) the acquisition of additional securities by any
one Person who is considered to own more than fifty percent (50%) of the total
voting power of the securities of the Company will not be considered a Corporate
Transaction; (b) the consummation of the sale or disposition by the Company of
all or substantially all of the Company’s assets; (c) the consummation of a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or its parent) at least fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving
entity or its parent outstanding immediately after such merger or consolidation;
(d) any other transaction which qualifies as a “corporate transaction” under
Section 424(a) of the Code wherein the stockholders of the Company give up all
of their equity interest in the Company (except for the acquisition, sale or
transfer of all or substantially all of the

 

10

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outstanding shares of the Company) or (e) a change in the effective control of
the Company that occurs on the date that a majority of members of the Board are
replaced during any twelve (12) month period by members of the Board whose
appointment or election is not endorsed by as majority of the members of the
Board prior to the date of such appointment or election. For purpose of this
subclause (e), if any Person is considered to be in effective control of the
Company, the acquisition of additional control of the Company by the same Person
will not be considered a Corporate Transaction. For purposes of this definition,
Persons will be considered to be acting as a group if they are owners of a
corporation that enters into a merger, consolidation, purchase or acquisition of
stock, or similar business transaction with the Company. Notwithstanding the
foregoing, to the extent that any amount constituting deferred compensation (as
defined in Section 409A of the Code) would become payable under this Plan by
reason of a Corporate Transaction, such amount shall become payable only if the
event constituting a Corporate Transaction would also qualify as a change in
ownership or effective control of the Company or a change in the ownership of a
substantial portion of the assets of the Company, each as defined within the
meaning of Code Section 409A, as it has been and may be amended from time to
time, and any proposed or final Treasury Regulations and IRS guidance that has
been promulgated or may be promulgated thereunder from time to time.

21.11 “Director” means a member of the Board.

21.12 “Disability” means in the case of incentive stock options, total and
permanent disability as defined in Section 22(e)(3) of the Code and in the case
of other Awards, that the Employee is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months.

21.13 “Dividend Equivalent Right” means the right of an Employee, granted at the
discretion of the Committee or as otherwise provided by the Plan or an Award
Agreement, to receive a credit for the account of such Employee in an amount
equal to the cash, stock or other property dividends in amounts equal equivalent
to cash, stock or other property dividends for each Share represented by an
Award held by such Employee.

21.14 “Effective Date” means September 20, 2018.

21.15 “Employee” means any person, including Officers, providing services as an
employee to the Company or any Parent, Subsidiary or Affiliate. Neither service
as a director nor payment of a director’s fee by the Company will be sufficient
to constitute “employment” by the Company.

21.16 “Exchange Act” means the United States Securities Exchange Act of 1934, as
amended.

21.17 “Exercise Price” means, with respect to an Option, the price at which a
holder may purchase the Shares issuable upon exercise of an Option.

21.18 “Fair Market Value” means, as of any date, the value of a share of the
Company’s Common Stock determined as follows:

(a) if such Common Stock is publicly traded and is then listed on a national
securities exchange, its closing price on the date of determination on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading as reported in The Wall Street Journal or such other source
as the Board or the Committee deems reliable;

 

11

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(b) if such Common Stock is publicly traded but is neither listed nor admitted
to trading on a national securities exchange, the average of the closing bid and
asked prices on the date of determination as reported in The Wall Street Journal
or such other source as the Board or the Committee deems reliable; or

(c) if none of the foregoing is applicable, by the Board or the Committee in
good faith.

21.19 “Insider” means an officer or director of the Company or any other person
whose transactions in the Company’s Common Stock are subject to Section 16 of
the Exchange Act.

21.20 “IRS” means the United States Internal Revenue Service.

21.21 “Option” means an award of an option to purchase Shares pursuant to
Section 5.

21.22 “Outside Director” means a Director who is not an Employee of the Company
or any Parent or Subsidiary and who is an “independent” director under the rules
of The Nasdaq Stock Market, as may be amended from time to time.

21.23 “Parent” means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if each of such corporations other
than the Company owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

21.24 “Performance Factors” means the factors selected by the Committee to
determine whether performance goals established by the Committee applicable to
Awards have been satisfied.

21.25 “Performance Period” means the period of service determined by the
Committee during which years of service or performance is to be measured for the
Award.

21.26 “Permitted Transferee” means any child, stepchild, grandchild, parent,
stepparent, grandparent, 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) of the Employee, any person
sharing the Employee’s household (other than a tenant or employee), a trust in
which these persons (or the Employee) have more than 50% of the beneficial
interest, a foundation in which these persons (or the Employee) control the
management of assets, and any other entity in which these persons (or the
Employee) own more than 50% of the voting interests.

21.27 “Plan” means this Sierra Oncology, Inc. 2018 Equity Inducement Plan.

21.28 “Restricted Stock Unit” means an Award granted pursuant to Section 6 of
the Plan.

21.29 “SEC” means the United States Securities and Exchange Commission.

21.30 “Securities Act” means the United States Securities Act of 1933, as
amended.

21.31 “Service” shall mean service as an Employee to the Company or a Parent,
Subsidiary or Affiliate, subject to such further limitations as may be set forth
in the Plan or the applicable Award Agreement. An Employee will not be deemed to
have ceased to provide Service in the case of (a) sick leave, (b) military
leave, or (c) any other leave of absence approved by the Company; provided, that
such leave is for a period of not more than 90 days (x) unless reemployment upon
the expiration of such leave is guaranteed by contract or statute, or (y) unless
provided otherwise pursuant to formal policy adopted from

 

12

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time to time by the Company and issued and promulgated to employees in writing.
In the case of any Employee on an approved leave of absence or a reduction in
hours worked (for illustrative purposes only, a change in schedule from that of
full-time to part-time), the Committee may make such provisions regarding
suspension of or modification of vesting of the Award while on leave from the
employ of the Company or a Parent, Subsidiary or Affiliate or during such change
in working hours as it may deem appropriate, except that in no event may an
Award be exercised after the expiration of the term set forth in the applicable
Award Agreement. In the event of military leave, if required by applicable laws,
vesting shall continue for the longest period that vesting continues under any
other statutory or Company approved leave of absence and, upon a Employee’s
returning from military leave (under conditions that would entitle him or her to
protection upon such return under the Uniform Services Employment and
Reemployment Rights Act), he or she shall be given vesting credit with respect
to Awards to the same extent as would have applied had the Employee continued to
provide services to the Company throughout the leave on the same terms as he or
she was providing services immediately prior to such leave. Except as set forth
in this Section 28.39, an employee shall have terminated employment as of the
date he or she ceases provide services (regardless of whether the termination is
in breach of local employment laws or is later found to be invalid) and
employment shall not be extended by any notice period or garden leave mandated
by local law, provided however, that a change in status from an employee to a
consultant or advisor shall not terminate the service provider’s Service, unless
determined by the Committee, in its discretion. The Committee will have sole
discretion to determine whether a Employee has ceased to provide Services and
the effective date on which the Employee ceased to provide Services.

21.32 “Shares” means shares of Common Stock and the common stock of any
successor entity.

21.33 “Subsidiary” means any corporation (other than the Company) in an unbroken
chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

21.34 “Treasury Regulations” means regulations promulgated by the United States
Treasury Department.

21.35 “Unvested Shares” means Shares that have not yet vested or are subject to
a right of repurchase in favor of the Company (or any successor thereto).

 

13

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SIERRA ONCOLOGY, INC.

(the “Company”)

2018 EQUITY INDUCEMENT PLAN

(the “Plan”)

ADDENDUM FOR CANADIAN PARTICIPANTS

 

A.

The Company has adopted the Plan, to be effective on the Effective Date.

 

B.

The Company desires to modify certain terms of the Plan in their application for
Employees (as those terms are defined in the Plan) who are resident in Canada
for purposes of the Income Tax Act (Canada) or otherwise subject to Canadian
personal income tax (the “Canadian Employees”).

 

C.

Under the Income Tax Act (Canada), Employees who are Canadian Employees are
treated as officers and employees for purposes of that Act.

NOW THEREFORE, the Company does hereby amend certain terms and conditions of the
Plan as they apply to the Canadian Employees, as follows.

 

1.

Defined Terms. In this Addendum, all defined terms shall have the respective
meanings set forth in the Plan, unless otherwise defined herein.

 

2.

Effective Date. The effective date of this Addendum is the Effective Date.

 

3.

Options.

 

  (a)

Notwithstanding section 5.2 of the Plan, the grant date of an Option awarded to
a Canadian Employee shall be, in all cases, the date the Option is actually
granted to the Canadian Employee, as evidenced by the Award Agreement.

 

  (b)

Notwithstanding section 5.1 of the Plan, satisfaction of Performance Factors, if
any, will be treated as a condition subsequent to the grant to a Canadian
Employee of an Option giving rise to a risk of forfeiture of the Option and not
a condition precedent to the grant of the Option.

 

  (c)

For purposes of section 5.9 of the Plan, Options granted to a Canadian Employee
will not be modified or altered, or new options granted in substitution
therefor, if such modification, alteration or substitution has a material
adverse affect on such Canadian Employee’s tax treatment of such Options, except
with such Canadian Employee’s consent.

 

A-1

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4.

Restricted Stock Units.

Section 6.2 of the Plan shall be modified as it applies to Canadian Employees
such that the Company agrees to issue only Shares in payment of RSUs to a
Canadian Employee and the Company cannot choose, at its option, to make such
payment in cash or a combination of cash and Shares, and section 6.2 shall read
as follows:

“6.2. Form and Timing of Settlement to Canadian Employees. Payment of earned
RSUs of a Canadian Employee shall be made as soon as practicable after the
date(s) determined by the Committee and set forth in the Award Agreement. Such
earned RSUs shall be settled solely by the issuance of Shares. The Committee may
permit a Canadian Employee to defer settlement and the issuance of Shares in
payment of an earned RSU to a date that is acceptable to the Committee, provided
that the terms of the Award Agreement, the RSUs and any deferral meet the
conditions of section 7 of the Income Tax Act (Canada).”

 

5.

Payment for Share Purchases.

Section 7(b) of the Plan shall be modified as at applies to Canadian Employees
with respect to the consideration that may be paid by Canadian Employees for
Shares purchased pursuant to the Plan. In no circumstances shall a Canadian
Employee be permitted to make, and the Committee shall not approve, a payment by
the Canadian Employee by the surrender of any Shares that were acquired at any
time by the Canadian Employee on the exercise of any Option.

 

6.

Withholding Taxes.

 

  (a)

Section 8.1 of the Plan shall be modified as it applies to Canadian Employees
and shall read as follows:

“8.1 Withholding for Canadian Employees. The Company or any Affiliate may take
such reasonable steps for the deduction and withholding of any taxes and other
required source deductions which the Company or Affiliate, as the case may be,
is required by law or regulation of any governmental authority whatsoever to
remit in connection with the exercise or settlement of any Award granted to a
Canadian Employee. Without limiting the generality of the foregoing, whenever a
settlement or payment is made by the issuance of Shares to a Canadian Employee
in satisfaction of Awards granted under this Plan, the Company or Affiliate, as
the case may be, may, at its discretion (i) deduct and withhold those amounts it
is required to remit from any cash remuneration or other amount payable to the
Canadian Employee, whether or not such amount payable is related to the Plan, or
the exercise or settlement of any Awards; (ii) permit the Canadian Employee to
make a cash payment to the Company or Affiliate, as the case may be, equal to
the amount required to be remitted; or (iii) sell, on behalf of the Canadian
Employee, that number of Shares to be issued on the exercise or settlement such
that the amount of the proceeds of such sale will be sufficient to satisfy any
taxes or other source deductions required to be remitted for the account of the
Canadian Employee. If the Company or Affiliate, as the case may be, considers
that the foregoing steps undertaken in connection with this section 13.1 result
in inadequate withholding or a late remittance of taxes or other source
deductions, then the delivery of Shares to be issued on the exercise or
settlement of Awards may be made conditional upon the Canadian Employee (or
other person) reimbursing or compensating the Company or Affiliate or making
arrangements satisfactory to the Company or Affiliate for the payment in a
timely manner of all taxes and other source deductions required to be remitted.”

 

  (b)

Section 8.2 of the Plan shall not apply to Canadian Employees. For greater
certainty, the Committee shall not approve funding by a Canadian Employee of
withholding taxes or other source deductions by the withholding of Shares the
Canadian Employee is otherwise entitled to receive or the surrender by the
Canadian Employee of any Shares that were acquired at any time by the Canadian
Employee on the exercise of any Option.

 

A-2

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NOTICE OF STOCK OPTION GRANT

SIERRA ONCOLOGY, INC. 2018 EQUITY INDUCEMENT

PLAN

Unless otherwise defined herein, the terms defined in the Sierra Oncology, Inc.
(the “Company”) 2018 Equity Inducement Plan (the “Plan”) shall have the same
meanings in this Notice of Stock Option Grant (the “Notice of Grant”) and the
attached Stock Option Agreement (the “Option Agreement”). You have been granted
an Option to purchase shares of Common Stock of the Company under the Plan
subject to the terms and conditions of the Plan, this Notice of Grant and the
attached Option Agreement.

Name:                                                                  
                                         
                                         
                                         
                                              

Address:                                                                  
                                         
                                         
                                         
                                         

 

Date of Grant:                                         
                                  Vesting Commencement Date:  
                                                                        
Exercise Price per Share:                                         
                                  Total Number of Shares:  
                                                                         Type of
Option:   Non-Qualified Stock Option    Expiration Date:                       ,
20    ; This Option expires earlier if your Service terminates earlier, as
described in the Stock Option Agreement. Vesting Schedule:      Additional
Terms:   If this box is checked, the additional terms and conditions set forth
on Attachment 1 hereto (as executed by the Company) are applicable and are
incorporated herein by reference. No document need be attached as Attachment 1
if the box is not checked.

You understand that your employment relationship with the Company is for an
unspecified duration, can be terminated at any time (i.e., is “at-will”), and
that nothing in this Notice, the Option Agreement or the Plan changes the
at-will nature of that relationship. By accepting this Option, you and the
Company agree that this Option is granted under and governed by the terms and
conditions of the Plan, the Notice of Grant and the Option Agreement. By
accepting this Option, you consent to electronic delivery as set forth in the
Option Agreement.

 

PARTICIPANT:     SIERRA ONCOLOGY, INC.

 

    By: Signature:                                    
                                                        
Name:                                     
                                                        
Print Name:                                   
                                                      
Its:                                     
                                                              

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

STOCK OPTION AGREEMENT

SIERRA ONCOLOGY, INC.

2018 EQUITY INDUCEMENT PLAN

You have been granted an Option by Sierra Oncology, Inc. (the “Company”) under
the 2018 Equity Inducement Plan (the “Plan”) to purchase Shares (the “Option”),
subject to the terms, restrictions and conditions of the Plan, the Notice of
Stock Option Grant (the “Notice of Grant”) and this Stock Option Agreement (the
“Agreement”).

1. Grant of Option. You have been granted an Option for the number of Shares set
forth in the Notice of Grant at the exercise price per Share set forth in the
Notice of Grant (the “Exercise Price”). In the event of a conflict between the
terms and conditions of the Plan and the terms and conditions of this Agreement,
the terms and conditions of the Plan shall prevail. The Option is designated as
a Nonqualified Stock Option (“NSO”).

2. Termination Period.

(a) General Rule. If your Service terminates for any reason except death or
Disability, and other than for Cause, then this Option will expire at the close
of business at Company headquarters on the date three (3) months after your
termination of Service (subject to the expiration detailed in Section 6). If
your Service is terminated for Cause, this Option will expire upon the date of
such termination. The Company determines when your Service terminates for all
purposes under this Agreement. You acknowledge and agree that the Vesting
Schedule may change prospectively in the event that your service status changes
between full and part-time status in accordance with Company policies relating
to work schedules and vesting of awards. You acknowledge that the vesting of the
Shares pursuant to this Notice is earned only by continuing Service and that any
unvested portion of your Option will expire on the termination of your
employment for any reason.

(b) Death; Disability. If you die before your Service terminates (or you die
within three (3) months of your termination of Service other than for Cause),
then this Option will expire at the close of business at Company headquarters on
the date twelve (12) months after the date of your death (subject to the
expiration detailed in Section 6). If your Service terminates because of your
Disability, then this Option will expire at the close of business at Company
headquarters on the date twelve (12) months after your termination date (subject
to the expiration detailed in Section 6).

(c) Black-Out Period. Notwithstanding the foregoing, if any post-termination
exercise period set forth above terminates on a date that falls within a
Blackout Period (as defined below) or within ten (10) business days following
the expiration of a Blackout Period, such expiration date shall be automatically
extended without any further act or formality to that date which is ten
(10) business days after the end of such Blackout Period, with such tenth (10th)
business day to be considered the expiration date of such Option for all
purposes under the Plan, subject to earlier expiration detailed in Section 6.
For purposes of this Agreement, “Blackout Period” means the period during which
designated directors, officers and employees of the Company cannot trade Shares
pursuant to the Company’s policy respecting restrictions on director’, officers’
and employee trading which is in effect at the time.

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

(d) No Notice. You are responsible for keeping track of these exercise periods
following your termination of Service for any reason. The Company will not
provide further notice of such periods. In no event shall this Option be
exercised later than the Expiration Date set forth in the Notice of Grant.

3. Exercise of Option.

(a) Right to Exercise. This Option is exercisable during its term in accordance
with the Vesting Schedule set forth in the Notice of Grant and the applicable
provisions of the Plan and this Agreement. In the event of your death,
Disability, or other cessation of Service, the exercisability of the Option is
governed by the applicable provisions of the Plan, the Notice of Grant and this
Agreement. This Option may not be exercised for a fraction of a Share.

(b) Method of Exercise. This Option is exercisable by delivery of an exercise
notice in a form specified by the Company (the “Exercise Notice”), which shall
state the election to exercise the Option, the number of Shares in respect of
which the Option is being exercised (the “Exercised Shares”), and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan. The Exercise Notice shall be delivered in person, by
mail, via electronic mail or facsimile or by other authorized method to the
Secretary of the Company or other person designated by the Company. The Exercise
Notice shall be accompanied by payment of the aggregate Exercise Price as to all
Exercised Shares. This Option shall be deemed to be exercised upon receipt by
the Company of a fully executed Exercise Notice accompanied by the aggregate
Exercise Price and any applicable tax withholding due upon exercise of the
Option.

(c) Exercise by Another. If another person wants to exercise this Option after
it has been transferred to him or her in compliance with this Agreement and the
Plan, that person must prove to the Company’s satisfaction that he or she is
entitled to exercise this Option. That person must also complete the proper
Exercise Notice form (as described above) and pay the Exercise Price (as
described below) and any applicable tax withholding due upon exercise of the
Option (as described below).

4. Method of Payment. Payment of the aggregate Exercise Price shall be by
personal check, wire transfer, cashier’s check, or, with the Company’s consent;
any of the following, or a combination thereof:

(a) certificates for shares of Company stock that you own, along with any forms
needed to effect a transfer of those shares to the Company; the Fair Market
Value of the shares, determined as of the effective date of the Option exercise,
will be applied to the Option Exercise Price. Instead of surrendering shares of
Company stock, you may attest to the ownership of those shares on a form
provided by the Company and have the same number of shares subtracted from the
Option shares issued to you. However, you may not surrender, or attest to the
ownership of, shares of Company stock in payment of the Exercise Price of your
Option if your action would cause the Company to recognize compensation expense
(or additional compensation expense) with respect to this Option for financial
reporting purposes;

(b) cashless exercise through irrevocable directions to a securities broker
approved by the Company to sell all or part of the Shares covered by this Option
and to deliver to the Company from the sale proceeds an amount sufficient to pay
the Option Exercise Price and any withholding taxes. The balance of the sale
proceeds, if any, will be delivered to you. The directions must be given by
signing a special notice of exercise form provided by the Company; or

(c) other method authorized by the Company.

 

2

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5. Non-Transferability of Option. In general, except as provided below, only you
may exercise this Option prior to your death. You may not transfer or assign
this Option, except as provided below. For instance, you may not sell this
Option or use it as security for a loan. If you attempt to do any of these
things, this Option will immediately become invalid. You may, however, dispose
of this Option in your will or in a beneficiary designation. However, the
Committee (as defined in the Plan) may, in its sole discretion, allow you to
transfer this Option as a gift to one or more family members. For purposes of
this Agreement, “family member” means a child, stepchild, grandchild, parent,
stepparent, grandparent, 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 individual sharing your
household (other than a tenant or employee), a trust in which one or more of
these individuals have more than 50% of the beneficial interest, a foundation in
which you or one or more of these persons control the management of assets, and
any entity in which you or one or more of these persons own more than 50% of the
voting interest. In addition, the Committee may, in its sole discretion, allow
you to transfer this Option to your spouse or former spouse pursuant to a
domestic relations order in settlement of marital property rights. The Committee
will allow you to transfer this Option only if both you and the transferee(s)
execute the forms prescribed by the Committee, which include the consent of the
transferee(s) to be bound by this Agreement. This Option may not be transferred
in any manner other than by will or by the laws of descent or distribution or
court order and may be exercised during the lifetime of you only by you, your
guardian, or legal representative, as permitted in the Plan. The terms of the
Plan and this Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of you.

6. Term of Option. This Option shall in any event expire on the expiration date
set forth in the Notice of Grant, which date is ten (10) years after the grant
date.

7. Tax Consequences. You should consult a tax adviser for tax consequences
relating to this Option in the jurisdiction in which you are subject to tax. YOU
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES. You will not be allowed to exercise this Option unless you make
arrangements acceptable to the Company to pay any withholding taxes that may be
due as a result of the Option exercise.

8. Withholding Taxes and Stock Withholding. Regardless of any action the Company
or your actual employer (the “Employer”) takes with respect to any or all income
tax, social insurance, payroll tax, payment on account or other tax-related
withholding (“Tax-Related Items”), you acknowledge that the ultimate liability
for all Tax-Related Items legally due by you is and remains your responsibility
and that the Company and/or the Employer (1) make no representations or
undertakings regarding the treatment of any Tax-Related Items in connection with
any aspect of the Option grant, including the grant, vesting or exercise of the
Option, the subsequent sale of Shares acquired pursuant to such exercise and the
receipt of any dividends; and (2) do not commit to structure the terms of the
grant or any aspect of the Option to reduce or eliminate your liability for
Tax-Related Items. You acknowledge that if you are subject to Tax-Related Items
in more than one jurisdiction, the Company and/or the Employer may be required
to withhold or account for Tax-Related Items in more than one jurisdiction.

Prior to exercise of the Option, you shall pay or make adequate arrangements
satisfactory to the Company and/or the Employer to satisfy all withholding and
payment on account obligations of the Company and/or the Employer. In this
regard, you authorize the Company and/or the Employer to withhold all applicable
Tax-Related Items legally payable by you from your wages or other cash
compensation paid to you by the Company and/or the Employer. With the Company’s
consent, these arrangements may also include, if permissible under local law,
(a) withholding Shares that otherwise would be issued to you when you exercise
this Option, by considering applicable statutory or other withholding rates,
including up to maximum rates, (b) having the Company withhold taxes from the
proceeds of the sale of the Shares, either through a voluntary sale or through a
mandatory sale arranged by the Company (on your behalf and you

 

3

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hereby authorize such sales by this authorization), (c) your payment of a cash
amount, or (d) any other arrangement approved by the Company; all under such
rules as may be established by the Committee and in compliance with the any
insider trading or 10b-51 trading policies of the Company, if applicable;
provided however, that if you are a Section 16 officer of the Company under the
Exchange Act, then the Committee (as constituted in accordance with Rule 16b-3
under the Exchange Act) shall establish the method of withholding from
alternatives (a)-(d) above, and the Committee shall establish the method prior
to the Tax-Related Items withholding event. The Fair Market Value of these
Shares, determined as of the effective date of the Option exercise, will be
applied as a credit against the withholding taxes. You shall pay to the Company
or the Employer any amount of Tax-Related Items that the Company or the Employer
may be required to withhold as a result of your participation in the Plan or
your purchase of Shares that cannot be satisfied by the means previously
described. Finally, you acknowledge that the Company has no obligation to
deliver Shares to you until you have satisfied the obligations in connection
with the Tax-Related Items as described in this Section.

9. Acknowledgement. The Company and you agree that the Option is granted under
and governed by the Notice of Grant, this Agreement and the provisions of the
Plan (incorporated herein by reference). You: (i) acknowledge receipt of a copy
of the Plan prospectus, (ii) represent that you have carefully read and are
familiar with their provisions, and (iii) hereby accept the Option subject to
all of the terms and conditions set forth herein and those set forth in the Plan
and the Notice of Grant. You hereby agree to accept as binding, conclusive and
final all decisions or interpretations of the Committee upon any questions
relating to the Plan, the Notice of Grant and the Agreement.

10. Consent to Electronic Delivery of All Plan Documents and Disclosures. By
your acceptance of this Option, you consent to the electronic delivery of the
Notice of Grant, this Agreement, account statements, Plan prospectuses required
by the Securities and Exchange Commission, U.S. financial reports of the
Company, and all other documents that the Company is required to deliver to its
security holders (including, without limitation, annual reports and proxy
statements) or other communications or information related to the Option.
Electronic delivery may include the delivery of a link to a Company intranet or
the internet site of a third party involved in administering the Plan, the
delivery of the document via e-mail or such other delivery determined at the
Company’s discretion. You acknowledge that you may receive from the Company a
paper copy of any documents delivered electronically at no cost if you contact
the Company by telephone, through a postal service or electronic mail at
_____________. You further acknowledge that you will be provided with a paper
copy of any documents delivered electronically if electronic delivery fails;
similarly, you understand that you must provide on request to the Company or any
designated third party a paper copy of any documents delivered electronically if
electronic delivery fails. Also, you understand that your consent may be revoked
or changed, including any change in the electronic mail address to which
documents are delivered (if you have provided an electronic mail address), at
any time by notifying the Company of such revised or revoked consent by
telephone, postal service or electronic mail at ______________. Finally, you
understand that you are not required to consent to electronic delivery.

11. Compliance with Laws and Regulations. The exercise of this Option will be
subject to and conditioned upon compliance by the Company and you with all
applicable state, federal and foreign laws and regulations and with all
applicable requirements of any stock exchange or automated quotation system on
which the Company’s Common Stock may be listed or quoted at the time of such
issuance or transfer. The Shares issued pursuant to this Agreement shall be
endorsed with appropriate legends, if any, determined by the Company.

 

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12. Governing Law; Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of this
Agreement shall be interpreted as if such provision were so excluded and
(iii) the balance of this Agreement shall be enforceable in accordance with its
terms. This Agreement and all acts and transactions pursuant hereto and the
rights and obligations of the parties hereto shall be governed, construed and
interpreted in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of law. For purposes of litigating any dispute
that may arise directly or indirectly from the Plan, the Notice and this
Agreement, the parties hereby submit and consent to litigation in the exclusive
jurisdiction of the State of Delaware.

13. No Rights as Employee. Nothing in this Agreement shall affect in any manner
whatsoever the right or power of the Company, or a Parent, Subsidiary or
Affiliate of the Company, to terminate your Service, for any reason, with or
without Cause.

14. Adjustment. In the event of a stock split, a stock dividend or a similar
change in Company stock, the number of Shares covered by this Option and the
Exercise Price per Share may be adjusted pursuant to the Plan.

15. Award Subject to Company Clawback or Recoupment. To the extent permitted by
applicable law, the Option shall be subject to clawback or recoupment pursuant
to any compensation clawback or recoupment policy adopted by the Board or
required by law during the term of your employment or other Service that is
applicable to you. In addition to any other remedies available under such
policy, applicable law may require the cancellation of your Option (whether
vested or unvested) and the recoupment of any gains realized with respect to
your Option.

16. Entire Agreement; Enforcement of Rights. This Agreement, the Plan and the
Notice constitute the entire agreement and understanding of the parties relating
to the subject matter herein and supersede all prior discussions between them.
Any prior agreements, commitments or negotiations concerning this Option are
superseded. No modification of or amendment to this Agreement, nor any waiver of
any rights under this Agreement, shall be effective unless in writing and signed
by the parties to this Agreement. The failure by either party to enforce any
rights under this Agreement shall not be construed as a waiver of any rights of
such party.

BY ACCEPTING THIS OPTION, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED
ABOVE AND IN THE PLAN.

 

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