EXHIBIT 10.25

 

Arcus Biosciences, Inc.

2020 Inducement Plan

Adopted by the Board of Directors:  January 22, 2020

 

1.General.

(a)Eligible Award Recipients.  The only persons eligible to receive grants of
Awards under this Plan are individuals who satisfy the standards for inducement
grants under Rule 303A.08 of the NYSE Listed Company Manual Rules. A person who
previously served as an Employee or Director will not be eligible to receive
Awards under the Plan, other than following a bona fide period of
non-employment. Persons eligible to receive grants of Awards under this Plan are
referred to in this Plan as “Eligible Employees.” These Awards must be approved
by either a majority of the Company’s “Independent Directors” (as determined
under NYSE Listed Company Manual Rule 303A.02) or the Company’s compensation
committee, provided such committee comprises solely Independent Directors (the
“Independent Compensation Committee”) in order to comply with the exemption from
the stockholder approval requirement for “inducement grants” provided under Rule
303A.08 of the NYSE Listed Company Manual Rules (together with any analogous
rules or guidance effective after the date hereof, the “Inducement Award
Rules”).

(b)

Available Awards.  The Plan provides for the grant of the following types of
Awards: (i) Options, (ii) Stock Appreciation Rights, (iii) Restricted Share
Awards and (iv) Restricted Stock Unit Awards.  All Options shall be Nonstatutory
Stock Options.

(c)

Purpose.  This Plan, through the granting of Awards, is intended to provide (i)
an inducement material for certain individuals to enter into employment with the
Company within the meaning of Rule 303A.08 of the NYSE Listed Company Manual
Rules, (ii) incentives for such persons to exert maximum efforts for the success
of the Company and any Affiliate and (iii) a means by which Eligible Employees
may be given an opportunity to benefit from increases in value of the Common
Stock through the granting of Awards.

2.Administration.

(a)

Administration by Board.  The Board will administer the Plan; provided, however,
that Awards may only be granted by either (i) a majority of the Company’s
Independent Directors or (ii) the Independent Compensation Committee. Subject to
those constraints and the other constraints of the Inducement Award Rules, the
Board may delegate some of its powers of administration of the Plan to a
Committee, as provided in Section 2(c).

(b)

Powers of Board.  The Board will have the power, subject to, and within the
limitations of, the express provisions of the Plan and the Inducement Award
Rules:

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(i)To determine: (A) who will be granted Awards; (B) when and how each Award
will be granted; (C) what type of Award will be granted; (D) the provisions of
each Award (which need not be identical), including when a person will be
permitted to exercise or otherwise receive cash or Common Stock under the Award;
(E) the number of shares of Common Stock subject to, or the cash value of, an
Award; and (F) the Fair Market Value applicable to an Award; provided, however,
that Awards may only be granted by either (i) a majority of the Company’s
Independent Directors or (ii) the Independent Compensation Committee.

(ii)To construe and interpret the Plan and Awards granted under it, and to
establish, amend and revoke rules and regulations for administration of the Plan
and Awards.  The Board, in the exercise of these powers, may correct any defect,
omission or inconsistency in the Plan or in any Award Agreement, in a manner and
to the extent it will deem 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, in whole or in part, the time at which an Award may be
exercised or vest (or at which cash or shares of Common Stock may be issued).

(v)To suspend or terminate the Plan at any time.  Except as otherwise provided
in the Plan or an Award Agreement, suspension or termination of the Plan will
not materially impair a Participant’s rights under his or her then-outstanding
Award without his or her written consent.

(vi)To amend the Plan in any respect the Board deems necessary or advisable,
including, without limitation, by adopting amendments relating to nonqualified
deferred compensation under Section 409A of the Code and/or to bring the Plan or
Awards granted under the Plan into compliance therewith, subject to the
limitations, if any, of applicable law.  Except as provided in Section 9(a)
relating to Capitalization Adjustments, if required by applicable law or listing
requirements, the Company shall seek stockholder approval for any amendment of
the Plan.  Except as provided above, rights under any Award granted before
amendment of the Plan shall 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.

(vii)To submit any amendment to the Plan for stockholder approval, including,
but not limited to, amendments to the Plan intended to satisfy the requirements
of Rule 16b-3 of Exchange Act or any successor rule.

(viii)To approve forms of Award Agreements for use under the Plan and to amend
the terms of any one or more outstanding Awards.  Except as otherwise provided
in the Plan or an Award Agreement, no amendment of an outstanding Award will
materially impair that Participant’s rights under his or her outstanding Award
without his or her written consent.  To be clear, unless prohibited by
applicable law, the Board may amend the terms of an Award without the affected
Participant’s consent if necessary (A) to clarify the manner of exemption from,
or to bring the Award into compliance with, Section 409A of the Code, or (C) to
comply with other applicable laws or listing requirements.

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(ix)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.

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

(c)

Delegation to Committee.  The Board may delegate some or all of the
administration of the Plan 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).  Any delegation of
administrative powers will be reflected in resolutions, not inconsistent with
the provisions of the Plan, adopted from time to time by the Board or Committee
(as applicable).  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.

(d)

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

(e)

Repricing; Cancellation and Re-Grant of Awards.  Neither the Board nor any
Committee will have the authority to reduce the exercise, purchase or strike
price of any outstanding Option or SAR, unless the stockholders of the Company
have approved such an action within twelve (12) months prior to such an event.

3.Shares Subject to the Plan.

(a)

Share Reserve.  Subject to Section 9(a) relating to Capitalization Adjustments,
the aggregate number of shares of Common Stock that may be issued pursuant to
Awards from and after the Effective Date shall not exceed 3,000,000
shares.  Shares may be issued under the terms of this Plan in connection with a
merger or acquisition as permitted by Rule 303A.08 of the NYSE Listed Company
Manual Rules or other applicable rule, and such issuance will not reduce the
number of shares available for issuance under the Plan.    

(b)

Reversion of Shares to the Share Reserve. If an Award or any portion thereof (i)
expires or otherwise terminates without all of the shares covered by such Award
having been issued or (ii) is settled in cash (i.e., the Participant receives
cash rather than stock), such expiration, termination or settlement will not
reduce (or otherwise offset) the number of shares of Common Stock that may be
available for issuance under the Plan.  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 to vest such shares
in the Participant, then the shares that are forfeited or repurchased will
revert to and again become available for issuance under the Plan.  Any shares
reacquired or retained by the Company in satisfaction of tax

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withholding obligations on an Award or as consideration for the exercise or
purchase price of an Award will again become available for issuance under the
Plan.

(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.

4.Eligibility.

(a)

Eligibility for Awards.  Awards may only be granted to persons who are Eligible
Employees described in Section 1(a) of the Plan, where the Award is an
inducement material to the individual’s entering into employment with the
Company or an Affiliate within the meaning of Rule 303A.08 of the NYSE Listed
Company Manual Rules, provided however, that Awards may not be granted to
Eligible Employees who are providing Continuous Service only to any “parent” of
the Company, as such term is defined in Rule 405 of the Securities Act, unless
(i) the stock underlying such Awards is treated as “service recipient stock”
under Section 409A of the Code (for example, because the Awards are granted
pursuant to a corporate transaction such as a spin off transaction), or (ii) the
Company, in consultation with its legal counsel, has determined that such Awards
are otherwise exempt from or comply with the distribution requirements of
Section 409A of the Code.

(b)

Approval Requirements. All Awards must be granted either by a majority of the
Company’s independent directors or the Independent Compensation Committee.

5.Provisions relating to Options and SARs.

Each Option or SAR will be in such form and will contain such terms and
conditions as the Board deems appropriate. All Options will be Nonstatutory
Stock Options. The provisions of separate Options or SARs need not be identical;
provided, however, that each Award Agreement (whether an Option Agreement or a
Stock Appreciation Right Agreement) will conform to (through incorporation of
provisions hereof by reference in the applicable Award Agreement or otherwise)
the substance of each of the following provisions:

(a)

Term.  No Option or SAR will be exercisable after the expiration of 10 years
from the date of its grant or such shorter period specified in the Award
Agreement.

(b)

Exercise Price.  The exercise or strike price of each Option or SAR will not be
less than 100% of the Fair Market Value of the Common Stock subject to the
Option or SAR on the date the Option or SAR is granted. Notwithstanding the
foregoing, an Option or SAR may be granted with an exercise price lower than
100% of the Fair Market Value of the Common Stock subject to the Option or SAR
if such Option or SAR is granted pursuant to an assumption of or substitution
for another option or stock appreciation right pursuant to a Corporate
Transaction and in a manner consistent with the provisions of Section 409A of
the Code.

(c)

Purchase Price for Options.  The purchase price of Common Stock acquired
pursuant to the exercise of an Option may be paid, to the extent permitted by
applicable law and as determined by the Board in its sole discretion, by any
combination of the methods of payment set forth below.  The Board will have the
authority to grant Options that do not permit all of the

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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 use a
particular method of payment.  The permitted methods of payment are as follows:

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

(ii)pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board that, prior to the issuance of the 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 aggregate 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;

(iv)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 that does not exceed the aggregate
exercise price; provided, however, that the Company will accept a cash or other
payment from the Participant to the extent of any remaining balance of the
aggregate exercise price not satisfied by such reduction in the number of whole
shares to be issued.  Shares of Common Stock will no longer be subject to an
Option and will not be exercisable thereafter to the extent that (A) shares
issuable upon exercise are reduced to pay the exercise price pursuant to the
“net exercise,” (B) shares are delivered to the Participant as a result of such
exercise, and (C) shares are withheld to satisfy tax withholding
obligations;  or

(v)in any other form of legal consideration that may be acceptable to the Board
and specified in the applicable Award Agreement.

(d)

Exercise and Payment of a SAR.  To exercise any outstanding SAR, the Participant
must provide written notice of exercise to the Company in compliance with the
provisions of the Award Agreement evidencing such SAR.  The appreciation
distribution payable on the exercise of a SAR will be not greater than an amount
equal to the excess of (A) the aggregate Fair Market Value (on the date of the
exercise of the SAR) of a number of shares of Common Stock equal to the number
of Common Stock equivalents in which the Participant is vested under such SAR,
and with respect to which the Participant is exercising the SAR on such date,
over (B) the aggregate strike price of the number of Common Stock equivalents
with respect to which the Participant is exercising the SAR on such date.  The
appreciation distribution may be paid in Common Stock, in cash, in any
combination of the two or in any other form of consideration, as determined by
the Board and contained in the Award Agreement evidencing such SAR. If, on the
date when a SAR expires, the exercise price is less than the Fair Market Value
on such date but any portion of such SAR has not been exercised or surrendered,
then such SAR shall automatically be deemed to be exercised as of such date with
respect to such portion. The Award Agreement may also provide for an automatic
exercise of the SAR on an earlier date.

(e)

Transferability of Options and SARs.  The Board may, in its sole discretion,
impose such limitations on the transferability of Options and SARs as the Board
will determine.  

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In the absence of such a determination by the Board to the contrary, the
following restrictions on the transferability of Options and SARs will apply:

(i)Restrictions on Transfer.  An Option or SAR will not be transferable except
by will or by the laws of descent and distribution (or pursuant to subsections
(ii) and (iii) below), and will be exercisable during the lifetime of the
Participant only by the Participant.  The Board may permit transfer of the
Option or SAR in a manner that is not prohibited by applicable tax and
securities laws. Except as explicitly provided herein, an Option or SAR may not
be transferred for consideration.

(ii)Domestic Relations Orders.  An Option or SAR may be transferred pursuant to
the terms of a domestic relations order or official marital settlement agreement
or other divorce or separation instrument.

(iii)Beneficiary Designation.  A Participant may, by delivering written notice
to the Company, in a form approved by the Company (or the designated broker),
designate a third party who, on the death of the Participant, will thereafter be
entitled to exercise the Option or SAR and receive the Common Stock or other
consideration resulting from such exercise.  In the absence of such a
designation, the executor or administrator of the Participant’s estate will be
entitled to exercise the Option or SAR and receive the Common Stock or other
consideration resulting from such exercise. However, the Company may prohibit
designation of a beneficiary at any time, including due to any conclusion by the
Company that such designation would be inconsistent with the provisions of
applicable laws.

(f)

Vesting Generally.  The total number of shares of Common Stock subject to an
Option or SAR may vest and become exercisable in periodic installments that may
or may not be equal.  The Option or SAR may be subject to such other terms and
conditions on the time or times when it may or may not be exercised (which may
be based on the satisfaction of Performance Goals or other criteria) as the
Board may deem appropriate.  The vesting provisions of individual Options and
SARs may vary.  The provisions of this Section are subject to any Option or SAR
provisions governing the minimum number of shares of Common Stock as to which an
Option or SAR may be exercised.

(g)

Termination of Continuous Service.  Except as otherwise provided in the
applicable Award Agreement or other agreement between the Participant and the
Company, if a Participant’s Continuous Service terminates (other than for Cause
and other than upon the Participant’s death or Disability), the Participant may
exercise his or her Option or SAR (to the extent that the Participant was
entitled to exercise such Award as of the date of termination of Continuous
Service) within the period of time ending on the earlier of (i) the close of
business at Company headquarters on the date that is three months following the
termination of the Participant’s Continuous Service and (ii) the expiration of
the term of the Option or SAR as set forth in the Award Agreement.  If, after
termination of Continuous Service, the Participant does not exercise his or her
Option or SAR within the applicable time frame, the Option or SAR will
terminate.

(h)

Extension of Termination Date.  If the exercise of an Option or SAR following
the termination of the Participant’s Continuous Service (other than for Cause
and other than upon

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the Participant’s death or Disability) would be prohibited at any time solely
because the issuance of Common Stock would violate the registration requirements
under the Securities Act, then the Option or SAR will terminate on the earlier
of (i) the expiration of a total period of three months (that need not be
consecutive) after the termination of the Participant’s Continuous Service
during which the exercise of the Option or SAR would not be in violation of such
registration requirements, and (ii) the expiration of the term of the Option or
SAR as set forth in the applicable Award Agreement.  In addition, unless
otherwise provided in a Participant’s Award Agreement, if the sale of any Common
Stock received on exercise of an Option or SAR following the termination of the
Participant’s Continuous Service (other than for Cause) would violate the
Company’s insider trading policy, then the Option or SAR will terminate on the
earlier of (i) the expiration of a period of months (that need not be
consecutive) equal to the applicable post-termination exercise period after the
termination of the Participant’s Continuous Service during which the sale of the
Common Stock received upon exercise of the Option or SAR would not be in
violation of the Company’s insider trading policy, or (ii) the expiration of the
term of the Option or SAR as set forth in the applicable Award Agreement.

(i)

Disability of Participant.  Except as otherwise provided in the applicable Award
Agreement or other agreement between the Participant and the Company, if a
Participant’s Continuous Service terminates as a result of the Participant’s
Disability, the Participant may exercise his or her Option  or SAR (to the
extent that the Participant was entitled to exercise such Option or SAR as of
the date of termination of Continuous Service), but only within such period of
time ending on the earlier of (i) the close of business at Company headquarters
on the date six months following such termination of Continuous Service and (ii)
the expiration of the term of the Option or SAR as set forth in the Award
Agreement.  If, after termination of Continuous Service, the Participant does
not exercise his or her Option or SAR within the applicable time frame, the
Option or SAR (as applicable) will terminate.

(j)

Death of Participant.  Except as otherwise provided in the applicable Award
Agreement or other agreement between the Participant and the Company, if a
Participant’s Continuous Service terminates as a result of the Participant’s
death, then the Option or SAR may be exercised (to the extent the Participant
was entitled to exercise such Option or SAR as of the date of death) by the
Participant’s estate, by a person who acquired the right to exercise the Option
or SAR by bequest or inheritance or by a person designated to exercise the
Option or SAR upon the Participant’s death, but only within the period ending on
the earlier of (i) the close of business at Company headquarters on the date 12
months following the date of death and (ii) the expiration of the term of such
Option or SAR as set forth in the Award Agreement.  If, after the Participant’s
death, the Option or SAR is not exercised within the applicable time frame, the
Option or SAR will terminate.

(k)

Termination for Cause.  Except as explicitly provided otherwise in a
Participant’s Award Agreement, if a Participant’s Continuous Service is
terminated for Cause, the Option or SAR will terminate on your termination date.

(l)

Non-Exempt Employees.  If an Option or SAR is granted to an Employee who is a
non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as
amended, the Option or SAR will not be first exercisable for any shares of
Common Stock until at least six (6) months following the date of grant of the
Option or SAR (although the Award may vest prior to

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such date). Consistent with the provisions of the Worker Economic Opportunity
Act, (i) if such non-exempt Employee dies or suffers a Disability, (ii) upon a
Corporate Transaction in which such Option or SAR is not assumed, continued, or
substituted, or (iii) upon the Participant’s retirement (as such term may be
defined in the Participant’s Award Agreement in another agreement between the
Participant and the Company, or, if no such definition, in accordance with the
Company’s then current employment policies and guidelines), the vested portion
of any Options or SARs may be exercised earlier than six months following the
date of grant.  The foregoing provision 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.
To the extent permitted and/or required for compliance with the Worker Economic
Opportunity Act to ensure that any income derived by a non-exempt employee in
connection with the exercise, vesting or issuance of any shares under any other
Award will be exempt from the employee’s regular rate of pay, the provisions of
this Section will apply to all Awards and are hereby incorporated by reference
into such Award Agreements.

6.Provisions of Awards Other than Options and SARs.

(a)

Restricted Share Awards.  Each Restricted Share Award Agreement will be in such
form and will contain such terms and conditions as the Board deems
appropriate.  To the extent consistent with the Company’s articles of
association, at the Board’s election, shares of Common Stock underlying a
Restricted Share Award may be (i) held in book entry form subject to the
Company’s instructions until any restrictions relating to the Restricted Share
Award lapse, or (ii) evidenced by a certificate, which certificate will be held
in such form and manner as determined by the Board.  The terms and conditions of
Restricted Share Award Agreements may change from time to time, and the terms
and conditions of separate Restricted Share Award Agreements need not be
identical. Each Restricted Share Award Agreement will conform to (through
incorporation of the provisions hereof by reference in the agreement or
otherwise) the substance of each of the following provisions:

(i)Consideration.  A Restricted Share Award may be awarded in consideration for
(A) cash, check, bank draft or money order payable to the Company or (B) any
other form of legal consideration (including future services) that may be
acceptable to the Board, in its sole discretion, and permissible under
applicable law.

(ii)Vesting.  Shares of Common Stock awarded under the Restricted Share Award
Agreement may be subject to forfeiture to the Company in accordance with a
vesting schedule to be determined by the Board.

(iii)Termination of Participant’s Continuous Service.  If a Participant’s
Continuous Service terminates, 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 as of the date of termination of Continuous Service under the
terms of the Restricted Share Award Agreement.

(iv)Transferability.  Rights to acquire shares of Common Stock under the
Restricted Share Award Agreement will be transferable by the Participant only
upon such terms and conditions as are set forth in the Restricted Share Award
Agreement, as the Board will determine in its sole discretion, so long as shares
of Common Stock awarded under the

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Restricted Share Award Agreement remains subject to the terms of the Restricted
Share Award Agreement. Transfers will be subject to any approvals required by
applicable law.

(b)

Restricted Stock Unit Awards.  Each Restricted Stock Unit Award Agreement will
be in such form and will contain such terms and conditions as the Board deems
appropriate.  The terms and conditions of Restricted Stock Unit Award Agreements
may change from time to time, and the terms and conditions of separate
Restricted Stock Unit Award Agreements need not be identical.  Each Restricted
Stock Unit Award Agreement will conform to (through incorporation of the
provisions hereof by reference in the Agreement or otherwise) the substance of
each of the following provisions:

(i)Consideration.  At the time of grant of a Restricted Stock Unit Award, the
Board will determine the consideration, if any, to be paid by the Participant
upon delivery of each share of Common Stock subject to the Restricted Stock Unit
Award.  The consideration to be paid (if any) by the Participant for each share
of Common Stock subject to a Restricted Stock Unit Award may be paid in any form
of legal consideration that may be acceptable to the Board, in its sole
discretion, and permissible under applicable law.

(ii)Vesting.  At the time of the grant of a Restricted Stock Unit Award, the
Board may impose such restrictions on or conditions to the vesting of the
Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.

(iii)Payment.  A Restricted Stock Unit Award may be settled by the delivery of
shares of Common Stock, their cash equivalent, any combination thereof or in any
other form of consideration, as determined by the Board and contained in the
Restricted Stock Unit Award Agreement.

(iv)Additional Restrictions.  At the time of the grant of a Restricted Stock
Unit Award, the Board, as it deems appropriate, may impose such restrictions or
conditions that delay the delivery of the shares of Common Stock (or their cash
equivalent) subject to a Restricted Stock Unit Award to a time after the vesting
of such Restricted Stock Unit Award.

(v)Dividend Equivalents.  Dividend equivalents may be credited in respect of
shares of Common Stock covered by a Restricted Stock Unit Award, as determined
by the Board and contained in the Restricted Stock Unit Award Agreement.  At the
sole discretion of the Board, such dividend equivalents may be converted into
additional shares of Common Stock covered by the Restricted Stock Unit Award in
such manner as determined by the Board.  Any additional shares covered by the
Restricted Stock Unit award credited by reason of such dividend equivalents will
be subject to all of the same terms and conditions of the underlying Restricted
Stock Unit Award Agreement to which they relate.  To the extent permitted under
applicable stock exchange listing standards, any dividend equivalents paid or
credited under the Plan with respect to Restricted Stock Unit Awards shall not
be applied against the number of shares of Common Stock that may be issued under
the Plan.

(vi)Termination of Participant’s Continuous Service.  Except as otherwise
provided in the applicable Restricted Stock Unit Award Agreement, such portion
of the

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Restricted Stock Unit Award that has not vested will be forfeited upon the
Participant’s termination of Continuous Service.

7.Covenants of the Company.

(a)

Availability of Shares.  The Company will keep available at all times the number
of shares of Common Stock reasonably required to satisfy then-outstanding
Awards.

(b)

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 and at a reasonable cost, 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 will not be eligible for the grant of an
Award or the subsequent issuance of cash or Common Stock pursuant to the Award
if such grant or issuance would be in violation of any applicable securities
law.

(c)

No Obligation to Notify or Minimize Taxes.  The Company will have no duty or
obligation to any Participant to advise such holder as to the time or manner of
exercising such Award.  Furthermore, the Company will have 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.

8.Miscellaneous.

(a)

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.

(b)

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 constituting the grant contain terms
(e.g., exercise price, vesting schedule or number of shares) that are
inconsistent with those in the Award Agreement as a result of a clerical error
in the papering of the Award Agreement, the corporate records will control and
the Participant will have no legally binding right to the incorrect term in the
Award Agreement.  

(c)

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 an Award unless and until (i) such Participant has satisfied all
requirements for exercise of, or the

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issuance of shares under, the Award pursuant to its terms, and (ii) the issuance
of the Common Stock subject to such Award has been entered into the books and
records of the Company.

(d)

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 will affect the right of the Company or an Affiliate to
terminate (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.

(e)

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) after the date of grant of any Award
to the Participant, the Board has the right in its sole discretion 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.

(f)

Investment Assurances.  The Company may require a Participant, as a condition of
exercising or acquiring Common Stock under any Award, (i) to give written
assurances satisfactory to the Company as to the Participant’s knowledge and
experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and
experienced in financial and business matters and that he or she is capable of
evaluating, alone or together with the purchaser representative, the merits and
risks of exercising the Award; and (ii) to give written assurances satisfactory
to the Company stating that the Participant is acquiring Common Stock subject to
the Award for the Participant’s own account and not with any present intention
of selling or otherwise distributing the Common Stock.  The foregoing
requirements, and any assurances given pursuant to such requirements, will be
inoperative if (A) the issuance of the shares upon the exercise or acquisition
of Common Stock under the Award has been registered under a then currently
effective registration statement under the Securities Act, or (B) as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then applicable
securities laws.  The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the Common
Stock.

(g)

Withholding Obligations.  Unless prohibited by the terms of an Award Agreement,
the Company may, in its sole discretion, satisfy any federal, state or local tax
withholding obligation relating to an Award by any of the following means or by
a combination

11.

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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 Award; (iii)
withholding cash from an Award settled in cash; (iv) withholding payment from
any amounts otherwise payable to the Participant; or (v) by such other method as
may be set forth in the Award Agreement.

(h)

Electronic Delivery.  Any reference herein 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).

(i)

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 establish programs and procedures for deferral elections
to be made by Participants.  Deferrals by Participants will be made in
accordance with Section 409A of the Code. Consistent with Section 409A of the
Code, the Board may provide for distributions while a Participant is still an
employee or otherwise providing services to the Company.  The Board is
authorized to make deferrals of Awards and determine when, and in what annual
percentages, Participants may receive payments, including lump sum payments,
following the Participant’s termination of Continuous Service, and implement
such other terms and conditions consistent with the provisions of the Plan and
in accordance with applicable law.

(j)

Compliance with 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 of the Code, and, to the extent not so
exempt, in compliance with Section 409A of the Code.  If the Board determines
that any Award granted hereunder is not exempt from and is therefore subject to
Section 409A of the Code, the Award Agreement evidencing 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 of the Code is a “specified employee” for purposes of Section 409A
of the Code, no distribution or payment of any amount that is due because of a
“separation from service” (as defined in Section 409A of the Code without regard
to alternative definitions thereunder) will be issued or paid before the date
that is six (6) months 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
of the Code, and any amounts so deferred will be paid in a lump sum on the day
after such six (6) month period elapses, with the balance paid thereafter on the
original schedule.  

(k)

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

12.

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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. 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.

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

(a)

Capitalization Adjustments.  In the event of a Capitalization Adjustment, the
Board will appropriately and proportionately adjust: (i) the class(es) and
maximum number of securities subject to the Plan pursuant to Section 3(a); and
(ii) the class(es) and number of securities and price per share of stock subject
to outstanding Awards.  The Board will make such adjustments, and its
determination will be final, binding and conclusive.

(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, in its sole discretion, 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)

Certain Corporate Transactions.  In the event that the Company is a party to a
merger, consolidation, or a Change in Control (other than one described in
Section 13(g)(iv)) (a “Corporate Transaction”), all shares of Common Stock
acquired under the Plan and all Awards outstanding on the effective date of the
transaction shall be treated in the manner described in the definitive
transaction agreement (or, in the event the transaction does not entail a
definitive agreement to which the Company is party, in the manner determined by
the Board, with such determination having final and binding effect on all
parties), which agreement or determination need not treat all Awards (or
portions thereof) in an identical manner. Unless an Award Agreement provides
otherwise, the treatment specified in the transaction agreement or by the Board
may include (without limitation) one or more of the following with respect to
each outstanding Award:

(i)The continuation of such outstanding Award by the Company (if the Company is
the surviving entity);

(ii)The assumption of such outstanding Award by the surviving entity or its
parent, provided that the assumption of an Option or SAR shall comply with
applicable tax requirements;

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(iii)The substitution by the surviving entity or its parent of an equivalent
award for such outstanding Award (including, but not limited to, an award to
acquire the same consideration paid to the holders of Common Stock in the
transaction), provided that the substitution of an Option or SAR shall comply
with applicable tax requirements;

(iv)In the case of an Option or SAR, the cancellation of such Award without
payment of any consideration. A Participant shall be able to exercise his or her
outstanding Option or SAR, to the extent such Option or SAR is then vested or
becomes vested as of the effective time of the transaction, during a period of
not less than five full business days preceding the closing date of the
transaction, unless (i) a shorter period is required to permit a timely closing
of the transaction and (ii) such shorter period still offers the Participant a
reasonable opportunity to exercise such Option or SAR. Any exercise of such
Option or SAR during such period may be contingent on the closing of the
transaction;

(v)The cancellation of such Award and a payment to the Participant with respect
to each share subject to the portion of the Award that is vested or becomes
vested as of the effective time of the transaction equal to the excess of
(A) the value, as determined by the Board in its absolute discretion, of the
property (including cash) received by the holder of a share of Common Stock as a
result of the transaction, over (if applicable) (B) the per-share Exercise Price
of such Award (such excess, if any, the “Spread”). Such payment shall be made in
the form of cash, cash equivalents, or securities of the surviving entity or its
parent having a value equal to the Spread. In addition, any escrow,
holdback, earn-out or similar provisions in the transaction agreement may apply
to such payment to the same extent and in the same manner as such provisions
apply to the holders of Common Stock, but only to the extent the application of
such provisions does not adversely affect the status of the Award as exempt from
Code Section 409A. If the Spread applicable to an Award (whether or not vested)
is zero or a negative number, then the Award may be cancelled without making a
payment to the Participant. In the event that an Award is subject to Code
Section 409A, the payment described in this clause (v) shall be made on the
settlement date specified in the applicable Award Agreement, provided that
settlement may be accelerated in accordance with Treasury
Regulation Section 1.409A-3(j)(4); or

(vi)The assignment of any reacquisition or repurchase rights held by the Company
in respect of a Restricted Share Award to the surviving entity or its parent,
with corresponding proportionate adjustments made to the price per share to be
paid upon exercise of any such reacquisition or repurchase rights.

Unless an Award Agreement provides otherwise, each outstanding Award held by a
Participant who remains an Employee, Consultant or Director as of the effective
time of a Corporate Transaction (a “Current Participant”) shall become fully
vested (in the case of an Award subject to one or more Performance Goals at
deemed attainment at 100% of target levels) and, if applicable, exercisable
immediately prior to the effective time of the transaction. However the prior
sentence shall not apply, and an outstanding Award shall not become vested and,
if applicable, exercisable, if and to the extent the Award is continued, assumed
or substituted as provided for in clauses (i), (ii) or (iii) above. In addition,
the prior two sentences will not apply to an Award held by a Participant who is
not a Current Participant, unless an Award Agreement

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provides otherwise or unless the Company and the acquirer, purchaser or
successor entity (as applicable) agree otherwise.

For avoidance of doubt, the Board shall have the discretion, exercisable either
at the time an Award is granted or at any time while the Award remains
outstanding, to provide for the acceleration of vesting upon the occurrence of a
Corporate Transaction, whether or not the Award is to be assumed or replaced in
the transaction, or in connection with a termination of the Participant’s
Continuous Service following a transaction. Furthermore, no modification or
substitution of an Award shall, without the consent of the Participant, impair
the Participant’s rights or increase the Participant’s obligations under such
Award.

Any action taken under this Section 9(c) shall either preserve an Award’s status
as exempt from Code Section 409A or comply with Code Section 409A.

 

10.Termination or Suspension of the Plan.

The Board may suspend or terminate the Plan at any time. No Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.

11.Effective Date of the Plan.

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

12.Choice of Law.

The law of the State of Delaware will govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to that
state’s conflict of laws rules.

13.Definitions.  As used in the Plan, the following definitions will apply to
the capitalized terms indicated below:

(a)

“Affiliate” means, at the time of determination, any “parent” or “subsidiary” of
the Company as such terms are defined in Rule 405 of the Securities Act.  The
Board will have the authority to determine the time or times at which “parent”
or “subsidiary” status is determined within the foregoing definition.

(b)

“Award” means an Option, a Stock Appreciation Right, a Restricted Share Award or
a Restricted Stock Unit Award.

(c)

“Award Agreement” means a written agreement between the Company and a
Participant evidencing the terms and conditions of an Award.

(d)

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

(e)

“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

15.

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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, 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 shall not be treated as a Capitalization Adjustment.

(f)

“Cause” shall have the meaning ascribed to such term in any written agreement
between the Participant and the Company defining such term (and if there are
multiple such agreements, the most recent) and, in the absence of such
agreement, such term means, with respect to a Participant, the occurrence of any
of the following events:  (a) unauthorized use or disclosure of the Company’s
confidential information or trade secrets, which use or disclosure causes
material harm to the Company, (b) material breach of any agreement with the
Company, (c) material failure to comply with the Company’s written policies or
rules, (d) conviction of, or plea of “guilty” or “no contest” to, a felony under
the laws of the United States or any State, (e) gross negligence or willful
misconduct, (f) continuing failure to perform assigned duties after receiving
written notification of the failure from the Company or its Board or (g) failure
to cooperate in good faith with a governmental or internal investigation of the
Company or its directors, officers or employees, if the Company has requested
such cooperation.  The determination that a termination of the Participant’s
Continuous Service is either for Cause or without Cause shall be made by the
Company, in its sole discretion.  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 shall have no effect
upon any determination of the rights or obligations of the Company or such
Participant for any other purpose.

(g)

“Change in Control” means the occurrence, in a single transaction or in a series
of related transactions, of any one or more of the following events:

(i)Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing
more than fifty percent (50%) of the total voting power represented by the
Company’s then-outstanding voting securities;

(ii)The consummation of the sale or disposition by the Company of all or
substantially all of the Company’s assets;

(iii)The consummation of a merger or consolidation of the Company with or into
any other entity, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or its parent) more than fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity or its parent outstanding immediately after
such merger or consolidation; or

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(iv)Individuals who are members of the Board (the “Incumbent Board”) cease for
any reason to constitute at least a majority of the members of the Board over a
period of 12 months; provided, however, that if the appointment or election (or
nomination for election) of any new Board member was approved or recommended by
a majority vote of the members of the Incumbent Board then still in office, such
new member shall, for purposes of this Plan, be considered as a member of the
Incumbent Board.

A transaction shall not constitute a Change in Control or a Corporate
Transaction if its sole purpose is to change the state of the Company’s
incorporation or to create a holding company that will be owned in substantially
the same proportions by the persons who held the Company’s securities
immediately before such transaction. In addition, if a Change in Control or a
Corporate Transaction constitutes a payment event with respect to any Award
which provides for a deferral of compensation and is subject to Code
Section 409A, then notwithstanding anything to the contrary in the Plan or
applicable Award Agreement the transaction with respect to such Award must also
constitute a “change in control event” as defined in Treasury
Regulation Section 1.409A-3(i)(5) to the extent required by Code Section 409A.

(h)

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

(i)

“Committee” means a committee of one or more Independent Directors to whom
authority has been delegated by the Board in accordance with Section 2(c).

(j)

“Common Stock” means the common stock of the Company, par value $0. 0001 per
share.

(k)

“Company” means Arcus Biosciences, Inc., a Delaware corporation.

(l)

“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.

(m)

“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, Consultant or Director 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, in its sole discretion, such Participant’s Continuous Service will be
considered to have terminated on the date such Entity ceases to qualify as an
Affiliate. Continuous Service does not terminate when a Participant goes on a

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military leave, a sick leave or another bona fide leave of absence, if the leave
was approved by the Company in writing. However, the Participant’s Continuous
Service terminates when the approved leave ends, unless the Participant
immediately returns to active work.  If a Participant goes on an unpaid leave of
absence that lasts more than 30 days, then, to the extent permitted by
applicable law, the vesting schedule specified in the grant notice will be
suspended on the thirty-first day of such unpaid leave, and the Participant’s
Awards will not vest or become exercisable with respect to any additional shares
of Common Stock during the remainder of such leave. Vesting will resume when the
Participant returns to active Continuous Service. If a Participant goes on a
paid leave of absence, the vesting schedule specified in the notice of grant
with respect to such award may be adjusted and/or suspended by the Company.  If
a Participant commences working on a part-time basis, the Company may adjust the
vesting schedule of such Participant’s Awards so that the rate of vesting is
commensurate with the Participant’s reduced work schedule

(n)

“Corporate Transaction” shall have the meaning set forth in Section 9.

(o)

“Director” means a member of the Board.  Directors are not eligible to receive
Awards under the Plan with respect to their service in such capacity.

(p)

“Disability” means that a 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 one year.

(q)

“Effective Date” means January 22, 2020.

(r)

“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.

(s)

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

(t)

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

(u)

“Fair Market Value” means, as of any date, the value of the Common Stock
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 of a share of Common Stock will
be, unless otherwise determined by the Board, 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)Unless otherwise provided by the Board, 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.

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(iii)In the absence of such markets for the Common Stock, 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.

(v)

“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.

(w)

“Nonstatutory Stock Option” means any option granted pursuant to Section 5 of
the Plan that does not qualify as an “incentive stock option” within the meaning
of Section 422 of the Code.

(x)

“Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act or an “executive officer,” as defined under Rule
3b-7 of the Exchange Act.

(y)

“Option” means a Nonstatutory Stock Option to purchase shares of Common Stock
granted pursuant to the Plan which is granted pursuant to the terms and
conditions of Section 5.

(z)

“Option Agreement” means a written agreement between the Company and an
Optionholder evidencing the terms and conditions of an Option grant.  Each
Option Agreement will be subject to the terms and conditions of the Plan.

(aa)

“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.

(bb)

“Own,” “Owned,” “Owner,” “Ownership” 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.

(cc)

“Participant” means a person to whom an Award is granted pursuant to the Plan
or, if applicable, such other person who holds an outstanding Award.

(dd)

“Performance Goal” means a goal established by the Board for the applicable
Performance Period. Depending on the performance criteria used, a Performance
Goal may be expressed in terms of overall Company performance or the performance
of a business unit, division, product line, Subsidiary, Affiliate or an
individual. A Performance Goal may be measured either in absolute terms or
relative to the performance of one or more comparable companies or one or more
relevant indices or other external measures of the selected

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performance criteria. In addition, a Performance Goal may be measured on an
absolute or per-share basis, a GAAP or non-GAAP basis, in terms of growth or
percentage change, or on a pre-tax or post-tax basis (if applicable). The Board
may adjust the results under any performance criterion to exclude any of the
following events that occurs during a Performance Period: (a) asset write-downs,
(b) litigation, claims, judgments or settlements, (c) the effect of changes in
tax laws, accounting principles or other laws or provisions affecting reported
results, (d) accruals for reorganization and restructuring programs,
(e) extraordinary, unusual or non-recurring items, (f) exchange rate effects
for non-U.S. dollar denominated net sales and operating earnings, or
(g) statutory adjustments to corporate tax rates.

(ee)

“Performance Period” means a 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 an Award that vests based on the
achievement of Performance Goals. Performance Periods may be of varying and
overlapping duration, at the discretion of the Administrator.

(ff)

“Plan” means this Arcus Biosciences, Inc. 2020 Inducement Plan, as it may be
amended.

(gg)

“Restricted Share Award” means an award of Common Stock which is granted
pursuant to the terms and conditions of Section 6(a).

(hh)

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

(ii)

“Restricted Stock Unit Award” means a right to receive shares of Common Stock
which is granted pursuant to the terms and conditions of Section 6(b).

(jj)

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

(kk)

“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.

(ll)

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

(mm)

“Stock Appreciation Right” or “SAR” means a right to receive the appreciation on
Common Stock which is granted pursuant to the terms and conditions of Section 5.

(nn)

“Stock Appreciation Right Agreement” means a written agreement between the
Company and a holder of a Stock Appreciation Right evidencing the terms and
conditions of a Stock Appreciation Right grant.  Each Stock Appreciation Right
Agreement will be subject to the terms and conditions of the Plan.

20.

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(oo)

“Subsidiary” means, with respect to the Company, (i) any corporation of which
more than 50% of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether, at the time, stock of any other class or classes of such corporation
will have or might have voting power by reason of the happening of any
contingency) is at the time, directly or indirectly, Owned by the Company, and
(ii) any partnership, limited liability company or other entity in which the
Company has a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than 50%.

 

 

21.