Exhibit 10.17

Inducement Form of Grant

ZYNERBA PHARMACEUTICALS, INC.

 

NONQUALIFIED STOCK OPTION GRANT

This NONQUALIFIED STOCK OPTION GRANT AGREEMENT (this “Agreement”), dated as of
            , 201   (the “Date of Grant”), is delivered by Zynerba
Pharmaceuticals, Inc. (the “Company”) to                 (the “Grantee”).

RECITALS

A.The Company maintains the Amended and Restated Zynerba Pharmaceuticals, Inc.
2014 Omnibus Incentive Compensation Plan (the “Plan”), which provides the
general terms and restrictions for certain equity awards to the Company’s
employees, consultants and directors.  This Option is not awarded pursuant to
the Plan, but rather is intended to constitute a non-plan based “inducement
grant,” as described in Nasdaq Listing Rule 5635(c)(4).  Nonetheless, the terms
and provisions of the Plan are hereby incorporated into this Agreement by this
reference, as though fully set forth herein, as if this award was granted
pursuant to the Plan.

B.NOW, THEREFORE, the parties to this Agreement, intending to be legally bound
hereby, agree as follows:

1.Grant of Option.  Subject to the terms and conditions of this Agreement and
the Plan, the Company hereby grants to the Grantee a nonqualified stock option
(the “Option”) to purchase             shares of common stock of the Company
(“Shares”) at an exercise price of $          per Share.  The Option shall
become exercisable according to Paragraph 2 below.

 

2.Vesting and Exercisability of Option.  The Option shall become vested and
exercisable on the following dates, if the Grantee is employed by, or providing
service to, the Employer (as defined in the Plan) on the applicable vesting date
(each, a “Vesting Date”):

Twenty five percent (25%) on                with the balance vesting in twelve
equal quarterly installments thereafter, so that each option is 100% vested on
the fourth anniversary of the Date of Grant.

The vesting and exercisability of the Option is cumulative, but shall not exceed
100% of the Shares subject to the Option.  If the foregoing schedule would
produce fractional Shares, the number of Shares for which the Option becomes
vested and exercisable shall be rounded down to the nearest whole Share.

3.Term of Option.

(a)The Option shall have a term of ten years from the Date of Grant and shall
terminate at the expiration of that period, unless it is terminated at an
earlier date pursuant to the provisions of this Agreement or the Plan.

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(b)The Option shall automatically terminate upon the happening of the first of
the following events:

(i)The expiration of the 90-day period after the Grantee ceases to be employed
by, or provide service to, the Employer, if the termination is for any reason
other than Disability, death or Cause (as defined in the Plan).

(ii)The expiration of the one-year period after the Grantee ceases to be
employed by, or provide service to, the Employer on account of the Grantee’s
Disability.

(iii)The expiration of the one-year period after the Grantee ceases to be
employed by, or provide service to, the Employer, if the Grantee dies while
employed by, or providing service to, the Employer or within 90 days after the
Grantee ceases to be so employed or provide such services on account of a
termination described in subparagraph (i) above.

(iv)The date on which the Grantee ceases to be employed by, or provide service
to, the Employer for Cause.  In addition, notwithstanding the prior provisions
of this Paragraph 3, if the Grantee engages in conduct that constitutes Cause
after the Grantee’s employment or service terminates, the Option shall
immediately terminate, and the Grantee shall automatically forfeit all Shares
underlying any exercised portion of the Option for which the Company has not yet
delivered the Share certificates, upon refund by the Company of the exercise
price paid by the Grantee for such Shares.

Notwithstanding the foregoing, in no event may the Option be exercised after the
date that is immediately before the tenth anniversary of the Date of Grant.  Any
portion of the Option that is not exercisable at the time the Grantee ceases to
be employed by, or provide service to, the Employer shall immediately terminate.

4.Exercise Procedures.

(a)Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may
exercise part or all of the exercisable Option by giving the Company written
notice of intent to exercise in the manner provided in this Agreement,
specifying the number of Shares as to which the Option is to be exercised and
the method of payment.  Payment of the exercise price shall be made in
accordance with procedures established by the Board of Directors of the Company
(the “Board”) from time to time based on type of payment being made but, in any
event, prior to issuance of the Shares.  The Grantee shall pay the exercise
price (i) in cash, (ii) unless the Board determines otherwise, by delivering
Shares owned by the Grantee and having a Fair Market Value (as defined in the
Plan) on the date of exercise at least equal to the exercise price or by
attestation (on a form prescribed by the Board) to ownership of Shares having a
Fair Market Value on the date of exercise at least equal to the exercise price,
(iii) by payment through a broker in accordance with procedures permitted by
Regulation T of the Federal Reserve Board, (iv) by surrender of all or any part
of the vested Shares for the Option is exercisable to the Company for an
appreciation distribution payable in shares of common stock with a Fair Market
Value at the time of the Option surrender equal to the dollar amount by which
the then Fair Market Value of the shares of common stock subject to the
surrendered portion exceeds the aggregate exercise price payable for those
shares, or (v) by

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such other method as the Board may approve.  The Board may impose from time to
time such limitations as it deems appropriate on the use of Shares of the
Company to exercise the Option.

(b)The obligation of the Company to deliver Shares upon exercise of the Option
shall be subject to all applicable laws, rules, and regulations and such
approvals by governmental agencies as may be deemed appropriate by the Board,
including such actions as Company counsel shall deem necessary or appropriate to
comply with relevant securities laws and regulations.

(c)All obligations of the Company under this Agreement shall be subject to the
rights of the Company as set forth in the Plan to withhold amounts required to
be withheld for any taxes, if applicable.  Subject to Board approval, the
Grantee may elect to satisfy any tax withholding obligation of the Employer with
respect to the Option by having Shares withheld up to an amount that does not
exceed the minimum applicable withholding tax rate for federal (including FICA),
state and local tax liabilities.

5.Change of Control.  The provisions of the Plan applicable to a Change of
Control (as defined in the Plan) shall apply to the Option, and, in the event of
a Change of Control, the Board may take such actions as it deems appropriate
pursuant to the Plan.

6.Restrictions on Exercise.  Except as the Board may otherwise permit pursuant
to the Plan, only the Grantee may exercise the Option during the Grantee’s
lifetime and, after the Grantee’s death, the Option shall be exercisable
(subject to the limitations specified in the Plan) solely by the legal
representatives of the Grantee, or by the person who acquires the right to
exercise the Option by will or by the laws of descent and distribution, to the
extent that the Option is exercisable pursuant to this Agreement.

7.Grant Subject to Plan Provisions.  This grant not is made pursuant to the
Plan; however, the terms of the Plan are incorporated herein by reference, and
in all respects shall be interpreted in accordance with the Plan.  The grant and
exercise of the Option are subject to interpretations, regulations and
determinations concerning the Plan established from time to time by the Board in
accordance with the provisions of the Plan, including, but not limited to,
provisions pertaining to (a) rights and obligations with respect to withholding
taxes, (b) the registration, qualification or listing of the Shares, (c) changes
in capitalization of the Company and (d) other requirements of applicable law. 
The Board shall have the authority to interpret and construe the Option pursuant
to the terms of the Plan, and its decisions shall be conclusive as to any
questions arising hereunder.

8.No Employment or Other Rights.  The grant of the Option shall not confer upon
the Grantee any right to be retained by or in the employ or service of the
Employer and shall not interfere in any way with the right of the Employer to
terminate the Grantee’s employment or service at any time. The right of the
Employer to terminate the Grantee’s employment or service at any time for any
reason is specifically reserved.

9.No Stockholder Rights.  Neither the Grantee, nor any person entitled to
exercise the Grantee’s rights in the event of the Grantee’s death, shall have
any of the rights and privileges of a stockholder with respect to the Shares
subject to the Option, until certificates for Shares have been issued upon the
exercise of the Option.

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10.Assignment and Transfers.  Except as the Board may otherwise permit pursuant
to the Plan, the rights and interests of the Grantee under this Agreement may
not be sold, assigned, encumbered or otherwise transferred except, in the event
of the death of the Grantee, by will or by the laws of descent and
distribution.  In the event of any attempt by the Grantee to alienate, assign,
pledge, hypothecate, or otherwise dispose of the Option or any right hereunder,
except as provided for in this Agreement, or in the event of the levy or any
attachment, execution or similar process upon the rights or interests hereby
conferred, the Company may terminate the Option by notice to the Grantee, and
the Option and all rights hereunder shall thereupon become null and void.  The
rights and protections of the Company hereunder shall extend to any successors
or assigns of the Company and to the Company’s parents, subsidiaries, and
affiliates.  This Agreement may be assigned by the Company without the Grantee’s
consent.

11.Applicable Law.  The validity, construction, interpretation and effect of
this instrument shall be governed by and construed in accordance with the laws
of the State of Delaware, without giving effect to the conflicts of laws
provisions thereof.

12.Notice.  Any notice to the Company provided for in this instrument shall be
addressed to the Company in care of the General Counsel at                  ,
and any notice to the Grantee shall be addressed to such Grantee at the current
address shown on the payroll of the Employer, or to such other address as the
Grantee may designate to the Employer in writing.  Any notice shall be delivered
by hand, sent by telecopy or enclosed in a properly sealed envelope addressed as
stated above, registered and deposited, postage prepaid, in a post office
regularly maintained by the United States Postal Service.

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IN WITNESS WHEREOF, the Company has caused its duly authorized officers to
execute and attest this Agreement, and the Grantee has executed this Agreement,
effective as of the Date of Grant.

 

 

 

 

 

ZYNERBA PHARMACEUTICALS, INC.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

I hereby accept the Option described in this Agreement, and I agree to be bound
by the terms of this Agreement and the Plan.  I hereby further agree that all
the decisions and determinations of the Board shall be final and binding.

 

 

Grantee:

 

 

 

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