Exhibit 10.1

 

RIGEL PHARMACEUTICALS, INC.

 

INDUCEMENT PLAN

 

ADOPTED BY THE COMPENSATION COMMITTEE: October 10, 2016

 

1.                                      GENERAL.

 

(a)                                 Eligible Stock Award Recipients. The only
persons eligible to receive grants of Stock Awards under this Plan are
individuals who satisfy the standards for inducement grants under NASDAQ
Marketplace Rule 5635(c)(4) and the related guidance under NASDAQ IM 5635-1. A
person who previously served as an Employee or Director will not be eligible to
receive Stock Awards under the Plan, other than following a bona fide period of
non-employment. Persons eligible to receive grants of Stock Awards under this
Plan are referred to in this Plan as “Eligible Employees”. These Stock Awards
must be approved by either a majority of the Company’s “Independent Directors”
(as such term is defined in NASDAQ Listing Rule 5605(a)(2)) or the Company’s
compensation committee, provided such committee is comprised solely of
Independent Directors (the “Independent Compensation Committee”) in order to
comply with the exemption from the stockholder approval requirement for
“inducement grants” provided under Rule 5635(c)(4) of the NASDAQ Listing Rules.
NASDAQ Marketplace Rule 5635(c)(4) and the related guidance under NASDAQ IM
5635-1 are referred to in this Plan as the “Inducement Award Rules”.

 

(b)                                 Available Awards. The Plan provides for the
grant of Options and Restricted Stock Unit Awards. All Options will be
Nonstatutory Stock Options. Awards intended to qualify as stockholder-approved
performance based compensation for purposes of Section 162(m) of the Code may
not be granted under this Plan.

 

(c)                                  Purpose. This Plan, through the granting of
Stock Awards, is intended to provide (i) an inducement material for certain
individuals to enter into employment with the Company within the meaning of
Rule 5635(c)(4) of the NASDAQ Listing 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 Stock
Awards.

 

2.                                      ADMINISTRATION.

 

(a)                                 Administration by Board. The Board will
administer the Plan, provided, however, that Stock 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).

 

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(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:

 

(i)                                    To determine: (A) who will be granted
Stock Awards; (B) when and how each Stock Award will be granted; (C) what type
of Stock Award will be granted; (D) the provisions of each Stock Award (which
need not be identical), including when a person will be permitted to exercise or
otherwise receive cash or Common Stock under the Stock Award; (E) the number of
shares of Common Stock subject to, or the cash value of, a Stock Award; and
(F) the Fair Market Value applicable to a Stock Award; provided, however, that
Stock 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 Stock
Awards granted under it, and to establish, amend and revoke rules and
regulations for administration of the Plan and Stock Awards. The Board, in the
exercise of these powers, may correct any defect, omission or inconsistency in
the Plan or in any Stock Award Agreement, in a manner and to the extent it will
deem necessary or expedient to make the Plan or Stock Award fully effective.

 

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

 

(iv)                             To accelerate, in whole or in part, the time at
which a Stock 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 a Stock Award Agreement,
suspension or termination of the Plan will not materially impair a Participant’s
rights under his or her then-outstanding Stock Award without his or her written
consent except as provided in subsection (viii) below.

 

(vi)                             To amend the Plan in any respect the Board
deems necessary or advisable, including, without limitation, adopting amendments
relating to nonqualified deferred compensation under Section 409A of the Code
and/or making the Plan or Stock Awards granted under the Plan exempt from or
compliant with the requirements for nonqualified deferred compensation under
Section 409A of the Code, subject to the limitations, if any, of applicable law.
If required by applicable law or listing requirements, and except as provided in
Section 9(a) relating to Capitalization Adjustments, the Company will seek
stockholder approval of any amendment of the Plan that (A) materially increases
the number of shares of Common Stock available for issuance under the Plan,
(B) materially expands the class of individuals eligible to receive Stock Awards
under the Plan, (C) materially increases the benefits accruing to Participants
under the Plan, (D) materially reduces the price at which shares of Common Stock
may be issued or purchased under the Plan, (E) materially extends the term of
the Plan, or (F) materially expands the types of Stock Awards available for
issuance under the Plan. Except as otherwise provided in the Plan (including
subsection (viii) below) or a Stock Award Agreement, no amendment of the Plan
will materially impair a Participant’s rights under an outstanding Stock Award
without the Participant’s written consent.

 

(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.

 

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(viii)                     To approve forms of Stock Award Agreements for use
under the Plan and to amend the terms of any one or more outstanding Stock
Awards, including, but not limited to, amendments to provide terms more
favorable to the Participant than previously provided in the Stock Award
Agreement, subject to any specified limits in the Plan that are not subject to
Board discretion. A Participant’s rights under any Stock Award will not be
impaired by any such amendment unless the Company requests the consent of the
affected Participant, and the Participant consents in writing. However, 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. In
addition, subject to the limitations of applicable law, if any, the Board may
amend the terms of any one or more Stock Awards without the affected
Participant’s consent (A) to clarify the manner of exemption from, or to bring
the Stock Award into compliance with, Section 409A of the Code, or (B) to comply
with other applicable laws or listing requirements.

 

(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 and/or Stock Award Agreements.

 

(x)                                 To adopt such procedures and sub-plans as
are necessary or appropriate (A) to permit participation in the Plan by
individuals who are foreign nationals or employed outside the United States or
(B) allow Stock Awards to qualify for special tax treatment in a foreign
jurisdiction; provided that Board approval will not be necessary for immaterial
modifications to the Plan or any Stock Award Agreement that are required for
compliance with the laws of the relevant foreign jurisdiction.

 

(c)                                  Delegation to Committee.

 

(i)                                    General. 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 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.

 

(ii)                                Rule 16b-3 Compliance. The Committee may
consist solely of two or more Non-Employee Directors, in accordance with
Rule 16b-3 of the Exchange Act.

 

(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)                                  Cancellation and Re-Grant of Stock Awards. 
Neither the Board nor any Committee will have the authority to: (i) reduce the
exercise, purchase or strike price of any outstanding Option, or (ii) cancel any
outstanding Option that has an exercise price or strike price greater than the
current Fair Market Value of the Common Stock in exchange for cash or other
Stock Awards under the Plan, unless the stockholders of the Company have
approved such an action within twelve (12) months prior to such an event.

 

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3.                                      SHARES SUBJECT TO THE PLAN.

 

(a)                                 Share Reserve.

 

(i)                                    Subject to Section 9(a) relating to
Capitalization Adjustments, the aggregate number of shares of Common Stock that
may be issued pursuant to Stock Awards will not exceed 640,000 shares (the
“Share Reserve”).

 

(ii)                                Shares may be issued under the terms of this
Plan in connection with a merger or acquisition as permitted by 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.

 

(b)                                 Reversion of Shares to the Share Reserve. 
If a Stock Award or any portion of a Stock Award (i) expires or otherwise
terminates without all of the shares covered by the Stock 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 nevertheless reduce
(or otherwise offset) the number of shares of Common Stock that are available
for issuance under the Plan. If any shares of Common Stock issued under a Stock
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 not revert
to and again become available for issuance under the Plan. Any shares reacquired
by the Company in satisfaction of tax withholding obligations on a Stock Award
or as consideration for the exercise or purchase price of a Stock Award will not
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 Specific Stock Awards. Stock
Awards may only be granted to persons who are Eligible Employees described in
Section 1(a) of the Plan, where the Stock Award is an inducement material to the
individual’s entering into employment with the Company or an Affiliate within
the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules, provided however,
that Stock 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 Stock
Awards is treated as “service recipient stock” under Section 409A of the Code
(for example, because the Stock 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 Stock Awards are
otherwise exempt from or comply with the distribution requirements of
Section 409A of the Code.

 

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

 

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5.                                      PROVISIONS RELATING TO OPTIONS.

 

Each Option 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 need not be identical; provided, however, that
each Option Agreement will conform to (through incorporation of provisions
hereof by reference in the applicable Option Agreement or otherwise) the
substance of each of the following provisions:

 

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

 

(b)                                 Exercise Price. The exercise or strike price
of each Option will be not less than 100% of the Fair Market Value of the Common
Stock subject to the Option on the date the Option is granted. Notwithstanding
the foregoing, an Option may be granted with an exercise price lower than 100%
of the Fair Market Value of the Common Stock subject to the Option if such
Option 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 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 used 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 Option
Agreement.

 

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(d)                                 Transferability of Options. The Board may,
in its sole discretion, impose such limitations on the transferability of
Options as the Board will determine. In the absence of such a determination by
the Board to the contrary, the following restrictions on the transferability of
Options will apply:

 

(i)                                    Restrictions on Transfer. An Option 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 in a manner that is not prohibited by applicable
tax and securities laws. Except as explicitly provided in the Plan, an Option
may not be transferred for consideration.

 

(ii)                                Domestic Relations Orders. Subject to the
approval of the Board or a duly authorized Officer, an Option may be transferred
pursuant to the terms of a domestic relations order, official marital settlement
agreement or other divorce or separation instrument.

 

(iii)                            Beneficiary Designation. Subject to the
approval of the Board or a duly authorized Officer, 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 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 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.

 

(e)                                  Vesting Generally. The total number of
shares of Common Stock subject to an Option may vest and therefore become
exercisable in periodic installments that may or may not be equal. The Option
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 may vary. The provisions of this
Section 5(e) are subject to any Option provisions governing the minimum number
of shares of Common Stock as to which an Option may be exercised.

 

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(f)                                   Termination of Continuous Service. Except
as otherwise provided in the applicable Option 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 (to the extent that
the Participant was entitled to exercise such Option as of the date of
termination of Continuous Service) within the period of time ending on the
earlier of (i) the date which occurs 3 months following the termination of the
Participant’s Continuous Service, and (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after termination of Continuous
Service, the Participant does not exercise his or her Option within the
applicable time frame, the Option will terminate.

 

(g)                                 Extension of Termination Date. Except as
otherwise provided in the applicable Stock Award Agreement, if the exercise of
an Option following the termination of the Participant’s Continuous Service
(other than for Cause and other than upon the Participant’s death or Disability)
would be prohibited at any time solely because the issuance of shares of Common
Stock would violate the registration requirements under the Securities Act, then
the Option will terminate on the earlier of (i) the expiration of a total period
of time (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 exercise of the Option would not be in violation of such
registration requirements, and (ii) the expiration of the term of the Option as
set forth in the applicable Option Agreement. In addition, unless otherwise
provided in a Participant’s Option Agreement, if the sale of any Common Stock
received upon exercise of an Option following the termination of the
Participant’s Continuous Service (other than for Cause) would violate the
Company’s insider trading policy, then the Option will terminate on the earlier
of (i) the expiration of a period of days or 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 would not be in violation of
the Company’s insider trading policy, or (ii) the expiration of the term of the
Option as set forth in the applicable Option Agreement.

 

(h)                                 Disability of Participant. Except as
otherwise provided in the applicable Option 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 (to the extent that the Participant was entitled to
exercise such Option as of the date of termination of Continuous Service), but
only within such period of time ending on the earlier of (i) the date 12 months
following such termination of Continuous Service and (ii) the expiration of the
term of the Option as set forth in the Option Agreement. If, after termination
of Continuous Service, the Participant does not exercise his or her Option
within the applicable time frame, the Option will terminate.

 

(i)                                    Death of Participant. Except as otherwise
provided in the applicable Option Agreement or other agreement between the
Participant and the Company, if (i) a Participant’s Continuous Service
terminates as a result of the Participant’s death, or (ii) the Participant dies
within the period (if any) specified in the Option Agreement for exercisability
after the termination of the Participant’s Continuous Service for a reason other
than death, then the Option may be exercised (to the extent the Participant was
entitled to exercise such Option as of the date of death) by the Participant’s
estate, by a person who acquired the right to exercise the Option by bequest or
inheritance or by a person designated to exercise the Option upon the
Participant’s death, but only within the period ending on the earlier of (i) the
date 18 months following the date of death, and (ii) the expiration of the term
of such Option as set forth in the Option Agreement. If, after the Participant’s
death, the Option is not exercised within the applicable time frame, the Option
will terminate.

 

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(j)                                    Termination for Cause. Except as
explicitly provided otherwise in a Participant’s Stock Award Agreement or other
individual written agreement between the Company or any Affiliate and the
Participant, if a Participant’s Continuous Service is terminated for Cause, the
Option will terminate upon the date on which the event giving rise to the
termination for Cause first occurred, and the Participant will be prohibited
from exercising his or her Option from and after the date on which the event
giving rise to the termination for Cause first occurred (or, if required by
applicable law, the date of termination of Continuous Service). If a
Participant’s Continuous Service is suspended pending an investigation of the
existence of Cause, all of the Participant’s rights under the Option will also
be suspended during the investigation period, except to the extent prohibited by
applicable law.

 

(k)                                 Non-Exempt Employees. If an Option 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 will not be first
exercisable for any shares of Common Stock until at least 6 months following the
date of grant of the Option (although the Option may vest prior to 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 is not assumed, continued, or substituted, or
(iii) upon the non-exempt Employee’s retirement (as such term may be defined in
the non-exempt Employee’s Option Agreement in another agreement between the
non-exempt Employee 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 may be exercised earlier than 6 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 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 Option will
be exempt from such Employee’s regular rate of pay, the provisions of this
paragraph will apply to all Options and are hereby incorporated by reference
into such Option Agreements.

 

6.                                      PROVISIONS RELATING TO 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:

 

(a)                                 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.

 

(b)                                 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.

 

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(c)                                  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.

 

(d)                                 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.

 

(e)                                  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.

 

(f)                                   Termination of Participant’s Continuous
Service. Except as otherwise provided in the applicable Restricted Stock Unit
Award Agreement, such portion of the 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 Stock 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 Stock Awards and to
issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking will not require the Company to
register under the Securities Act the Plan, any Stock Award or any Common Stock
issued or issuable pursuant to any such Stock 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 Stock Awards unless and until such authority is
obtained. A Participant will not be eligible for the grant of a Stock Award or
the subsequent issuance of cash or Common Stock pursuant to the Stock 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 Stock Award. Furthermore, the
Company will have no duty or obligation to warn or otherwise advise such holder
of a pending termination or expiration of a Stock Award or a possible period in
which the Stock Award may not be exercised. The Company has no duty or
obligation to minimize the tax consequences of a Stock Award to the holder of
such Stock Award.

 

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8.                                      MISCELLANEOUS.

 

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

 

(b)                                 Corporate Action Constituting Grant of Stock
Awards. Corporate action constituting a grant by the Company of a Stock 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 Stock 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
Stock Award Agreement as a result of a clerical error in the papering of the
Stock Award Agreement, the corporate records will control and the Participant
will have no legally binding right to the incorrect term in the Stock 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 a Stock Award unless and until
(i) such Participant has satisfied all requirements for exercise of, or the
issuance of shares of Common Stock under, the Stock Award pursuant to its terms,
and (ii) the issuance of the Common Stock subject to such Stock Award has been
entered into the books and records of the Company.

 

(d)                                 No Employment or Other Service Rights.
Nothing in the Plan, any Stock Award Agreement or any other instrument executed
thereunder or in connection with any Stock 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 Stock 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,
including, but not limited to, 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 or
takes an extended leave of absence) after the date of grant of any Stock Award
to the Participant, the Board has the right in its sole discretion to (i) make a
corresponding reduction in the number of shares or cash amount subject to any
portion of such Stock Award that is scheduled to vest or become payable after
the date of such change in time commitment, and (ii) in lieu of or in
combination with such a reduction, extend the vesting or payment schedule
applicable to such Stock Award. In the event of any such reduction, the
Participant will have no right with respect to any portion of the Stock Award
that is so reduced or extended.

 

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(f)                                   Investment Assurances. The Company may
require a Participant, as a condition of exercising or acquiring Common Stock
under any Stock 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 Stock Award, and (ii) to give written assurances satisfactory to the Company
stating that the Participant is acquiring Common Stock subject to the Stock
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
(i) the issuance of the shares upon the exercise of a Stock Award or acquisition
of Common Stock under the Stock Award has been registered under a then currently
effective registration statement under the Securities Act, or (ii) 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 a Stock Award Agreement, the Company may, in its sole
discretion, satisfy any U.S. federal, state, local, foreign or other tax
withholding obligation relating to a Stock 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 Stock
Award; provided, however, that no shares of Common Stock are withheld with a
value exceeding the minimum amount of tax required to be withheld by law (or
such other amount as may be necessary to avoid classification of the Stock Award
as a liability for financial accounting purposes); (iii) withholding cash from a
Stock Award settled in cash; (iv) withholding payment from any amounts otherwise
payable to the Participant, including proceeds from the sale of shares of Common
Stock issued pursuant to a Stock Award; or (v) by such other method as may be
set forth in the Stock 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).

 

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(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 Stock 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 (to the extent applicable to a Participant). 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 Stock 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 a Stock Award Agreement and the Plan will be
interpreted to the greatest extent possible in a manner that makes the Plan and
the Stock 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 Stock Award granted hereunder is not exempt from and
is therefore subject to Section 409A of the Code, the Stock Award Agreement
evidencing such Stock 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 a Stock Award Agreement is silent on terms necessary for compliance,
such terms are hereby incorporated by reference into the Stock Award Agreement.
Notwithstanding anything to the contrary in this Plan (and unless the Stock
Award Agreement specifically provides otherwise), if the shares of Common Stock
are publicly traded, and if a Participant holding a Stock 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) 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 Stock 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. In addition, the
Board may impose such other clawback, recovery or recoupment provisions in a
Stock 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
an event constituting Cause. No recovery of compensation under such a clawback
policy will be an event giving rise to a right to resign for “good reason” or
“constructive termination” (or similar term) under any agreement with the
Company or an Affiliate.

 

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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 Stock Awards. The Board will
make such adjustments, and its determination will be final, binding and
conclusive.

 

(b)                                 Dissolution or Liquidation.  In the event of
a dissolution or liquidation of the Company, then all outstanding Stock Awards
shall terminate immediately prior to such event.

 

(c)                                  Corporate Transaction.  In the event of
(i) a sale, lease or other disposition of all or substantially all of the
securities or assets of the Company, (ii) a merger or consolidation in which the
Company is not the surviving corporation or (iii) a reverse merger in which the
Company is the surviving corporation but the shares of Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise (a
“Corporate Transaction”), then any surviving corporation or acquiring
corporation may assume any Stock Awards outstanding under the Plan or may
substitute similar stock awards (including an award to acquire the same
consideration paid to the stockholders in such Corporate Transaction) for those
outstanding under the Plan. In the event any surviving corporation or acquiring
corporation does not assume such Stock Awards or substitute similar stock awards
for those outstanding under the Plan, then with respect to Stock Awards held by
Participants whose Continuous Service has not terminated, the vesting of such
Stock Awards (and, if applicable, the time during which such Stock Awards may be
exercised) shall be accelerated in full, and the Stock Awards shall terminate if
not exercised (if applicable) at or prior to such event. With respect to any
other Stock Awards outstanding under the Plan, such Stock Awards shall terminate
if not exercised (if applicable) prior to such event.

 

10.                               TERMINATION OR SUSPENSION OF THE PLAN.

 

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

 

11.                               EFFECTIVE DATE OF PLAN; TIMING OF FIRST GRANT
OR EXERCISE.

 

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

 

12.                               CHOICE OF LAW.

 

The laws 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)                                 “Board” means the Board of Directors of the
Company.

 

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(c)                                  “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 Stock 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 other similar
equity restructuring transaction, as that term is used in 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.

 

(d)                                 “Cause” will have the meaning ascribed to
such term in any written agreement between the Participant and the Company or
any Affiliate 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: (i) such Participant’s conviction of any felony or any crime
involving moral turpitude or dishonesty, (ii) such Participant’s participation
in a fraud or act of dishonesty against the Company, (iii) such Participant’s
conduct that, based upon a good faith and reasonable factual investigation and
determination by the Board, demonstrates the Participant’s gross unfitness to
serve, or (iv) such Participant’s intentional, material violation of any
contract between the Company and the Participant or any statutory duty that the
Participant has to the Company that the Participant does not correct within 30
days after written notice to the Participant thereof. The determination as to
whether a Participant is being terminated for Cause will be made in good faith
by the Company and will be final and binding on the Participant. Any
determination by the Company that the Continuous Service of a Participant was
terminated with or without Cause for the purposes of outstanding Stock Awards
held by such Participant will have no effect upon any determination of the
rights or obligations of the Company, any Affiliate or such Participant for any
other purpose.

 

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

 

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

 

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

 

(h)                                 “Company” means Rigel Pharmaceuticals, Inc.,
a Delaware corporation.

 

(i)                                    “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.

 

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(j)                                    “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. 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. 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. 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. In
addition, if required for exemption from or compliance with Section 409A of the
Code, 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). A leave of absence will be treated as
Continuous Service for purposes of vesting in a Stock 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.

 

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

 

(l)                                    “Disability” means the permanent and
total disability of a person within the meaning of Section 22(e)(3) of the Code.

 

(m)                             “Effective Date” means October 10, 2016.

 

(n)                                 “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.

 

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

 

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

 

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(q)                                 “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.

 

(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 of the Code.

 

(r)                                  “Independent Director” has the meaning set
forth in Section 1(a) above.

 

(s)                                   “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 of the Exchange Act.

 

(t)                                    “Nonstatutory Stock Option” means any
option granted pursuant to Section 4(b) of the Plan that does not qualify as an
“incentive stock option” within the meaning of Section 422 of the Code.

 

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

 

(v)                                 “Option” means a Nonstatutory Stock Option
to purchase shares of Common Stock granted pursuant to the Plan.

 

(w)                               “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.

 

(x)                                 “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.

 

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

 

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(z)                                  “Plan” means this Rigel
Pharmaceuticals, Inc. Inducement Plan, as it may be amended.

 

(aa)                          “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).

 

(bb)                          “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.

 

(cc)                            “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.

 

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

 

(ee)                            “Stock Award” means any right to receive Common
Stock granted under the Plan, including an Option or a Restricted Stock Unit
Award.

 

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

 

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