Exhibit 10.1

Sangamo Therapeutics, Inc.

2018 Equity Incentive Plan

Adopted by the Compensation Committee of the Board: April 23, 2018

Approved by the Stockholders: June 11, 2018

Amended and Restated by the Compensation Committee of the Board: March 20, 2020

Approved by the Stockholders: May 18, 2020

Table of Contents

 

1. General

     1  

2. Shares Subject to the Plan

     1  

3. Eligibility

     2  

4. Options and Stock Appreciation Rights

     2  

5. Awards Other Than Options and Stock Appreciation Rights

     5  

6. Adjustments upon Changes in Common Stock; Other Corporate Events

     6  

7. Automatic Grants To Eligible Directors

     7  

8. Administration

     8  

9. Tax Withholding

     9  

10. Miscellaneous

     10  

11. Covenants of the Company

     12  

12. Additional Rules for Awards Subject to Section 409A

     13  

13. Severability

     15  

14. Termination of the Plan

     15  

15. Definitions

     15  

1. General.

(a) Successor to and Continuation of Predecessor Plan. The Plan is the successor
to and continuation of the Predecessor Plan. As of the Effective Date, (i) no
additional awards may be granted under the Predecessor Plan; (ii) the
Predecessor Plan’s Available Reserve will become available for issuance pursuant
to Awards granted under this Plan; and (iii) all outstanding awards granted
under the Prior Plans will remain subject to the terms of the Prior Plans;
provided, however, that any Prior Plans’ Returning Shares will become available
for issuance pursuant to Awards granted under this Plan. All Awards granted
under this Plan will be subject to the terms of this Plan.

(b) Eligible Award Recipients and Plan Purpose. Subject to the terms of the
Plan, Employees, Directors and Consultants are eligible to receive Awards. Only
Eligible Directors will receive Awards under the Automatic Grant Program. The
Company, by means of the Plan, seeks to secure and retain the services of such
persons, to provide incentives for such persons to exert maximum efforts for the
success of the Company and any Affiliate and to provide a means by which such
persons may be given an opportunity to benefit from increases in value of the
Common Stock through the granting of Awards.

(c) Available Awards. The Plan provides for the grant of the following Awards:
(i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) SARs; (iv)
Restricted Stock Awards; (v) RSU Awards; (vi) Performance Awards; and
(vii) Other Awards.

(d) Effective Date. The Plan will come into existence on the Effective Date. No
Award may be granted under the Plan prior to the Effective Date.

2. Shares Subject to the Plan.

(a) Share Reserve.

(i) Subject to the adjustments in this Section 2 and in Section 6(a), the
aggregate number of shares of Common Stock that may be issued pursuant to Awards
will not exceed the sum of: (A) 8,800,000 shares (which were approved at the
Annual Meeting in 2018); plus (B) 9,900,000 shares (which were approved at the
Annual Meeting in 2020); plus (C) the number of Prior Plans’ Returning Shares,
if any, as such shares become available from time to time; plus (D) 1,703,964
shares (which is the Predecessor Plan’s Available Reserve).

 

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(ii) The number of shares of Common Stock available for issuance under the Plan
will be reduced by: (A) one share for each share of Common Stock issued pursuant
to an Appreciation Award granted under the Plan and (B) 1.33 shares for each
share of Common Stock issued pursuant to a Full Value Award granted under the
Plan.

(iii) The number of shares of Common Stock available for issuance under the Plan
will be increased by: (A) one share for each Prior Plans’ Returning Share or
2018 Plan Returning Share (as defined in Section 2(d)(i)) subject to an
Appreciation Award and (B) 1.33 shares for each Prior Plans’ Returning Share or
2018 Plan Returning Share (as defined in Section 2(d)(i)) subject to a Full
Value Award.

(b) Incentive Stock Option Limit. Notwithstanding anything to the contrary in
Section 2(a) and subject to Section 6(a) regarding Capitalization Adjustments,
the aggregate maximum number of shares of Common Stock that may be issued
pursuant to the exercise of Incentive Stock Options is 37,400,000 shares.

(c) Actions that Will Not Constitute Issuance of Shares and Will Not Reduce
Share Reserve. The following actions will not result in an issuance of shares of
Common Stock under the Plan and accordingly will not reduce the number of shares
of Common Stock subject to the Share Reserve and available for issuance under
the Plan: (i) the expiration or termination of any portion of an Award without
the shares covered by such portion of the Award having been issued; or (ii) the
settlement of any portion of an Award in cash (i.e., the Participant receives
cash rather than shares of Common Stock).

(d) Reversion of Shares to the Share Reserve.

(i) Shares Available For Subsequent Issuance. If any shares of Common Stock
issued pursuant to an Award are forfeited back to or repurchased by the Company
because of the failure to meet a contingency or condition required for the
vesting of such shares, then such shares will revert to the Share Reserve and
become available again for issuance under the Plan and, for purposes of the
Plan, such shares will be the “2018 Plan Returning Shares”.

(ii) Shares Not Available For Subsequent Issuance. The following shares of
Common Stock will not become available again for issuance under the Plan:
(A) any shares that are reacquired or withheld (or not issued) by the Company to
satisfy the exercise or purchase price of an Appreciation Award or a Full Value
Award (including any shares subject to such award that are not delivered because
such award is exercised through a reduction of shares subject to such award
(i.e., “net exercised”)); (B) any shares that are reacquired or withheld (or not
issued) by the Company to satisfy a tax withholding obligation in connection
with an Appreciation Award or a Full Value Award; (C) any shares repurchased by
the Company on the open market with the proceeds of the exercise or purchase
price of an Appreciation Award or a Full Value Award; and (D) in the event that
a Stock Appreciation Right granted under the Plan or a stock appreciation right
granted under any of the Prior Plans is settled in shares of Common Stock, the
gross number of shares of Common Stock subject to such award.

(e) Share Reserve Limit. For clarity, the Share Reserve limit in Section 2(a) is
a limit on the number of shares of Common Stock that may be issued pursuant to
Awards and does not limit the granting of Awards, except that the Company will
keep available at all times the number of shares of Common Stock reasonably
required to satisfy its obligations to issue shares pursuant to such Awards.
Shares may be issued in connection with a merger or acquisition as permitted by,
as applicable, Nasdaq Listing Rule 5635(c), NYSE Listed Company Manual
Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and
such issuance will not reduce the number of shares available for issuance under
the Plan.

3. Eligibility.

(a) Eligibility for Specific Awards. Incentive Stock Options may be granted only
to Employees of the Company or a “parent corporation” or “subsidiary
corporation” thereof (as such terms are defined in Sections 424(e) and (f) of
the Code). Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants; provided, however, that Nonstatutory Stock
Options and SARs may not be granted to Employees, Directors and Consultants who
are providing Continuous Service only to any “parent” of the Company (as such
term is defined in Rule 405) unless the stock underlying such Awards is treated
as “service recipient stock” under Section 409A because the Awards are granted
pursuant to a corporate transaction (such as a spin off transaction) or unless
such Awards otherwise comply with the distribution requirements of Section 409A.

(b) Ten Percent Stockholders. A Ten Percent Stockholder may not be granted an
Incentive Stock Option unless (i) the exercise price of such Option is at least
110% of the Fair Market Value on the date of grant of such Option and (ii) the
Option is not exercisable after the expiration of five years from the date of
grant of such Option.

4. Options and Stock Appreciation Rights.

Each Option and SAR will have such terms and conditions as determined by the
Board. Each Option will be designated in writing as an Incentive Stock Option or
Nonstatutory Stock Option at the time of grant; provided, however, that if an
Option is not so designated, then such Option will be a Nonstatutory Stock
Option, and the shares purchased upon exercise of each type of Option will be
separately accounted for. The terms and conditions of separate Options and SARs
need not be identical; provided, however, that each Option Agreement and SAR
Agreement will conform (through incorporation of provisions hereof by reference
in the Award Agreement or otherwise) to the substance of each of the following
provisions:

(a) Term. Subject to Section 3(b) regarding Ten Percent Stockholders, no Option
or SAR will be exercisable after the expiration of ten years from the date of
grant of such Award or such shorter period specified in the Award Agreement.

 

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(b) Exercise or Strike Price. Subject to Section 3(b) regarding Ten Percent
Stockholders, the exercise or strike price of each Option or SAR will not be
less than 100% of the Fair Market Value on the date of grant of such Award.
Notwithstanding the foregoing, an Option or SAR may be granted with an exercise
or strike price lower than 100% of the Fair Market Value on the date of grant of
such Award if such Award is granted pursuant to an assumption of or substitution
for another option or stock appreciation right pursuant to a Change in Control
and in a manner consistent with the provisions of Sections 409A and, if
applicable, 424(a) of the Code. Each SAR will be denominated in shares of Common
Stock equivalents.

(c) Exercise Procedure and Payment of Exercise Price for Options. In order to
exercise an Option, the Participant must provide notice of exercise to the Plan
Administrator in accordance with the procedures specified in the Option
Agreement. The Board has the authority to grant Options that do not permit all
of the following methods of payment (or otherwise restrict the ability to use
certain methods) and to grant Options that require the consent of the Company to
utilize a particular method of payment. The exercise price of an Option may be
paid, to the extent permitted by Applicable Law and as determined by the Board,
by one or more of the following methods of payment to the extent set forth in
the Option Agreement:

(i) by cash or check, bank draft or money order payable to the Company;

(ii) pursuant to a “cashless exercise” program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of the
Common Stock subject to the Option, results in either the receipt of cash (or
check) by the Company or the receipt of irrevocable instructions to pay the
exercise price to the Company from the sales proceeds;

(iii) by delivery to the Company (either by actual delivery or attestation) of
shares of Common Stock that are already owned by the Participant free and clear
of any liens, claims, encumbrances or security interests, with a Fair Market
Value on the date of exercise that does not exceed the exercise price, provided
that (A) at the time of exercise the Common Stock is publicly traded, (B) any
remaining balance of the exercise price not satisfied by such delivery is paid
by the Participant in cash or other permitted form of payment, (C) such delivery
would not violate any Applicable Law or agreement restricting the redemption of
the Common Stock, (D) any certificated shares are endorsed or accompanied by an
executed assignment separate from certificate, and (E) such shares have been
held by the Participant for any minimum period necessary to avoid adverse
accounting treatment as a result of such delivery;

(iv) if the Option is a Nonstatutory Stock Option, by a “net exercise”
arrangement pursuant to which the Company will reduce the number of shares of
Common Stock issuable upon exercise by the largest whole number of shares with a
Fair Market Value on the date of exercise that does not exceed the exercise
price, provided that (A) any remaining balance of the exercise price not
satisfied by such net exercise is paid by the Participant in cash or other
permitted form of payment, and (B) shares of Common Stock will no longer be
subject to such Option and will not be exercisable thereafter to the extent that
shares issuable upon exercise are reduced to pay the exercise price pursuant to
such “net exercise;” or

(v) in any other form of consideration that may be acceptable to the Board and
permissible under Applicable Law.

(d) Exercise Procedure and Payment of Appreciation Distribution for SARs. In
order to exercise any SAR, the Participant must provide notice of exercise to
the Plan Administrator in accordance with the SAR Agreement. The appreciation
distribution payable to a Participant upon the exercise of a SAR will not be
greater than an amount equal to the excess of (i) the aggregate Fair Market
Value on the date of exercise of a number of shares of Common Stock equal to the
number of Common Stock equivalents that are vested and being exercised under
such SAR, over (ii) the strike price of such SAR. Such appreciation distribution
may be paid to the Participant in the form of Common Stock or cash (or any
combination of Common Stock and cash) or in any other form of payment, as
determined by the Board and specified in the SAR Agreement.

(e) Transferability. Options and SARs may not be transferred to third party
financial institutions for value. The Board may impose such additional
limitations on the transferability of an Option or SAR. In the absence of any
such determination, the following restrictions on the transferability of Options
and SARs will apply, provided that except as explicitly provided herein, neither
an Option nor a SAR may be transferred for consideration and provided, further,
that if an Option is an Incentive Stock Option, such Option may be deemed to be
a Nonstatutory Stock Option as a result of such transfer:

(i) Restrictions on Transfer. An Option or SAR will not be transferable, except
by will or by the laws of descent and distribution, and will be exercisable
during the lifetime of the Participant only by the Participant; provided,
however, that the Board may permit transfer of an Option or SAR in a manner that
is not prohibited by applicable tax and securities laws upon the Participant’s
request, including to a trust if the Participant is considered to be the sole
beneficial owner of such trust (as determined under Section 671 of the Code and
applicable state law) while such Option or SAR is held in such trust, provided
that the Participant and the trustee enter into a transfer and other agreements
required by the Company.

 

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(ii) Domestic Relations Orders. Notwithstanding the foregoing, subject to the
execution of transfer documentation in a format acceptable to the Company, an
Option or SAR may be transferred pursuant to a domestic relations order.

(f) Vesting. Subject to Section 10(a), the Board may impose such restrictions on
or conditions to the vesting and/or exercisability of an Option or SAR as
determined by the Board and which may vary. Except as otherwise provided in the
Award Agreement or other written agreement between a Participant and the Company
or an Affiliate, vesting of Options and SARs will cease upon termination of the
Participant’s Continuous Service.

(g) Termination of Continuous Service. Subject to Section 4(h), if a
Participant’s Continuous Service terminates for any reason other than for Cause,
the Participant may exercise his or her Option or SAR to the extent vested, but
only within the following period of time or, if applicable, such other period of
time provided in the Award Agreement or other written agreement between a
Participant and the Company or an Affiliate; provided, however, that in no event
may such Award be exercised after the expiration of its maximum term (as set
forth in Section 4(a)):

(i) three months following the date of such termination if such termination is a
termination without Cause (other than any termination due to the Participant’s
Disability or death);

(ii) 12 months following the date of such termination if such termination is due
to the Participant’s Disability;

(iii) 18 months following the date of such termination if such termination is
due to the Participant’s death; or

(iv) 18 months following the date of the Participant’s death if such death
occurs following the date of such termination but during the period such Award
is otherwise exercisable (as provided in (i) or (ii) above).

Following the date of such termination, to the extent the Participant does not
exercise such Award within the applicable Post-Termination Exercise Period (or,
if earlier, prior to the expiration of the maximum term of such Award), such
unexercised portion of the Award will terminate, and the Participant will have
no further right, title or interest in the terminated Award, the shares of
Common Stock subject to the terminated Award, or any consideration in respect of
the terminated Award.

(h) Extension of Exercisability. Except as otherwise provided in the Award
Agreement or other written agreement between a Participant and the Company or an
Affiliate, if a Participant’s Continuous Service terminates for any reason other
than for Cause and, at any time during the last thirty days of the applicable
Post-Termination Exercise Period: (i) the exercise of the Participant’s Option
or SAR would be prohibited solely because the issuance of shares of Common Stock
upon such exercise would violate Applicable Law, or (ii) the immediate sale of
any shares of Common Stock issued upon such exercise would violate the Company’s
Trading Policy, then the applicable Post-Termination Exercise Period will be
extended to the last day of the calendar month that commences following the date
the Award would otherwise expire, with an additional extension of the exercise
period to the last day of the next calendar month to apply if any of the
foregoing restrictions apply at any time during such extended exercise period,
generally without limitation as to the maximum permitted number of extensions);
provided, however, that in no event may such Award be exercised after the
expiration of its maximum term (as set forth in Section 4(a)).

(i) Termination of Continuous Service for Cause. Except as explicitly otherwise
provided in the Award Agreement or other written agreement between a Participant
and the Company or an Affiliate, if a Participant’s Continuous Service is
terminated for Cause, the Participant’s Options and SARs will terminate and be
forfeited immediately upon such termination of Continuous Service, and the
Participant will be prohibited from exercising any portion (including any vested
portion) of such Awards on and after the date of such termination of Continuous
Service and the Participant will have no further right, title or interest in
such forfeited Award, the shares of Common Stock subject to the forfeited Award,
or any consideration in respect of the forfeited Award.

(j) Non-Exempt Employees. No Option or SAR, whether or not vested, granted to an
Employee who is a non-exempt employee for purposes of the Fair Labor Standards
Act of 1938, as amended, will be first exercisable for any shares of Common
Stock until at least six months following the date of grant of such Award.
Notwithstanding the foregoing, in accordance with the provisions of the Worker
Economic Opportunity Act, any vested portion of such Award may be exercised
earlier than six months following the date of grant of such Award in the event
of (i) such Participant’s death or Disability, (ii) a Change in Control in which
such Award is not assumed, continued or substituted, or (iii) such Participant’s
retirement (as such term may be defined in the Award Agreement or another
applicable agreement or, in the absence of any such definition, in accordance
with the Company’s then current employment policies and guidelines). This
Section 4(j) is intended to operate so that any income derived by a non-exempt
employee in connection with the exercise or vesting of an Option or SAR will be
exempt from his or her regular rate of pay.

(k) Whole Shares. Options and SARs may be exercised only with respect to whole
shares of Common Stock or their equivalents.

 

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5. Awards Other Than Options and Stock Appreciation Rights.

(a) Restricted Stock Awards and RSU Awards. Each Restricted Stock Award and RSU
Award will have such terms and conditions as determined by the Board. The terms
and conditions of separate Restricted Stock Awards and RSU Awards need not be
identical; provided, however, that each Restricted Stock Award Agreement and RSU
Award Agreement will conform (through incorporation of the provisions hereof by
reference in the Award Agreement or otherwise) to the substance of each of the
following provisions:

(i) Form of Award.

(1) To the extent consistent with the Company’s Bylaws, at the Board’s election,
shares of Common Stock subject to a Restricted Stock Award may be (i) held in
book entry form subject to the Company’s instructions until such shares become
vested or any other restrictions lapse, or (ii) evidenced by a certificate,
which certificate will be held in such form and manner as determined by the
Board. Unless otherwise determined by the Board, a Participant will have voting
and other rights as a stockholder of the Company with respect to any shares
subject to a Restricted Stock Award.

(2) A RSU Award represents a Participant’s right to be issued on a future date
the number of shares of Common Stock that is equal to the number of restricted
stock units subject to the RSU Award. As a holder of a RSU Award, a Participant
is an unsecured creditor of the Company with respect to the Company’s unfunded
obligation, if any, to issue shares of Common Stock in settlement of such Award
and nothing contained in the Plan or any RSU Award Agreement, and no action
taken pursuant to its provisions, will create or be construed to create a trust
of any kind or a fiduciary relationship between a Participant and the Company or
an Affiliate or any other person. A Participant will not have voting or any
other rights as a stockholder of the Company with respect to any RSU Award
(unless and until shares are actually issued in settlement of a vested RSU
Award).

(ii) Consideration.

(1) A Restricted Stock Award may be granted in consideration for (A) cash or
check, bank draft or money order payable to the Company, (B) past services to
the Company or an Affiliate, or (C) any other form of consideration (including
future services) as the Board may determine and permissible under Applicable
Law.

(2) Unless otherwise determined by the Board at the time of grant, a RSU Award
will be granted in consideration for the Participant’s services to the Company
or an Affiliate, such that the Participant will not be required to make any
payment to the Company (other than such services) with respect to the grant or
vesting of the RSU Award, or the issuance of any shares of Common Stock pursuant
to the RSU Award. If, at the time of grant, the Board determines that any
consideration must be paid by the Participant (in a form other than the
Participant’s services to the Company or an Affiliate) upon the issuance of any
shares of Common Stock in settlement of the RSU Award, such consideration may be
paid in any form of consideration as the Board may determine and permissible
under Applicable Law.

(iii) Vesting. Subject to Section 10(a), the Board may impose such restrictions
on or conditions to the vesting of a Restricted Stock Award or RSU Award as
determined by the Board and which may vary. Except as otherwise provided in the
Award Agreement or other written agreement between a Participant and the Company
or an Affiliate, vesting of Restricted Stock Awards and RSU Awards will cease
upon termination of the Participant’s Continuous Service.

(iv) Termination of Continuous Service. Except as otherwise provided in the
Award Agreement or other written agreement between a Participant and the Company
or an Affiliate, if a Participant’s Continuous Service terminates for any
reason, (i) the Company may receive through a forfeiture condition or a
repurchase right any or all of the shares of Common Stock held by the
Participant under his or her Restricted Stock Award that have not vested as of
the date of such termination as set forth in the Restricted Stock Award
Agreement and (ii) any portion of his or her RSU Award that has not vested will
be forfeited upon such termination and the Participant will have no further
right, title or interest in the RSU Award, the shares of Common Stock issuable
pursuant to the RSU Award, or any consideration in respect of the RSU Award.

(v) Settlement of RSU Awards. A RSU Award may be settled by the issuance of
shares of Common Stock or cash (or any combination thereof) or in any other form
of payment, as determined by the Board and specified in the RSU Award Agreement.
At the time of grant, the Board may determine to impose such restrictions or
conditions that delay such delivery to a date following the vesting of the RSU
Award.

(b) Performance Awards. With respect to any Performance Award, the length of any
Performance Period, the Performance Goals to be achieved during the Performance
Period, the other terms and conditions of such Award, and the measure of whether
and to what degree such Performance Goals have been attained will be determined
by the Board. In addition, to the extent permitted by Applicable Law and set
forth in the applicable Award Agreement, the Board may determine that cash may
be used in payment of Performance Awards.

(c) Other Awards. Other forms of Awards valued in whole or in part by reference
to, or otherwise based on, Common Stock may be granted either alone or in
addition to Awards provided for under Section 4 and the preceding provisions of
this Section 5. Subject to the provisions of the Plan, the Board will have sole
and complete discretion to determine the persons to whom and the time or times
at which such Other Awards will be granted, the number of shares of Common Stock
(or the cash equivalent thereof) to be granted pursuant to such Other Awards and
all other terms and conditions of such Other Awards.

 

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6. Adjustments upon Changes in Common Stock; Other Corporate Events.

(a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the
Board shall appropriately and proportionately adjust: (i) the class(es) and
maximum number of securities subject to the Plan pursuant to Section 2(a), (ii)
the class(es) and maximum number of securities that may be issued pursuant to
the exercise of Incentive Stock Options pursuant to Section 2(b), (iii) the
class(es) and number of securities to be granted pursuant to the Automatic Grant
Program, and (iv) the class(es) and number of securities and exercise price,
strike price or purchase price of stock subject to outstanding Awards. The Board
shall make such adjustments, and its determination shall be final, binding and
conclusive. Notwithstanding the provisions of this Section 6(a), no fractional
shares or rights for fractional shares of Common Stock shall be created pursuant
to this Section 6(a). The Board shall determine an equivalent benefit for any
fractional shares or fractional shares that might be created by the adjustments
referred to in this Section 6(a).

(b) Dissolution or Liquidation. Except as otherwise provided in the Award
Agreement, in the event of a dissolution or liquidation of the Company, all
outstanding Awards (other than Awards consisting of vested and outstanding
shares of Common Stock not subject to a forfeiture condition or the Company’s
right of repurchase) will terminate immediately prior to the completion of such
dissolution or liquidation, and the shares of Common Stock subject to the
Company’s repurchase rights or subject to a forfeiture condition may be
repurchased or reacquired by the Company notwithstanding the fact that the
holder of such Award is providing Continuous Service, provided, however, that
the Board may determine to cause some or all Awards to become fully vested,
exercisable and/or no longer subject to repurchase or forfeiture (to the extent
such Awards have not previously expired or terminated) before the dissolution or
liquidation is completed but contingent on its completion.

(c) Change in Control. The following provisions will apply to Awards in the
event of a Change in Control unless otherwise provided in the instrument
evidencing the Award or any other written agreement between the Company or any
Affiliate and the Participant or unless otherwise expressly provided by the
Board at the time of grant of the Award.

(i) Awards May Be Assumed. In the event of a Change in Control, any surviving
corporation or acquiring corporation (or the surviving or acquiring
corporation’s parent company) may assume or continue any or all Awards
outstanding under the Plan or may substitute similar stock awards for Awards
outstanding under the Plan (including but not limited to, awards to acquire the
same consideration paid to the stockholders of the Company pursuant to the
Change in Control), and any reacquisition or repurchase rights held by the
Company in respect of Common Stock issued pursuant to Awards may be assigned by
the Company to the successor of the Company (or the successor’s parent company,
if any), in connection with such Change in Control. A surviving corporation or
acquiring corporation (or its parent) may choose to assume or continue only a
portion of an Award or substitute a similar stock award for only a portion of a
Award, or may choose to assume or continue the Awards held by some, but not all
Participants. The terms of any assumption, continuation or substitution will be
set by the Board.

(ii) Awards Held by Current Eligible Participants. In the event of a Change in
Control in which the surviving corporation or acquiring corporation (or its
parent company) does not assume or continue such outstanding Awards or
substitute similar awards for such outstanding Awards, then with respect to
Awards that have not been assumed, continued or substituted and that are held by
Participants who are Employees or Directors and whose Continuous Service has not
terminated prior to the effective time of the Change in Control (referred to as
the “Current Eligible Participants”), the vesting of such Awards (and, with
respect to Options and Stock Appreciation Rights, the time when such Awards may
be exercised) will be accelerated in full to a date prior to the effective time
of such Change in Control (contingent upon the effectiveness of the Change in
Control) as the Board determines (or, if the Board does not determine such a
date, to the date that is five (5) days prior to the effective time of the
Change in Control), and such Awards will terminate if not exercised (if
applicable) at or prior to the effective time of the Change in Control, and any
reacquisition or repurchase rights held by the Company with respect to such
Awards will lapse (contingent upon the effectiveness of the Change in Control).

(iii) Awards Held by Persons other than Current Eligible Participants. In the
event of a Change in Control in which the surviving corporation or acquiring
corporation (or its parent company) does not assume or continue such outstanding
Awards or substitute similar stock awards for such outstanding Awards, then with
respect to Awards that have not been assumed, continued or substituted and that
are held by persons other than Current Eligible Participants, such Awards will
terminate if not exercised (if applicable) prior to the effective time of the
Change in Control; provided, however, that any reacquisition or repurchase
rights held by the Company with respect to such Awards will not terminate and
may continue to be exercised notwithstanding the Change in Control.

(iv) Payment for Awards in Lieu of Exercise. Notwithstanding the foregoing, in
the event a Award will terminate if not exercised prior to the effective time of
a Change in Control, the Board may provide, in its sole discretion, that the
holder of such Award may not exercise such Award but will receive a payment, in
such form as may be determined by the Board, equal in value, at the effective
time, to the excess, if any, of (A) the value of the property the Participant
would have received upon the exercise of the Award (including, at the discretion
of the Board, any unvested portion of such Award), over (B) any exercise price
payable by such holder in connection with such exercise.

 

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(d) Appointment of Stockholder Representative. As a condition to the receipt of
an Award under this Plan, a Participant will be deemed to have agreed that the
Award will be subject to the terms of any agreement governing a Change in
Control involving the Company, including, without limitation, a provision for
the appointment of a stockholder representative that is authorized to act on the
Participant’s behalf with respect to any escrow, indemnities and any contingent
consideration.

(e) No Restriction on Right to Undertake Transactions. The grant of any Award
under the Plan and the issuance of shares pursuant to any Award does not affect
or restrict in any way the right or power of the Company or the stockholders of
the Company to make or authorize any adjustment, recapitalization,
reorganization or other change in the Company’s capital structure or its
business, any merger or consolidation of the Company, any issue of stock or of
options, rights or options to purchase stock or of bonds, debentures, preferred
or prior preference stocks whose rights are superior to or affect the Common
Stock or the rights thereof or which are convertible into or exchangeable for
Common Stock, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.

7. Automatic Grants To Eligible Directors.

(a) General. The Automatic Grant Program set forth in this Section 7 provides
that Eligible Directors shall automatically receive the grant of certain Awards
at designated intervals over their period of Continuous Service on the Board.
For the avoidance of doubt, Awards granted under this Automatic Grant Program
are subject to all the terms and conditions of the Plan. Each Option granted
under this Automatic Grant Program shall (i) be a Nonstatutory Stock Option,
(ii) have an exercise price equal to one hundred percent (100%) of the Fair
Market Value on the date the Option is granted, and (iii) have a maximum term of
10 years. For the avoidance of doubt, any shares of Common Stock issued pursuant
to Awards granted under the Automatic Grant Program which may vest any earlier
than 12 months following the date of grant will count against the 5% permitted
exception to the minimum vesting requirements set forth in Section 10(a).

(b) Initial Awards. If an Eligible Director is first elected or appointed to
serve on the Board on or after the Annual Meeting in 2020, such person shall,
upon the date of his or her initial election or appointment as an Eligible
Director, be granted an Option to purchase 30,000 shares of Common Stock and a
RSU Award in respect of 15,000 shares of Common Stock (each such Option and RSU
Award an “Initial Award”). Initial Awards of Options shall vest monthly with
respect to 1/36th of the shares over the three year period following the date of
grant, subject to the Eligible Director’s Continuous Service through the
applicable vesting dates, so that the Option will be fully vested on the third
anniversary of the date of grant. Initial Awards of RSU Awards shall vest
annually with respect to 1/3rd of the shares over the three year period
following the date of grant, subject to the Eligible Director’s Continuous
Service through the applicable vesting dates, so that the RSU Award is fully
vested on the third anniversary of the date of grant.

(c) Annual Awards. Each person who is an Eligible Director shall be granted an
Option to purchase 20,000 shares of Common Stock and a RSU Award in respect of
10,000 shares of Common Stock (each such Option and RSU Award, an “Annual
Award”) on an annual basis as follows: (i) with respect to 2020, such Annual
Awards shall be granted on the date of the Annual Meeting in 2020; and (ii) with
respect to each year following 2020, such Annual Awards shall be granted on the
25th day of February of such year (or if such 25th day is not a trading day, the
immediately preceding trading day in February); in each case, provided that such
person is an Eligible Director on the date of grant, has served as an Eligible
Director for a period of at least three months prior to the date of grant, and
will continue serving as an Eligible Director immediately after the date of
grant. Annual Awards of Options shall vest monthly with respect to 1/12th of the
shares over the one (1) year period following the date of grant, subject to the
Eligible Director’s Continuous Service through the applicable vesting dates, so
that the Option will be fully vested on the first anniversary of the date of
grant. Annual Awards of RSU Awards granted in 2020 shall fully vest on the
earlier of (i) the first anniversary of the date of grant or (ii) the day prior
to the next Annual Meeting, subject to the Eligible Director’s Continuous
Service through such date. Annual Awards of RSU Awards granted in each year
following 2020 shall fully vest on the first anniversary of the date of grant,
subject to the Eligible Director’s Continuous Service through such date.

(d) Vesting Upon Change in Control or Hostile Take-Over. Each Option and RSU
Award granted pursuant to this Automatic Grant Program shall automatically fully
accelerate vesting immediately prior to the effectiveness of a Change in Control
or Hostile Take-Over, subject to the Eligible Director’s Continuous Service
through the date of the Change in Control or Hostile Take-Over, as applicable.

(e) Vesting Upon Death or Disability. If the Eligible Director’s Continuous
Service terminates due to death or Disability, such Eligible Director’s Options
and RSU Awards granted pursuant to this Automatic Grant Program shall
automatically fully vest.

 

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8. Administration.

(a) Administration by Board. The Board will administer the Plan unless and until
the Board delegates administration of the Plan to a Committee or Committees, as
provided in Section 8(d).

(b) Powers of Board. Except with respect to the Automatic Grant Program, the
Board shall have the power, subject to, and within the limitations of, the
express provisions of the Plan:

(i) To determine from time to time (A) which of the persons eligible under the
Plan will be granted Awards; (B) when and how each Award will be granted;
(C) what type or combination of types of Award will be granted; (D) the
provisions of each Award granted (which need not be identical), including the
time or times when a person will be permitted to receive cash or Common Stock
pursuant to an Award; (E) the number of shares of Common Stock with respect to
which an Award will be granted to each such person; and (F) the Fair Market
Value applicable to an Award.

(ii) To construe and interpret the Plan and Awards granted under it, and to
establish, amend and revoke rules and regulations for its administration. The
Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan or in any Award Agreement in a manner and to the
extent it deems necessary or expedient to make the Plan or Award fully
effective.

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

(iv) To accelerate the time at which an Award may first be exercised or the time
during which an Award or any part thereof will vest, notwithstanding the
provisions in the Award Agreement stating the time at which it may first be
exercised or the time during which it will vest, including in connection with a
Change in Control or Hostile Take-Over.

(v) To prohibit the exercise of any Option, SAR or other exercisable Award
during a period of up to thirty days prior to the consummation of any pending
stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other distribution (other than normal cash dividends) of
Company assets to stockholders, or any other change affecting the shares of
Common Stock or the share price of the Common Stock including any Change in
Control, for reasons of administrative convenience.

(vi) To suspend or terminate the Plan at any time. Suspension or termination of
the Plan will not impair rights and obligations under any Award granted while
the Plan is in effect except with the written consent of the affected
Participant.

(vii) To amend the Plan in any respect the Board deems necessary or advisable,
provided that stockholder approval will be required to the extent required by
Applicable Law. Except as provided above, rights under any Award granted before
amendment of the Plan will not be impaired by any amendment of the Plan unless
(1) the Company requests the consent of the affected Participant, and (2) such
Participant consents in writing.

(viii) To submit any amendment to the Plan for stockholder approval.

(ix) To approve forms of Award Agreements for use under the Plan and to amend
the terms of any one or more Awards, including, but not limited to, amendments
to provide terms more favorable to the Participant than previously provided in
the Award Agreement, subject to any specified limits in the Plan that are not
subject to Board discretion; provided, however, that except with respect to
amendments that disqualify or impair the status of an Incentive Stock Option, a
Participant’s rights under any Award will not be impaired by any such amendment
unless (A) the Company requests the consent of the affected Participant, and
(B) such Participant consents in writing. Notwithstanding the foregoing, (1) a
Participant’s rights will not be deemed to have been impaired by any such
amendment if the Board, in its sole discretion, determines that the amendment,
taken as a whole, does not materially impair the Participant’s rights,
including, but not limited, to, an amendment that imposes reasonable
restrictions on the minimum number of shares subject to an Option that may be
exercised, and (2) subject to the limitations of Applicable Law, if any, the
Board may amend the terms of any one or more Awards without the affected
Participant’s consent (A) to maintain the qualified status of the Award as an
Incentive Stock Option under Section 422 of the Code; (B) to change the terms of
an Incentive Stock Option, if such change results in impairment of the Award
solely because it impairs the qualified status of the Award as an Incentive
Stock Option under Section 422 of the Code; (C) to clarify the manner of
exemption from, or to bring the Award into compliance with or qualify it for an
exemption from, Section 409A; or (D) to comply with other Applicable Laws.

(x) Generally, to exercise such powers and to perform such acts as the Board
deems necessary or expedient to promote the best interests of the Company and
that are not in conflict with the provisions of the Plan or Awards.

(xi) To adopt such procedures and sub-plans as are necessary or appropriate to
permit participation in the Plan by Employees, Directors or Consultants who are
foreign nationals or employed outside the United States.

(c) Administration of Automatic Grant Program. The Board shall have the power,
subject to and within the limitations of, the express provisions of the
Automatic Grant Program:

 

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(i) To determine the provisions of each Award to the extent not specified in the
Automatic Grant Program.

(ii) To construe and interpret the Automatic Grant Program and the Awards
granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Automatic Grant Program or in any Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to
make the Automatic Grant Program fully effective.

(iii) To amend the terms of the Automatic Grant Program or an Award granted
thereunder, except that rights under any such Award granted before amendment of
the Automatic Grant Program shall not be impaired by any amendment of the
Automatic Grant Program unless (1) the Company requests the consent of the
affected Participant, and (2) such Participant consents in writing.

(iv) Generally, to exercise such powers and to perform such acts as the Board
deems necessary or expedient to promote the best interests of the Company and
that are not in conflict with the provisions of the Automatic Grant Program.

(d) Delegation to Committee.

(i) General. The Board may delegate some or all of the administration of the
Plan (except the Automatic Grant Program) to a Committee or Committees. If
administration of the Plan is delegated to a Committee, the Committee will have,
in connection with the administration of the Plan, the powers theretofore
possessed by the Board that have been delegated to the Committee, including the
power to delegate to a subcommittee of the Committee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to
the Board will thereafter be to the Committee or subcommittee), subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. The Committee may, at any
time, abolish the subcommittee and/or revest in the Committee any powers
delegated to the subcommittee. The Board may retain the authority to
concurrently administer the Plan with the Committee and may, at any time, revest
in the Board some or all of the powers previously delegated. As of the Effective
Date the Board has delegated administration of the Plan to the Compensation
Committee.

(ii) Rule 16b-3 Compliance. The Committee may consist solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. In addition, the Board or
the Committee, in its sole discretion, may delegate to a Committee who need not
be Non-Employee Directors the authority to grant Awards to eligible persons who
are not then subject to Section 16 of the Exchange Act.

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

(f) Cancellation and Re-Grant of Awards. Neither the Board nor any Committee
will have the authority to: (i) reduce the exercise price or strike price of any
outstanding Options or SARs under the Plan, or (ii) cancel any outstanding
Options or SARs that have an exercise price or strike price greater than the
current Fair Market Value in exchange for cash or other Awards under the Plan,
unless the stockholders of the Company have approved such an action within
twelve months prior to such an event.

(g) Delegation to an Officer. The Board or any Committee may delegate to one or
more Officers the authority to do one or both of the following (i) designate
Employees who are not Officers to be recipients of Options and SARs (and, to the
extent permitted by Applicable Law, other Awards) and, to the extent permitted
by Applicable Law, the terms thereof, and (ii) determine the number of shares of
Common Stock to be subject to such Awards granted to such Employees; provided,
however, that the resolutions evidencing such delegation will specify the total
number of shares of Common Stock that may be subject to the Awards granted by
such Officer and that such Officer may not grant an Award to himself or herself.
Any such Awards will be granted on the form of Award Agreement most recently
approved for use by the Board or the Committee, unless otherwise provided in the
resolutions approving the delegation authority. Notwithstanding anything to the
contrary herein, neither the Board nor any Committee may delegate to an Officer
who is acting solely in the capacity of an Officer (and not also as a Director)
the authority to determine the Fair Market Value.

9. Tax Withholding

(a) Withholding Authorization. As a condition to acceptance of any Award under
the Plan, a Participant authorizes withholding from payroll and any other
amounts payable to such Participant, and otherwise agree to make adequate
provision for (including), any sums required to satisfy the federal, state,
local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with the exercise, vesting or settlement of such
Award, as applicable. Accordingly, a Participant may not be able to exercise an
Award even though the Award is vested, and the Company shall have no obligation
to issue shares of Common Stock subject to an Award, unless and until such
obligations are satisfied.

(b) Satisfaction of Withholding Obligation. To the extent permitted by the terms
of an Award Agreement, the Company may, in its sole discretion, satisfy any
federal, state, local or foreign tax withholding obligation relating to an Award
by any of the following means or by a combination of such means: (i) causing the
Participant to tender a cash payment; (ii) withholding shares of Common Stock
from the shares of Common Stock issued or otherwise issuable to the Participant
in connection with the

 

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Award; (iii) withholding cash from an Award settled in cash; (iv) withholding
payment from any amounts otherwise payable to the Participant; (v) by means of a
“cashless exercise” pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board; or (vi) by such other method as may be
set forth in the Award Agreement.

(c) Withholding Indemnification. As a condition to accepting an Award under the
Plan, in the event that the amount of the Company’s withholding obligation in
connection with such Award was greater than the amount actually withheld by the
Company, each Participant agrees to indemnify and hold the Company harmless from
any failure by the Company to withhold the proper amount.

10. Miscellaneous.

(a) Minimum Vesting Requirements. No Award may vest (or, if applicable, be
exercisable) until at least twelve (12) months following the date of grant of
the Award; provided, however, that shares of Common Stock up to five percent
(5%) of the Share Reserve may be issued pursuant to Awards that do not meet such
vesting (and, if applicable, exercisability) requirements.

(b) Dividends and Dividend Equivalents.

(i) Dividends or dividend equivalents may not be paid or credited to Options or
SARs.

(ii) With respect to any Award other than an Option or SAR, dividends or
dividend equivalents may be paid or credited, as applicable, with respect to any
shares of Common Stock subject to such Award, as determined by the Board and
specified in the applicable Award Agreement; provided, however, that (i) no
dividends or dividend equivalents may be paid with respect to any such shares
before the date such shares have vested under the terms of such Award Agreement,
(ii) any dividends or dividend equivalents that are credited with respect to any
such shares will be subject to all of the terms and conditions applicable to
such shares under the terms of such Award Agreement (including, but not limited
to, any vesting conditions), and (iii) any dividends or dividend equivalents
that are credited with respect to any such shares will be forfeited to the
Company on the date, if any, such shares are forfeited to or repurchased by the
Company due to a failure to meet any vesting conditions under the terms of such
Award Agreement.

(c) Source of Shares. The stock issuable under the Plan will be shares of
authorized but unissued or reacquired Common Stock, including shares repurchased
by the Company on the open market or otherwise.

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

(e) Corporate Action Constituting Grant of Awards. Corporate action constituting
a grant by the Company of an Award to any Participant will be deemed completed
as of the date of such corporate action, unless otherwise determined by the
Board, regardless of when the instrument, certificate, or letter evidencing the
Award is communicated to, or actually received or accepted by, the Participant.
In the event that the corporate records (e.g., Board consents, resolutions or
minutes) documenting the corporate action approving the grant contain terms
(e.g., exercise price, vesting schedule or number of shares) that are
inconsistent with those in the Award Agreement or related grant documents as a
result of a clerical error in the papering of the Award Agreement or related
grant documents, the corporate records will control and the Participant will
have no legally binding right to the incorrect term in the Award Agreement or
related grant documents.

(f) Stockholder Rights. No Participant will be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares of Common Stock
subject to such Award unless and until (i) such Participant has satisfied all
requirements for exercise of the Award pursuant to its terms, if applicable, and
(ii) the issuance of the Common Stock subject to such Award is reflected in the
records of the Company.

(g) No Employment or Other Service Rights. Nothing in the Plan, any Award
Agreement or any other instrument executed thereunder or in connection with any
Award granted pursuant thereto will confer upon any Participant any right to
continue to serve the Company or an Affiliate in the capacity in effect at the
time the Award was granted or affect the right of the Company or an Affiliate to
terminate at will and without regard to any future vesting opportunity that a
Participant may have with respect to any Award (i) the employment of an Employee
with or without notice and with or without cause, (ii) the service of a
Consultant pursuant to the terms of such Consultant’s agreement with the Company
or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of
the Company or an Affiliate, and any applicable provisions of the corporate law
of the state in which the Company or the Affiliate is incorporated, as the case
may be. Further, nothing in the Plan, any Award Agreement or any other
instrument executed thereunder or in connection with any Award will constitute
any promise or commitment by the Company or an Affiliate regarding the fact or
nature of future positions, future work assignments, future compensation or any
other term or condition of employment or service or confer any right or benefit
under the Award or the Plan unless such right or benefit has specifically
accrued under the terms of the Award Agreement and/or Plan.

(h) Change in Time Commitment. In the event a Participant’s regular level of
time commitment in the performance of his or her services for the Company and
any Affiliates is reduced (for example, and without limitation, if the
Participant is an Employee of the Company and the Employee has a change in
status from a full-time Employee to a part-time Employee or takes

 

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an extended leave of absence) after the date of grant of any Award to the
Participant, the Board may determine, to the extent permitted by Applicable Law,
to (x) make a corresponding reduction in the number of shares or cash amount
subject to any portion of such Award that is scheduled to vest or become payable
after the date of such change in time commitment, and (y) in lieu of or in
combination with such a reduction, extend the vesting or payment schedule
applicable to such Award. In the event of any such reduction, the Participant
will have no right with respect to any portion of the Award that is so reduced
or extended.

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

(j) Execution of Additional Documents. As a condition to accepting an Award
under the Plan, the Participant agrees to execute any additional documents or
instruments necessary or desirable, as determined in the Plan Administrator’s
sole discretion, to carry out the purposes or intent of the Award, or facilitate
compliance with securities and/or other regulatory requirements, in each case at
the Plan Administrator’s request.

(k) Electronic Delivery and Participation. Any reference herein or in an Award
Agreement to a “written” agreement or document will include any agreement or
document delivered electronically, filed publicly at www.sec.gov (or any
successor website thereto) or posted on the Company’s intranet (or other shared
electronic medium controlled by the Company to which the Participant has
access). By accepting any Award the Participant consents to receive documents by
electronic delivery and to participate in the Plan through any on-line
electronic system established and maintained by the Plan Administrator or
another third party selected by the Plan Administrator. The form of delivery of
any Common Stock (e.g., a stock certificate or electronic entry evidencing such
shares) shall be determined by the Company.

(l) Clawback/Recovery. All Awards granted under the Plan will be subject to
recoupment in accordance with any clawback policy that the Company is required
to adopt pursuant to the listing standards of any national securities exchange
or association on which the Company’s securities are listed or as is otherwise
required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or
other Applicable Law, and any other clawback policy that the Company adopts. In
addition, the Board may impose such other clawback, recovery or recoupment
provisions in an Award Agreement as the Board determines necessary or
appropriate, including but not limited to a reacquisition right in respect of
previously acquired shares of Common Stock or other cash or property upon the
occurrence of Cause. No recovery of compensation under such a clawback policy
will be an event giving rise to a Participant’s right to voluntary terminate
employment upon a “resignation for good reason,” or for a “constructive
termination” or any similar term under any plan of or agreement with the
Company.

(m) Securities Law Compliance. A Participant will not be issued any shares in
respect of an Award unless either (i) the shares are registered under the
Securities Act; or (ii) the Company has determined that such issuance would be
exempt from the registration requirements of the Securities Act. Each Award also
must comply with other Applicable Law governing the Award, and a Participant
will not receive such shares if the Company determines that such receipt would
not be in material compliance with Applicable Law.

(n) Transfer or Assignment of Awards; Issued Shares. Except as expressly
provided in the Plan or the form of Award Agreement, Awards granted under the
Plan may not be transferred or assigned by the Participant. After the vested
shares subject to an Award have been issued, or in the case of Restricted Stock
and similar awards, after the issued shares have vested, the holder of such
shares is free to assign, hypothecate, donate, encumber or otherwise dispose of
any interest in such shares provided that any such actions are in compliance
with the provisions herein, the terms of the Trading Policy and Applicable Law.

(o) Effect on Other Employee Benefit Plans. The value of any Award granted under
the Plan, as determined upon grant, vesting or settlement, shall not be included
as compensation, earnings, salaries, or other similar terms used when
calculating any Participant’s benefits under any employee benefit plan sponsored
by the Company or any Affiliate, except as such plan otherwise expressly
provides. The Company expressly reserves its rights to amend, modify, or
terminate any of the Company’s or any Affiliate’s employee benefit plans.

(p) Deferrals. To the extent permitted by Applicable Law, the Board, in its sole
discretion, may determine that the delivery of Common Stock or the payment of
cash, upon the exercise, vesting or settlement of all or a portion of any Award
may be deferred and may also establish programs and procedures for deferral
elections to be made by Participants. Deferrals by will be made in accordance
with the requirements of Section 409A.

(q) Section 409A. Unless otherwise expressly provided for in an Award Agreement,
the Plan and Award Agreements will be interpreted to the greatest extent
possible in a manner that makes the Plan and the Awards granted hereunder exempt
from Section 409A, and, to the extent not so exempt, in compliance with the
requirements of Section 409A. If the Board determines that any Award granted
hereunder is not exempt from and is therefore subject to Section 409A, the Award
Agreement evidencing

 

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such Award will incorporate the terms and conditions necessary to avoid the
consequences specified in Section 409A(a)(1) of the Code, and to the extent an
Award Agreement is silent on terms necessary for compliance, such terms are
hereby incorporated by reference into the Award Agreement. Notwithstanding
anything to the contrary in this Plan (and unless the Award Agreement
specifically provides otherwise), if the shares of Common Stock are publicly
traded, and if a Participant holding an Award that constitutes “deferred
compensation” under Section 409A is a “specified employee” for purposes of
Section 409A, no distribution or payment of any amount that is due because of a
“separation from service” (as defined in Section 409A without regard to
alternative definitions thereunder) will be issued or paid before the date that
is six months and one day following the date of such Participant’s “separation
from service” or, if earlier, the date of the Participant’s death, unless such
distribution or payment can be made in a manner that complies with Section 409A,
and any amounts so deferred will be paid in a lump sum on the day after such six
month period elapses, with the balance paid thereafter on the original schedule.

(r) Data Privacy. By accepting an Award granted under the Plan, a Participant
thereby explicitly and unambiguously consents to the collection, use and
transfer, in electronic or other form, of such Participant’s personal data as
described herein by and among, as applicable, the Employer, and the Company and
its other Affiliates and the Plan Administrator for the exclusive purpose of
implementing, administering and managing such Participant’s participation in the
Plan. Each Participant understands that the Company and the Employer may hold
certain personal information about such Participant, including, but not limited
to, the Participant’s name, home address and telephone number, date of birth,
social insurance number or other identification number, salary, nationality, job
title, any shares of stock or directorships held in the Company, details of all
Awards or any other entitlement to ordinary shares awarded, canceled, exercised,
vested, unvested or outstanding in the Participant’s favor, for the purpose of
implementing, administering and managing the Plan (the “Data”). Each Participant
understands that Data may be transferred to any third parties assisting in the
implementation, administration and management of the Plan, that these recipients
may be located in the Participant’s country or elsewhere, and that the
recipients’ country (e.g., the United States) may have different data privacy
laws and protections than the Participant’s country. Each Participant
understands that such Participant may request a list with the names and
addresses of any potential recipients of the Data by contacting the
Participant’s local human resources representative. Each Participant authorizes
the recipients to receive, possess, use, retain and transfer the Data, in
electronic or other form, for the sole purpose of implementing, administering
and managing the Participant’s participation in the Plan, including any
requisite transfer of such Data as may be required to a broker or other third
party with whom such Participant may elect to deposit any ordinary shares
acquired pursuant to an Award. Each Participant understands that Data will be
held only as long as is necessary to implement, administer and manage such
Participant’s participation in the Plan. Each Participant understands that such
Participant may, at any time, view Data, request additional information about
the storage and processing of Data, require any necessary amendments to Data or
refuse or withdraw the consents herein, without cost, by contacting in writing
such Participant’s local human resources representative. Each Participant
understands, however, that refusing or withdrawing such Participant’s consent
may affect such Participant’s ability to participate in the Plan. For more
information on the consequences of refusal to consent or withdrawal of consent,
each Participant understands that such Participant may contact his or her local
human resources representative.

(s) Choice of Law. This Plan and any controversy arising out of or relating to
this Plan shall be governed by, and construed in accordance with, the internal
laws of the State of California, without regard to conflict of law principles
that would result in any application of any law other than the law of the State
of California.

11. Covenants of the Company.

(a) Securities Law Compliance. The Company will seek to obtain from each
regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Awards and to issue and sell shares of Common Stock
upon exercise of the Awards; provided, however, that this undertaking will not
require the Company to register under the Securities Act the Plan, any Award or
any Common Stock issued or issuable pursuant to any such Award. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority that counsel for the Company deems necessary
for the lawful issuance and sale of Common Stock under the Plan, the Company
will be relieved from any liability for failure to issue and sell Common Stock
upon exercise of such Awards unless and until such authority is obtained. A
Participant is not eligible for the grant of an Award or the subsequent issuance
of Common Stock pursuant to the Award if such grant or issuance would be in
violation of any Applicable Law.

(b) No Obligation to Notify or Minimize Taxes; No Liability for Taxes. The
Company has no duty or obligation to any Participant to advise such holder as to
the time or manner of exercising such Award. Furthermore, the Company has no
duty or obligation to warn or otherwise advise such holder of a pending
termination or expiration of an Award or a possible period in which the Award
may not be exercised. The Company has no duty or obligation to minimize the tax
consequences of an Award to the holder of such Award and will not be liable to
any holder of an Award for any adverse tax consequences to such holder in
connection with an Award. As a condition to accepting an Award under the Plan,
each Participant (i) agrees to not make any claim against the Company, or any of
its Officers, Directors, Employees or Affiliates related to tax liabilities
arising from such Award or other Company compensation and (ii) acknowledges that
such Participant was advised to consult with his or her own personal tax,
financial and other legal advisors regarding the tax consequences of the Award
and has either done so or knowingly and

 

12

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voluntarily declined to do so. Additionally, each Participant acknowledges any
Option or SAR granted under the Plan is exempt from Section 409A only if the
exercise or strike price is at least equal to the “fair market value” of the
Common Stock on the date of grant as determined by the Internal Revenue Service
and there is no other impermissible deferral of compensation associated with the
Award. Additionally, as a condition to accepting an Option or SAR granted under
the Plan, each Participant agrees not make any claim against the Company, or any
of its Officers, Directors, Employees or Affiliates in the event that the
Internal Revenue Service asserts that such exercise price or strike price is
less than the “fair market value” of the Common Stock on the date of grant as
subsequently determined by the Internal Revenue Service.

12. Additional Rules for Awards Subject to Section 409A.

(a) Application. Unless the provisions of this Section 12 of the Plan are
expressly superseded by the provisions in the form of Award Agreement, the
provisions of this Section 12 shall apply and shall supersede anything to the
contrary set forth in the Award Agreement for a Non-Exempt Award.

(b) Non-Exempt Awards Subject to Non-Exempt Severance Arrangements. To the
extent a Non-Exempt Award is subject to Section 409A due to application of a
Non-Exempt Severance Arrangement, the following provisions of Section 12(b)
apply.

(i) If the Non-Exempt Award vests in the ordinary course during the
Participant’s Continuous Service in accordance with the vesting schedule set
forth in the Award Agreement, and does not accelerate vesting under the terms of
a Non-Exempt Severance Arrangement, in no event will the shares be issued in
respect of such Non-Exempt Award any later than the later of: (i) December 31st
of the calendar year that includes the applicable vesting date, or (ii) the 60th
day that follows the applicable vesting date.

(ii) If vesting of the Non-Exempt Award accelerates under the terms of a
Non-Exempt Severance Arrangement in connection with the Participant’s Separation
from Service, and such vesting acceleration provisions were in effect as of the
date of grant of the Non-Exempt Award and, therefore, are part of the terms of
such Non-Exempt Award as of the date of grant, then the shares will be earlier
issued in settlement of such Non-Exempt Award upon the Participant’s Separation
from Service in accordance with the terms of the Non-Exempt Severance
Arrangement, but in no event later than the 60th day that follows the date of
the Participant’s Separation from Service. However, if at the time the shares
would otherwise be issued the Participant is subject to the distribution
limitations contained in Section 409A applicable to “specified employees,” as
defined in Section 409A(a)(2)(B)(i) of the Code, such shares shall not be issued
before the date that is six months following the date of such Participant’s
Separation from Service, or, if earlier, the date of the Participant’s death
that occurs within such six month period.

(iii) If vesting of a Non-Exempt Award accelerates under the terms of a
Non-Exempt Severance Arrangement in connection with a Participant’s Separation
from Service, and such vesting acceleration provisions were not in effect as of
the date of grant of the Non-Exempt Award and, therefore, are not a part of the
terms of such Non-Exempt Award on the date of grant, then such acceleration of
vesting of the Non-Exempt Award shall not accelerate the issuance date of the
shares, but the shares shall instead be issued on the same schedule as set forth
in the Grant Notice as if they had vested in the ordinary course during the
Participant’s Continuous Service, notwithstanding the vesting acceleration of
the Non-Exempt Award. Such issuance schedule is intended to satisfy the
requirements of payment on a specified date or pursuant to a fixed schedule, as
provided under Treasury Regulations Section 1.409A-3(a)(4).

(c) Treatment of Non-Exempt Awards Upon a Change in Control for Employees and
Consultants. The provisions of this Section 12(c) shall apply and shall
supersede anything to the contrary set forth in the Plan with respect to the
permitted treatment of any Non-Exempt Award in connection with a Change in
Control if the Participant was either an Employee or Consultant upon the
applicable date of grant of the Non-Exempt Award.

(i) Vested Non-Exempt Awards: The following provisions shall apply to any Vested
Non-Exempt Award in connection with a Change in Control:

(1) If the Change in Control is also a Section 409A Change of Control, then the
Acquiring Entity may not assume, continue or substitute the Vested Non-Exempt
Award. Upon the Section 409A Change of Control the settlement of the Vested
Non-Exempt Award will automatically be accelerated and the shares will be
immediately issued in respect of the Vested Non-Exempt Award. Alternatively, the
Company may instead provide that the Participant will receive a cash settlement
equal to the Fair Market Value of the shares that would otherwise be issued to
the Participant upon the Section 409A Change of Control.

(2) If the Change in Control is not also a Section 409A Change of Control, then
the Acquiring Entity must either assume, continue or substitute each Vested
Non-Exempt Award. The shares to be issued in respect of the Vested Non-Exempt
Award shall be issued to the Participant by the Acquiring Entity on the same
schedule that the shares would have been issued to the Participant if the Change
in Control had not occurred. In the Acquiring Entity’s discretion, in lieu of an
issuance of shares, the Acquiring Entity may instead substitute a cash payment
on each applicable issuance date, equal to the Fair Market Value of the shares
that would otherwise be issued to the Participant on such issuance dates, with
the determination of the Fair Market Value of the shares made on the date of the
Change in Control.

 

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(ii) Unvested Non-Exempt Awards. The following provisions shall apply to any
Unvested Non-Exempt Award unless otherwise determined by the Board pursuant to
Section 12(e).

(1) In the event of a Change in Control, the Acquiring Entity shall assume,
continue or substitute any Unvested Non-Exempt Award. Unless otherwise
determined by the Board, any Unvested Non-Exempt Award will remain subject to
the same vesting and forfeiture restrictions that were applicable to the Award
prior to the Change in Control. The shares to be issued in respect of any
Unvested Non-Exempt Award shall be issued to the Participant by the Acquiring
Entity on the same schedule that the shares would have been issued to the
Participant if the Change in Control had not occurred. In the Acquiring Entity’s
discretion, in lieu of an issuance of shares, the Acquiring Entity may instead
substitute a cash payment on each applicable issuance date, equal to the Fair
Market Value of the shares that would otherwise be issued to the Participant on
such issuance dates, with the determination of Fair Market Value of the shares
made on the date of the Change in Control.

(2) If the Acquiring Entity will not assume, substitute or continue any Unvested
Non-Exempt Award in connection with a Change in Control, then such Award shall
automatically terminate and be forfeited upon the Change in Control with no
consideration payable to any Participant in respect of such forfeited Unvested
Non-Exempt Award. Notwithstanding the foregoing, to the extent permitted and in
compliance with the requirements of Section 409A, the Board may in its
discretion determine to elect to accelerate the vesting and settlement of the
Unvested Non-Exempt Award upon the Change in Control, or instead substitute a
cash payment equal to the Fair Market Value of such shares that would otherwise
be issued to the Participant, as further provided in Section 12(e)(ii) below. In
the absence of such discretionary election by the Board, any Unvested Non-Exempt
Award shall be forfeited without payment of any consideration to the affected
Participants if the Acquiring Entity will not assume, substitute or continue the
Unvested Non-Exempt Awards in connection with the Change in Control.

(3) The foregoing treatment shall apply with respect to all Unvested Non-Exempt
Awards upon any Change in Control, and regardless of whether or not such Change
in Control is also a Section 409A Change of Control.

(d) Treatment of Non-Exempt Awards Upon a Change in Control for Non-Employee
Directors. The following provisions of this Section 12(d) shall apply and shall
supersede anything to the contrary that may be set forth in the Plan with
respect to the permitted treatment of a Non-Exempt Director Award in connection
with a Change in Control.

(i) If the Change in Control is also a Section 409A Change of Control, then the
Acquiring Entity may not assume, continue or substitute the Non-Exempt Director
Award. Upon the Section 409A Change of Control the vesting and settlement of any
Non-Exempt Director Award will automatically be accelerated and the shares will
be immediately issued to the Participant in respect of the Non-Exempt Director
Award. Alternatively, the Company may provide that the Participant will instead
receive a cash settlement equal to the Fair Market Value of the shares that
would otherwise be issued to the Participant upon the Section 409A Change of
Control pursuant to the preceding provision.

(ii) If the Change in Control is not also a Section 409A Change of Control, then
the Acquiring Entity must either assume, continue or substitute the Non-Exempt
Director Award. Unless otherwise determined by the Board, the Non-Exempt
Director Award will remain subject to the same vesting and forfeiture
restrictions that were applicable to the Award prior to the Change in Control.
The shares to be issued in respect of the Non-Exempt Director Award shall be
issued to the Participant by the Acquiring Entity on the same schedule that the
shares would have been issued to the Participant if the Change in Control had
not occurred. In the Acquiring Entity’s discretion, in lieu of an issuance of
shares, the Acquiring Entity may instead substitute a cash payment on each
applicable issuance date, equal to the Fair Market Value of the shares that
would otherwise be issued to the Participant on such issuance dates, with the
determination of Fair Market Value made on the date of the Change in Control.

(e) If the RSU Award is a Non-Exempt Award, then the provisions in this
Section 12(e) shall apply and supersede anything to the contrary that may be set
forth in the Plan or the Award Agreement with respect to the permitted treatment
of such Non-Exempt Award:

(i) Any exercise by the Board of discretion to accelerate the vesting of a
Non-Exempt Award shall not result in any acceleration of the scheduled issuance
dates for the shares in respect of the Non-Exempt Award unless earlier issuance
of the shares upon the applicable vesting dates would be in compliance with the
requirements of Section 409A.

(ii) The Company explicitly reserves the right to earlier settle any Non-Exempt
Award to the extent permitted and in compliance with the requirements of
Section 409A, including pursuant to any of the exemptions available in Treasury
Regulations Section 1.409A-3(j)(4)(ix).

(iii) To the extent the terms of any Non-Exempt Award provide that it will be
settled upon a Change in Control or Change of Control, to the extent it is
required for compliance with the requirements of Section 409A, the Change in
Control or Change of Control event triggering settlement must also constitute a
Section 409A Change of Control. To the extent the terms of a Non-Exempt Award
provides that it will be settled upon a termination of employment or termination
of Continuous

 

14

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Service, to the extent it is required for compliance with the requirements of
Section 409A, the termination event triggering settlement must also constitute a
Separation From Service. However, if at the time the shares would otherwise be
issued to a Participant in connection with a “separation from service” such
Participant is subject to the distribution limitations contained in Section 409A
applicable to “specified employees,” as defined in Section 409A(a)(2)(B)(i) of
the Code, such shares shall not be issued before the date that is six months
following the date of the Participant’s Separation From Service, or, if earlier,
the date of the Participant’s death that occurs within such six month period.

(iv) The provisions in Section 12(e) for delivery of the shares in respect of
the settlement of a RSU Award that is a Non-Exempt Award are intended to comply
with the requirements of Section 409A so that the delivery of the shares to the
Participant in respect of such Non-Exempt Award will not trigger the additional
tax imposed under Section 409A, and any ambiguities herein will be so
interpreted.

13. Severability.

If all or any part of the Plan or any Award Agreement is declared by any court
or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any portion of the Plan or such Award Agreement
not declared to be unlawful or invalid. Any Section of the Plan or any Award
Agreement (or part of such a Section) so declared to be unlawful or invalid
shall, if possible, be construed in a manner which will give effect to the terms
of such Section or part of a Section to the fullest extent possible while
remaining lawful and valid.

14. Termination of the Plan.

The Board may suspend or terminate the Plan at any time. No Incentive Stock
Options may be granted after the tenth anniversary of the earlier of: (i) the
Adoption Date, or (ii) the Effective Date. No Awards may be granted under the
Plan while the Plan is suspended or after it is terminated.

15. Definitions.

As used in the Plan, the following definitions apply to the capitalized terms
indicated below:

(a) “Acquiring Entity” means the surviving or acquiring corporation (or its
parent company) in connection with a Change in Control.

(b) “Adoption Date” means the date the Plan is first approved by the
Compensation Committee of the Board.

(c) “Affiliate” means, at the time of determination, any “parent” or
“subsidiary” of the Company as such terms are defined in Rule 405 promulgated
under the Securities Act. The Board may determine the time or times at which
“parent” or “subsidiary” status is determined within the foregoing definition.

(d) “Annual Meeting” means the annual meeting of stockholders of the Company.

(e) “Applicable Law” means shall mean any applicable securities, federal, state,
foreign, material local or municipal or other law, statute, constitution,
principle of common law, resolution, ordinance, code, edict, decree, rule,
listing rule, regulation, judicial decision, ruling or requirement issued,
enacted, adopted, promulgated, implemented or otherwise put into effect by or
under the authority of any Governmental Body (or under the authority of the
NASDAQ Stock Market or the Financial Industry Regulatory Authority).

(f) “Appreciation Award” means (i) a stock option or stock appreciation right
granted under any of the Prior Plans or (ii) an Option or SAR granted under the
Plan, in each case with respect to which the exercise or strike price is at
least 100% of the Fair Market Value of the Common Stock subject to the option or
stock appreciation right, as applicable, on the date of grant.

(g) “Automatic Grant Program” means the grant program in effect for Eligible
Directors under Section 7 of the Plan.

(h) “Award” means any right to receive Common Stock granted under the Plan,
including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted
Stock Award, a RSU Award, a SAR, a Performance Award or any Other Award.

(i) “Award Agreement” means a written agreement between the Company and a
Participant evidencing the terms and conditions of an Award. The Award Agreement
generally consists of the Grant Notice and General Terms and Conditions.

(j) “Board” means the Board of Directors of the Company. Any decision or
determination made by the Board shall be a decision or determination that is
made in the sole discretion of the Board (or its designee), and such decision or
determination shall be final and binding on all Participants.

 

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(k) “Capitalization Adjustment” means any change that is made in, or other
events that occur with respect to, the Common Stock subject to the Plan or
subject to any Award after the Effective Date without the receipt of
consideration by the Company through merger, consolidation, reorganization,
recapitalization, reincorporation, stock dividend, dividend in property other
than cash, large nonrecurring cash dividend, stock split, reverse stock split,
liquidating dividend, combination of shares, exchange of shares, change in
corporate structure or any similar equity restructuring transaction, as that
term is used in Statement of Financial Accounting Standards Board Accounting
Standards Codification Topic 718 (or any successor thereto). Notwithstanding the
foregoing, the conversion of any convertible securities of the Company will not
be treated as a Capitalization Adjustment.

(l) “Cause” has the meaning ascribed to such term in any written agreement
between the Participant and the Company defining such term and, in the absence
of such agreement, such term means, with respect to a Participant, the
occurrence of any of the following events that has a material negative impact on
the business or reputation of the Company: (i) such Participant’s attempted
commission of, or participation in, a fraud or act of dishonesty against the
Company; (ii) such Participant’s intentional, material violation of any contract
or agreement between the Participant and the Company or of any statutory duty
owed to the Company; (iii) such Participant’s unauthorized use or disclosure of
the Company’s confidential information or trade secrets; or (iv) such
Participant’s gross misconduct. The determination that a termination of the
Participant’s Continuous Service is either for Cause or without Cause will be
made by the Board with respect to Participants who are executive officers of the
Company and by the Company’s Chief Executive Officer with respect to
Participants who are not executive officers of the Company. Any determination by
the Company that the Continuous Service of a Participant was terminated with or
without Cause for the purposes of outstanding Awards held by such Participant
will have no effect upon any determination of the rights or obligations of the
Company or such Participant for any other purpose.

(m) “Change in Control” or “Change of Control” means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
following events constituting a change in ownership or control of the Company;
provided, however, to the extent necessary to avoid adverse personal income tax
consequences to the Participant in connection with an Award, such transaction
also constitutes a Section 409A Change of Control:

(i) a merger, consolidation or other reorganization approved by the Company’s
stockholders, unless securities representing more than fifty percent (50%) of
the total combined voting power of the voting securities of the successor
corporation are immediately thereafter beneficially owned, directly or
indirectly and in substantially the same proportion, by the persons who
beneficially owned the Company’s outstanding voting securities immediately prior
to such transaction,

(ii) a stockholder-approved sale, transfer or other disposition of all or
substantially all of the Company’s assets in complete liquidation or dissolution
of the Company, or

(iii) the closing of any transaction or series of related transactions pursuant
to which any person or any group of persons comprising a “group” within the
meaning of Rule 13d-5(b)(1) of the Exchange Act (other than the Company or a
person that, prior to such transaction or series of related transactions,
directly or indirectly controls, is controlled by or is under common control
with, the Company) becomes directly or indirectly the beneficial owner (within
the meaning of Rule 13d-3 of the Exchange Act) of securities possessing (or
convertible into or exercisable for securities possessing) more than fifty
percent (50%) of the total combined voting power of the Company’s securities (as
measured in terms of the power to vote with respect to the election of Board
members) outstanding immediately after the consummation of such transaction or
series of related transactions, whether such transaction involves a direct
issuance from the Company or the acquisition of outstanding securities held by
one or more of the Company’s existing stockholders.

Notwithstanding the foregoing or any other provision of this Plan, (A) the term
Change in Control shall not include a sale of assets, merger or other
transaction effected exclusively for the purpose of changing the domicile of the
Company, and (B) the definition of Change in Control (or any analogous term) in
an individual written agreement between the Company or any Affiliate and the
Participant shall supersede the foregoing definition with respect to Awards
subject to such agreement; provided, however, that (1) if no definition of
Change in Control (or any analogous term) is set forth in such an individual
written agreement, the foregoing definition shall apply; and (2) no Change in
Control (or any analogous term) will be deemed to occur with respect to Awards
subject to such an individual written agreement without a requirement that the
Change in Control (or any analogous term) actually occur.

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

(o) “Committee” means the Compensation Committee and any other committee of
Directors to whom authority has been delegated by the Board or Compensation
Committee in accordance with Section 8(d).

(p) “Common Stock” means the common stock of the Company.

(q) “Company” means Sangamo Therapeutics, Inc., a Delaware corporation.

(r) “Compensation Committee” means the Compensation Committee of the Board.

 

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(s) “Consultant” means any person, including an advisor, who is (i) engaged by
the Company or an Affiliate to render consulting or advisory services and is
compensated for such services, or (ii) serving as a member of the board of
directors of an Affiliate and is compensated for such services. However, service
solely as a Director, or payment of a fee for such service, will not cause a
Director to be considered a “Consultant” for purposes of the Plan.
Notwithstanding the foregoing, a person is treated as a Consultant under this
Plan only if a Form S-8 Registration Statement under the Securities Act is
available to register either the offer or the sale of the Company’s securities
to such person.

(t) “Continuous Service” means that the Participant’s service with the Company
or an Affiliate, whether as an Employee, Director or Consultant, is not
interrupted or terminated. A change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Director or
Consultant or a change in the Entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant’s service with the Company or an Affiliate, will not terminate a
Participant’s Continuous Service; provided, however, that if the Entity for
which a Participant is rendering services ceases to qualify as an Affiliate, as
determined by the Board, such Participant’s Continuous Service will be
considered to have terminated on the date such Entity ceases to qualify as an
Affiliate. For example, a change in status from an Employee of the Company to a
Consultant of an Affiliate or to a Director will not constitute an interruption
of Continuous Service. To the extent permitted by law, the Board or the chief
executive officer of the Company, in that party’s sole discretion, may determine
whether Continuous Service will be considered interrupted in the case of (i) any
leave of absence approved by the Board or chief executive officer, including
sick leave, military leave or any other personal leave, or (ii) transfers
between the Company, an Affiliate, or their successors. Notwithstanding the
foregoing, a leave of absence will be treated as Continuous Service for purposes
of vesting in an Award only to such extent as may be provided in the Company’s
leave of absence policy, in the written terms of any leave of absence agreement
or policy applicable to the Participant, or as otherwise required by law. In
addition, to the extent required for exemption from or compliance with
Section 409A, the determination of whether there has been a termination of
Continuous Service will be made, and such term will be construed, in a manner
that is consistent with the definition of “separation from service” as defined
under Treasury Regulation Section 1.409A-1(h) (without regard to any alternative
definition thereunder).

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

(v) “Disability” means, with respect to a Participant, such Participant is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or which has lasted or can be expected to last for a continuous period of
not less than 12 months, as provided in Section 22(e)(3) of the Code, and will
be determined by the Board on the basis of such medical evidence as the Board
deems warranted under the circumstances.

(w) “Effective Date” means the date of the Annual Meeting in 2018, provided this
Plan is approved by the Company’s stockholders at such meeting.

(x) “Eligible Director” means a Director who is not an Employee.

(y) “Employee” means any person employed by the Company or an Affiliate.
However, service solely as a Director, or payment of a fee for such services,
will not cause a Director to be considered an “Employee” for purposes of the
Plan.

(z) “Employer” means the Company or the Affiliate of the Company that employs
the Participant.

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

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

(cc)    “Fair Market Value” means, as of any date, the value of the Common Stock
(as determined on a per share or aggregate basis, as applicable) determined as
follows:

(i)    If the Common Stock is listed on any established stock exchange or traded
on any established market, the Fair Market Value will be the closing sales price
for such stock as quoted on such exchange or market (or the exchange or market
with the greatest volume of trading in the Common Stock) on the date of
determination, as reported in a source the Board deems reliable.

(ii)    If there is no closing sales price for the Common Stock on the date of
determination, then the Fair Market Value will be the closing selling price on
the last preceding date for which such quotation exists.

(iii)    In the absence of such markets for the Common Stock, or if otherwise
determined by the Board, the Fair Market Value will be determined by the Board
in good faith and in a manner that complies with Sections 409A and 422 of the
Code.

(dd)    “Full Value Award” means an Award granted under the Plan or an award
granted under the Prior Plans that is not an Appreciation Award.

 

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(ee)    “General Terms and Conditions” means the written summary of the general
terms and conditions applicable to an Award and which is provided to a
Participant along with the Grant Notice.

(ff)    “Governmental Body” means any: (a) nation, state, commonwealth,
province, territory, county, municipality, district or other jurisdiction of any
nature; (b) federal, state, local, municipal, foreign or other government;
(c) governmental or regulatory body, or quasi-governmental body of any nature
(including any governmental division, department, administrative agency or
bureau, commission, authority, instrumentality, official, ministry, fund,
foundation, center, organization, unit, body or Entity and any court or other
tribunal, and for the avoidance of doubt, any Tax authority) or other body
exercising similar powers or authority; or (d) self-regulatory organization
(including the Nasdaq Stock Market and the Financial Industry Regulatory
Authority).

(gg)    “Grant Notice” means the written notice provided to a Participant that
he or she has been granted an Award under the Plan and which includes the name
of the Participant, the type of Award, the date of grant of the Award, number of
shares of Common Stock subject to the Award (if any), the vesting schedule for
the Award (if any) and other key terms applicable to the Award.

(hh)    “Hostile Take-Over” means a change in ownership or control of the
Company effected through either of the following transactions:

(i)    a change in the composition of the Board over a period of thirty-six
(36) consecutive months or less such that a majority of the Board members
ceases, by reason of one or more contested elections for Board membership, to be
comprised of individuals who either (A) have been Board members continuously
since the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of the Board
members described in clause (A) who were still in office at the time the Board
approved such election or nomination, or

(ii)    a Hostile Tender-Offer.

(ii)    “Hostile Tender-Offer” means the acquisition, directly or indirectly, by
any person or related group of persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of
the Exchange Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company’s outstanding securities pursuant to
a tender or exchange offer made directly to the Company’s stockholders which the
Board does not recommend such stockholders to accept.

(jj)    “Incentive Stock Option” means an option granted pursuant to Section 4
of the Plan that is intended to be, and qualifies as, an “incentive stock
option” within the meaning of Section 422 of the Code.

(kk)    “Non-Employee Director” means a Director who either (i) is not a current
employee or officer of the Company or an Affiliate, does not receive
compensation, either directly or indirectly, from the Company or an Affiliate
for services rendered as a consultant or in any capacity other than as a
Director (except for an amount as to which disclosure would not be required
under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act
(“Regulation S-K”)), does not possess an interest in any other transaction for
which disclosure would be required under Item 404(a) of Regulation S-K, and is
not engaged in a business relationship for which disclosure would be required
pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a
“non-employee director” for purposes of Rule 16b-3.

(ll)    “Non-Exempt Award” means any Award that is subject to, and not exempt
from, Section 409A, including as the result of (i) a deferral of the issuance of
the shares subject to the Award which is elected by the Participant or imposed
by the Company, or (ii) the terms of any Non-Exempt Severance Agreement.

(mm)    “Non-Exempt Director Award” means a Non-Exempt Award granted to a
Participant who was a Director but not an Employee on the applicable grant date.

(nn)    “Non-Exempt Severance Arrangement” means a severance arrangement or
other agreement between the Participant and the Company that provides for
acceleration of vesting of an Award and issuance of the shares in respect of
such Award upon the Participant’s termination of employment or separation from
service (as such term is defined in Section 409A(a)(2)(A)(i) of the Code (and
without regard to any alternative definition thereunder) (“Separation from
Service”) and such severance benefit does not satisfy the requirements for an
exemption from application of Section 409A provided under Treasury Regulations
Section 1.409A-1(b)(4), 1.409A-1(b)(9) or otherwise.

(oo)    “Nonstatutory Stock Option” means any option granted pursuant to
Section 4 of the Plan that does not qualify as an Incentive Stock Option.

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

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

 

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(rr)    “Option Agreement” means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an Option grant and which
includes the Option Grant Notice and the Option Terms and Conditions. Each
Option Agreement will be subject to the terms and conditions of the Plan.

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

(tt)    “Other Award” means an award based in whole or in part by reference to
the Common Stock which is granted pursuant to the terms and conditions of
Section 5(c).

(uu)    “Other Award Agreement” means a written agreement between the Company
and a holder of an Other Award evidencing the terms and conditions of an Other
Award grant. Each Other Award Agreement will be subject to the terms and
conditions of the Plan.

(vv)    “Own,” “Owned,” “Owner,” “Ownership” means that a person or Entity will
be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired
“Ownership” of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.

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

(xx)    “Performance Award” means an Award that may vest or may be exercised
contingent upon the attainment during a Performance Period of certain
Performance Goals and which is granted under the terms and conditions of
Section 5(b).

(yy)    “Performance Criteria” means the one or more criteria that the Board
will select for purposes of establishing the Performance Goals for a Performance
Period. The Performance Criteria that will be used to establish such Performance
Goals may be based on any one of, or combination of, the following as determined
by the Board: (i) earnings (including earnings per share and net earnings); (ii)
earnings before interest, taxes and depreciation; (iii) earnings before
interest, taxes, depreciation and amortization; (iv) earnings before interest,
taxes, depreciation, amortization and legal settlements; (v) earnings before
interest, taxes, depreciation, amortization, legal settlements and other income
(expense); (vi) earnings before interest, taxes, depreciation, amortization,
legal settlements, other income (expense) and stock-based compensation;
(vii) earnings before interest, taxes, depreciation, amortization, legal
settlements, other income (expense), stock-based compensation and changes in
deferred revenue; (viii) total stockholder return; (ix) return on equity or
average stockholder’s equity; (x) return on assets, investment, or capital
employed; (xi) stock price; (xii) profit (including gross profit) and/or margin
(including gross margin); (xiii) income (before or after taxes); (xiv) operating
income; (xv) operating income after taxes; (xvi) pre-tax profit;
(xvii) operating cash flow; (xviii) sales or revenue targets; (xix) increases in
revenue or product revenue; (xx) expenses and cost reduction goals;
(xxi) improvement in or attainment of working capital levels; (xxii) economic
value added (or an equivalent metric); (xxiii) market share; (xxiv) cash flow;
(xxv) cash flow per share; (xxvi) share price performance; (xxvii) debt
reduction; (xxviii) implementation or completion of projects or processes;
(xxix) employee retention; (xxx) stockholders’ equity; (xxxi) capital
expenditures; (xxxii) debt levels; (xxxiii) operating profit or net operating
profit; (xxxiv) workforce diversity; (xxxv) growth of net income or operating
income; (xxxvi) billings; (xxxvii) bookings; and (xxxviii) other measures of
performance selected by the Board.

(zz)    “Performance Goals” means, for a Performance Period, the one or more
goals established by the Board for the Performance Period based upon the
Performance Criteria. Performance Goals may be based on a Company-wide basis,
with respect to one or more business units, divisions, Affiliates, or business
segments, and in either absolute terms or relative to the performance of one or
more comparable companies or the performance of one or more relevant indices.
Unless specified otherwise by the Board (i) in the Award Agreement at the time
the Award is granted or (ii) in such other document setting forth the
Performance Goals at the time the Performance Goals are established, the Board
will appropriately make adjustments in the method of calculating the attainment
of Performance Goals for a Performance Period as follows: (1) to exclude
restructuring and/or other nonrecurring charges; (2) to exclude exchange rate
effects; (3) to exclude the effects of changes to generally accepted accounting
principles; (4) to exclude the effects of any statutory adjustments to corporate
tax rates; (5) to exclude the effects of items that are “unusual” in nature or
occur “infrequently” as determined under generally accepted accounting
principles; (6) to exclude the dilutive effects of acquisitions or joint
ventures; (7) to assume that any business divested by the Company achieved
performance objectives at targeted levels during the balance of a Performance
Period following such divestiture; (8) to exclude the effect of any change in
the outstanding shares of common stock of the Company by reason of any stock
dividend or split, stock repurchase, reorganization, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other similar
corporate change, or any distributions to common stockholders other than regular
cash dividends; (9) to exclude the effects of stock based compensation and the
award of bonuses under the Company’s bonus plans; (10) to exclude costs incurred
in connection with potential acquisitions or divestitures that are required to
expensed under generally accepted accounting principles; and (11) to exclude the
goodwill and intangible asset impairment charges that are required to be
recorded under generally accepted accounting principles. In addition, the Board
retains the discretion to reduce or eliminate the compensation or economic
benefit due upon attainment of Performance Goals and to define the manner of
calculating the Performance Criteria it selects to use for such Performance
Period. Partial achievement of the specified criteria may result in the payment
or vesting corresponding to the degree of achievement as specified in the Award
Agreement.

 

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(aaa)    “Performance Period” means the period of time selected by the Board
over which the attainment of one or more Performance Goals will be measured for
the purpose of determining a Participant’s right to vesting or exercise of an
Award. Performance Periods may be of varying and overlapping duration, at the
sole discretion of the Board.

(bbb)    “Plan” means this Sangamo Therapeutics, Inc. 2018 Equity Incentive
Plan.

(ccc)    “Plan Administrator” means the person, persons, and/or third-party
administrator designated by the Company to administer the day to day operations
of the Plan and the Company’s other equity incentive programs.

(ddd)    “Post-Termination Exercise Period” means the period following
termination of a Participant’s Continuous Service within which an Option or SAR
is exercisable, as specified in Section 4(g).

(eee)    “Predecessor Plan” means the Company’s Amended and Restated 2013 Stock
Incentive Plan.

(fff)    “Prior Plans” means the Predecessor Plan and the Company’s 2004 Stock
Incentive Plan (together).

(ggg)    “Prior Plans’ Returning Shares” means shares of Common Stock subject to
outstanding stock awards granted under the Prior Plans and that following the
Effective Date: (A) are not issued because such stock award or any portion
thereof expires or otherwise terminates without all of the shares covered by
such stock award having been issued; (B) are not issued because such stock award
or any portion thereof is settled in cash; or (C) are forfeited back to or
repurchased by the Company because of the failure to meet a contingency or
condition required for the vesting of such shares.

(hhh)    “Predecessor Plan’s Available Reserve” means the number of shares
available for the grant of new awards under the Predecessor Plan as of
immediately prior to the Effective Date.

(iii)    “Prospectus” means the document containing the Plan information
specified in Section 10(a) of the Securities Act.

(jjj)    “Restricted Stock Award” means an award of shares of Common Stock which
is granted pursuant to the terms and conditions of Section 5(a).

(kkk)    “Restricted Stock Award Agreement” means a written agreement between
the Company and a holder of a Restricted Stock Award evidencing the terms and
conditions of a Restricted Stock Award grant. Each Restricted Stock Award
Agreement will be subject to the terms and conditions of the Plan.

(lll)    “RSU Award” means an Award of restricted stock units representing the
right to receive an issuance of shares of Common Stock which is granted pursuant
to the terms and conditions of Section 5(a).

(mmm)    “RSU Award Agreement” means a written agreement between the Company and
a holder of a RSU Award evidencing the terms and conditions of a RSU Award
grant. Each RSU Award Agreement will be subject to the terms and conditions of
the Plan.

(nnn)    “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any
successor to Rule 16b-3, as in effect from time to time.

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

(ppp)    “Section 409A” means Section 409A of the Code and the regulations and
other guidance thereunder.

(qqq)    “Section 409A Change of Control” means a change in the ownership or
effective control of the Company, or in the ownership of a substantial portion
of the Company’s assets, as provided in Section 409A(a)(2)(A)(v) of the Code and
Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative
definition thereunder).

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

(sss)    “Share Reserve” means the number of shares available for issuance under
the Plan as set forth in Section 2(a), subject to adjustment pursuant to
Section 6(a) in connection with Capitalization Adjustments.

(ttt)    “SAR” or “Stock Appreciation Right” means a right to receive the
appreciation on Common Stock that is granted pursuant to the terms and
conditions of Section 4.

(uuu)    “SAR Agreement” means a written agreement between the Company and a
holder of a SAR evidencing the terms and conditions of a SAR grant. Each SAR
Agreement will be subject to the terms and conditions of the Plan.

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

 

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(www)    “Trading Policy” means the Company’s policy permitting certain
individuals to sell Company shares only during certain “window” periods and/or
otherwise restricts the ability of certain individuals to transfer or encumber
Company shares, as in effect from time to time.

(xxx)    “Unvested Non-Exempt Award” means the portion of any Non-Exempt Award
that had not vested in accordance with its terms upon or prior to the date of
any Change in Control.

(yyy)    “Vested Non-Exempt Award” means the portion of any Non-Exempt Award
that had vested in accordance with its terms upon or prior to the date of a
Change in Control.

 

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