EX-10.3



 Exhibit 10.3 

ARMO BIOSCIENCES, INC. 

2018 EQUITY INCENTIVE PLAN 

(AS ADOPTED ON JANUARY 5, 2018) 

 







 ARMO BIOSCIENCES, INC. 

2018 EQUITY INCENTIVE PLAN 

ARTICLE 1. INTRODUCTION. 
 The Board
adopted the Plan to become effective immediately, although no Awards may be granted prior to the IPO Date. The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging
Service Providers to focus on critical long-range corporate objectives, (b) encouraging the attraction and retention of Service Providers with exceptional qualifications and (c) linking Service Providers directly to stockholder interests
through increased stock ownership. The Plan seeks to achieve this purpose by providing for Awards in the form of Options (which may be ISOs or NSOs), SARs, Restricted Shares and Restricted Stock Units. Capitalized terms used in this Plan are defined
in Article 14. 
 ARTICLE 2. ADMINISTRATION. 

2.1 General. The Plan may be administered by the Board or one or more Committees. Each Committee shall comply with rules and regulations
applicable to it, including under the rules of any exchange on which the Common Shares are traded, and shall have the authority and be responsible for such functions as have been assigned to it. 

2.2 Section 16. To the extent desirable to qualify transactions hereunder as exempt under Exchange Act Rule 16b-3, the transactions contemplated hereunder will be approved by the entire Board or a Committee of two or more “non-employee directors” within the meaning of
Exchange Act Rule 16b-3. 
 2.3 Powers of Administrator. Subject to the terms of the
Plan, and in the case of a Committee, subject to the specific duties delegated to the Committee, the Administrator shall have the authority to (a) select the Service Providers who are to receive Awards under the Plan, (b) determine the
type, number, vesting requirements and other features and conditions of such Awards, (c) interpret the Plan and Awards granted under the Plan, (d) make, amend and rescind rules relating to the Plan and Awards granted under the Plan,
including rules relating to sub-plans established for the purposes of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws, (e) impose such
restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by a Participant of any Common Shares issued pursuant to an Award, including restrictions under an insider trading policy and
restrictions as to the use of a specified brokerage firm for such resales, and (f) make all other decisions relating to the operation of the Plan and Awards granted under the Plan. In addition, with regard to the terms and conditions of Awards
granted to Service Providers outside of the United States, the Administrator may vary from the provisions of the Plan to the extent it determines it necessary and appropriate to do so. 

2.4 Effect of Administrator’s Decisions. The Administrator’s decisions, determinations and interpretations shall be
final and binding on all interested parties. 
 2.5 Governing Law. The Plan shall be governed by, and construed in accordance
with, the laws of the State of Delaware (except its choice-of-law provisions). 







 ARTICLE 3. SHARES AVAILABLE FOR GRANTS. 

3.1 Basic Limitation. Common Shares issued pursuant to the Plan may be authorized but unissued shares or treasury shares. The
aggregate number of Common Shares issued under the Plan shall not exceed the sum of (a) 3,175,864 Common Shares, (b) any Common Shares subject to outstanding options under the Predecessor Plan on the IPO Date that subsequently are
forfeited, expire or lapse unexercised and Common Shares issued pursuant to awards granted under the Predecessor Plan that are outstanding on the IPO Date and that are subsequently forfeited to or repurchased by the Company, and (c) the
additional Common Shares described in Articles 3.2 and 3.3; provided, however, that no more than 2,269,610 Common Shares shall be added to the Plan pursuant to clause (b). The number of Common Shares that are subject to Stock Awards
outstanding at any time under the Plan may not exceed the number of Common Shares that then remain available for issuance under the Plan. The numerical limitations in this Article 3.1 shall be subject to adjustment pursuant to Article 9.

 3.2 Annual Increase in Shares. On the first day of each fiscal year of
the Company during the term of the Plan, commencing on January 1, 2019 and ending on (and including) January 1, 2028, the aggregate number of Common Shares that may be issued under the Plan shall automatically increase by a number equal to
the lesser of (a) 4% of the total number of Common Shares actually issued and outstanding on the last day of the preceding fiscal year, (b) 1,905,518 of Common Shares (subject to adjustment pursuant to Section 9.1 below), or (c) a
number of Common Shares determined by the Board. Notwithstanding the foregoing, the Board retains the right in its sole discretion to forego an increase for any fiscal year following an annual review by the Board of the share reserve of the Plan.

 3.3 Shares Returned to Reserve. To the extent that Options, SARs or Restricted Stock Units are forfeited, cancelled or
expire for any reason before being exercised or settled in full, the Common Shares subject to such Options, SARs or Restricted Stock Units shall again become available for issuance under the Plan. If SARs are exercised or Restricted Stock Units are
settled, then only the number of Common Shares (if any) actually issued to the Participant upon exercise of such SARs or settlement of such Restricted Stock Units, as applicable, shall reduce the number of Common Shares available under
Article 3.1 and the balance shall again become available for issuance under the Plan. If Restricted Shares or Common Shares issued upon the exercise of Options are reacquired by the Company pursuant to a forfeiture provision, repurchase right
or for any other reason, then such Common Shares shall again become available for issuance under the Plan. Common Shares applied to pay the Exercise Price of Options or to satisfy tax withholding obligations related to any Award shall again become
available for issuance under the Plan. To the extent that an Award is settled in cash rather than Common Shares, the cash settlement shall not reduce the number of Shares available for issuance under the Plan. 

3.4 Awards Not Reducing Share Reserve. To the extent permitted under applicable stock exchange listing standards, any dividend
equivalents paid or credited under the Plan with respect to Restricted Stock Units shall not be applied against the number of Common Shares that may be issued under the Plan, whether or not such dividend equivalents are converted into Restricted
Stock Units. In addition, Common Shares subject to Substitute Awards granted by the Company shall not reduce the number of Common Shares that may be issued under Article 3.1, nor shall shares subject to Substitute Awards again be available for
Awards under the Plan in the event of any forfeiture, expiration or cash settlement of such Substitute Awards. 

  
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 3.5 Code Section 422 and Other Limits. Subject to
adjustment in accordance with Article 9: 
 (a) The aggregate grant date fair value of Stock Awards granted to an Outside Director may not
exceed $500,000 in any one fiscal year of the Company. For purposes of this limitation, grant date fair value shall be determined in accordance with the assumptions that the Company uses to estimate the value of share-based payments for financial
reporting purposes. except that the grant date fair value of Stock Awards granted to a newly appointed Outside Director may not exceed $1,000,000 in the fiscal year of the Company in which such Outside Director is initially appointed to the Board.
This limitation shall not apply to Stock Awards or Common Shares granted pursuant to an Outside Director’s election to receive a Stock Award or Common Shares in lieu of cash retainers or other fees. In addition, Stock Awards granted to
an individual while he or she was an Employee or Consultant, but not an Outside Director, shall not count towards this limitation. 

(b) No more than 5,445,474 Common Shares may be issued under the Plan upon the exercise of ISOs. 

ARTICLE 4. ELIGIBILITY. 
 4.1
Incentive Stock Options. Only Employees who are common-law employees of the Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs. In addition, an Employee who owns more than 10% of
the total combined voting power of all classes of outstanding stock of the Company or any of its Parents or Subsidiaries shall not be eligible for the grant of an ISO unless the additional requirements set forth in Code Section 422(c)(5) are
satisfied. 
 4.2 Other Awards. Awards other than ISOs may only be granted to Service Providers. 

ARTICLE 5. OPTIONS. 
 5.1 Stock
Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms of the Plan and may be subject to any other terms
that are not inconsistent with the Plan. The Stock Option Agreement shall specify whether the Option is intended to be an ISO or an NSO. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. 

5.2 Number of Shares. Each Stock Option Agreement shall specify the number of Common Shares subject to the Option, which number
shall adjust in accordance with Article 9. 
 5.3 Exercise Price. Each Stock Option Agreement shall specify the Exercise
Price, which shall not be less than 100% of the Fair Market Value of a Common Share on the date of grant. The preceding sentence shall not apply to an Option that is a Substitute Award granted in a manner that would satisfy the requirements of Code
Section 409A and, if applicable, Code Section 424(a). 

  
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 5.4 Exercisability and Term. Each Stock Option Agreement shall specify the date or
event when all or any installment of the Option is to become vested and/or exercisable. The Stock Option Agreement shall also specify the term of the Option; provided that, except to the extent necessary to comply with applicable foreign law, the
term of an Option shall in no event exceed 10 years from the date of grant. A Stock Option Agreement may provide for accelerated vesting and/or exercisability upon certain specified events and may provide for expiration prior to the end of its
term in the event of the termination of the Optionee’s service. 
 5.5 Death of Optionee. After an Optionee’s death,
any vested and exercisable Options held by such Optionee may be exercised by his or her beneficiary or beneficiaries. Each Optionee may designate one or more beneficiaries for this purpose by filing the prescribed form with the Company. A
beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Optionee’s death. If no beneficiary was designated or if no designated beneficiary survives the Optionee, then any vested and
exercisable Options held by the Optionee may be exercised by his or her estate. 
 5.6 Modification or Assumption of Options.
Within the limitations of the Plan, the Administrator may modify, reprice, extend or assume outstanding options or may accept the cancellation of outstanding options (whether granted by the Company or by another issuer) in return for the grant of
new Options for the same or a different number of shares and at the same or a different exercise price or in return for the grant of a different type of Award. The foregoing notwithstanding, no modification of an Option shall, without the consent of
the Optionee, impair his or her rights or obligations under such Option. 
 5.7 Buyout Provisions. The Administrator may at any
time (a) offer to buy out for a payment in cash or cash equivalents an Option previously granted or (b) authorize an Optionee to elect to cash out an Option previously granted, in either case at such time and based upon such terms and
conditions as the Administrator shall establish. 
 5.8 Payment for Option Shares. The entire Exercise Price of Common Shares
issued upon exercise of Options shall be payable in cash or cash equivalents at the time when such Common Shares are purchased. In addition, the Administrator may, in its sole discretion and to the extent permitted by applicable law, accept payment
of all or a portion of the Exercise Price through any one or a combination of the following forms or methods: 
 (a) Subject to any
conditions or limitations established by the Administrator, by surrendering, or attesting to the ownership of, Common Shares that are already owned by the Optionee with a value on the date of surrender equal to the aggregate exercise price of the
Common Shares as to which such Option will be exercised; 
 (b) By delivering (on a form prescribed by the Company) an irrevocable direction
to a securities broker approved by the Company to sell all or part of the Common Shares being purchased under the Plan and to deliver all or part of the sales proceeds to the Company; 

(c) Subject to such conditions and requirements as the Administrator may impose from time to time, through a net exercise procedure; or 

(d) Through any other form or method consistent with applicable laws, regulations and rules. 

  
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 ARTICLE 6. STOCK APPRECIATION RIGHTS. 

6.1 SAR Agreement. Each grant of a SAR under the Plan shall be evidenced by a SAR Agreement between the Optionee and the Company.
Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR Agreements entered into under the Plan need not be identical. 

6.2 Number of Shares. Each SAR Agreement shall specify the number of Common Shares to which the SAR pertains, which number shall
adjust in accordance with Article 9. 
 6.3 Exercise Price. Each SAR Agreement shall specify the Exercise Price, which
shall in no event be less than 100% of the Fair Market Value of a Common Share on the date of grant. The preceding sentence shall not apply to a SAR that is a Substitute Award granted in a manner that would satisfy the requirements of Code
Section 409A. 
 6.4 Exercisability and Term. Each SAR Agreement shall specify the date when all or any installment of the
SAR is to become vested and exercisable. The SAR Agreement shall also specify the term of the SAR; provided that except to the extent necessary to comply with applicable foreign law, the term of a SAR shall not exceed 10 years from the date of
grant. A SAR Agreement may provide for accelerated vesting and exercisability upon certain specified events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s service. 

6.5 Exercise of SARs. Upon exercise of a SAR, the Optionee (or any person having the right to exercise the SAR after his or her
death) shall receive from the Company (a) Common Shares, (b) cash or (c) a combination of Common Shares and cash, as the Administrator shall determine. The amount of cash and/or the Fair Market Value of Common Shares received upon
exercise of SARs shall, in the aggregate, not exceed the amount by which the Fair Market Value (on the date of surrender) of the Common Shares subject to the SARs exceeds the Exercise Price. 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. A SAR Agreement may also
provide for an automatic exercise of the SAR on an earlier date. 
 6.6 Death of Optionee. After an Optionee’s death, any
vested and exercisable SARs held by such Optionee may be exercised by his or her beneficiary or beneficiaries. Each Optionee may designate one or more beneficiaries for this purpose by filing the prescribed form with the Company. A beneficiary
designation may be changed by filing the prescribed form with the Company at any time before the Optionee’s death. If no beneficiary was designated or if no designated beneficiary survives the Optionee, then any vested and exercisable SARs held
by the Optionee at the time of his or her death may be exercised by his or her estate. 
 6.7 Modification or Assumption of
SARs. Within the limitations of the Plan, the Administrator may modify, reprice, extend or assume outstanding stock appreciation rights or may accept the cancellation of outstanding stock appreciation rights (whether granted by the Company or by
another issuer) in return for the grant of new SARs for the same or a different number of shares and at the same or a different exercise price or in return for the grant of a different type of Award. The foregoing notwithstanding, no modification of
a SAR shall, without the consent of the Optionee, impair his or her rights or obligations under such SAR. 

  
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 ARTICLE 7. RESTRICTED SHARES. 

7.1 Restricted Stock Agreement. Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Stock Agreement
between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Stock
Agreements entered into under the Plan need not be identical. 
 7.2 Payment for Awards. Restricted Shares may be sold or
awarded under the Plan for such consideration as the Administrator may determine, including (without limitation) cash, cash equivalents, property, cancellation of other equity awards, promissory notes, past services and future services, and such
other methods of payment as are permitted by applicable law. 
 7.3 Vesting Conditions. Each Award of Restricted Shares may or
may not be subject to vesting and/or other conditions as the Administrator may determine. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Agreement. A Restricted Stock Agreement
may provide for accelerated vesting upon certain specified events. 
 7.4 Voting and Dividend Rights. The holders of Restricted
Shares awarded under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders, unless the Administrator otherwise provides. A Restricted Stock Agreement, however, may require that any cash dividends
paid on Restricted Shares (a) be accumulated and paid when such Restricted Shares vest, or (b) be invested in additional Restricted Shares. Such additional Restricted Shares shall be subject to the same conditions and restrictions as the
shares subject to the Stock Award with respect to which the dividends were paid. In addition, unless the Administrator provides otherwise, if any dividends or other distributions are paid in Common Shares, such Common Shares shall be subject to the
same restrictions on transferability and forfeitability as the Restricted Shares with respect to which they were paid. 
 7.5
Modification or Assumption of Restricted Shares. Within the limitations of the Plan, the Administrator may modify or assume outstanding Restricted Shares or may accept the cancellation of outstanding restricted shares (whether granted by the
Company or by another issuer) in return for the grant of new Restricted Shares for the same or a different number of shares or in return for the grant of a different type of Award. The foregoing notwithstanding, no modification of Restricted Shares
shall, without the consent of the Participant, impair his or her rights or obligations under such Restricted Shares. 
 ARTICLE 8. RESTRICTED STOCK
UNITS. 
 8.1 Restricted Stock Unit Agreement. Each grant of Restricted Stock Units under the Plan shall be
evidenced by a Restricted Stock Unit Agreement between the recipient and the Company. Such Restricted Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The
provisions of the various Restricted Stock Unit Agreements entered into under the Plan need not be identical. 

  
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 8.2 Payment for Awards. To the extent that an Award is granted in the form of
Restricted Stock Units, no cash consideration shall be required of the Award recipients. 
 8.3 Vesting Conditions. Each Award
of Restricted Stock Units may or may not be subject to vesting, as determined by the Administrator. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Unit Agreement. A Restricted
Stock Unit Agreement may provide for accelerated vesting upon certain specified events. 
 8.4 Voting and Dividend Rights. The
holders of Restricted Stock Units shall have no voting rights. Prior to settlement or forfeiture, Restricted Stock Units awarded under the Plan may, at the Administrator’s discretion, provide for a right to dividend equivalents. Such right
entitles the holder to be credited with an amount equal to all cash dividends paid on one Common Share while the Restricted Stock Unit is outstanding. Dividend equivalents may be converted into additional Restricted Stock Units. Settlement of
dividend equivalents may be made in the form of cash, in the form of Common Shares, or in a combination of both. Prior to distribution, any dividend equivalents shall be subject to the same conditions and restrictions as the Restricted Stock Units
to which they attach. 
 8.5 Form and Time of Settlement of Restricted Stock Units. Settlement of vested
Restricted Stock Units may be made in the form of (a) cash, (b) Common Shares or (c) any combination of both, as determined by the Administrator. The actual number of Restricted Stock Units eligible for settlement may be larger or
smaller than the number included in the original Award, based on predetermined performance factors. Methods of converting Restricted Stock Units into cash may include (without limitation) a method based on the average value of Common Shares over a
series of trading days. Vested Restricted Stock Units shall be settled in such manner and at such time(s) as specified in the Restricted Stock Unit Agreement. Until an Award of Restricted Stock Units is settled, the number of such Restricted Stock
Units shall be subject to adjustment pursuant to Article 9. 
 8.6 Death of Recipient. Any Restricted Stock Units that
become payable after the recipient’s death shall be distributed to the recipient’s beneficiary or beneficiaries. Each recipient of Restricted Stock Units under the Plan may designate one or more beneficiaries for this purpose by filing the
prescribed form with the Company. A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Award recipient’s death. If no beneficiary was designated or if no designated beneficiary survives
the Award recipient, then any Restricted Stock Units that become payable after the recipient’s death shall be distributed to the recipient’s estate. 

8.7 Modification or Assumption of Restricted Stock Units. Within the limitations of the Plan, the Administrator may
modify or assume outstanding restricted stock units or may accept the cancellation of outstanding restricted stock units (whether granted by the Company or by another issuer) in return for the grant of new Restricted Stock Units for the same or a
different number of shares or in return for the grant of a different type of Award. The foregoing notwithstanding, no modification of a Restricted Stock Unit shall, without the consent of the Participant, impair his or her rights or obligations
under such Restricted Stock Unit. 
 8.8 Creditors’ Rights. A holder of Restricted Stock Units shall have no
rights other than those of a general creditor of the Company. Restricted Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Restricted Stock Unit Agreement. 

  
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 ARTICLE 9. ADJUSTMENTS; DISSOLUTIONS AND LIQUIDATIONS; CORPORATE TRANSACTIONS. 

9.1 Adjustments. In the event of a subdivision of the outstanding Common Shares, a declaration of a dividend payable in Common
Shares, a combination or consolidation of the outstanding Common Shares (by reclassification or otherwise) into a lesser number of Common Shares or any other increase or decrease in the number of issued Common Shares effected without receipt of
consideration by the Company, proportionate adjustments shall be made to the following: 
 (a) The number and kind of shares available for
issuance under Article 3, including the numerical share limits in Articles 3.1 and 3.5; 
 (b) The number and kind of shares covered by
each outstanding Option, SAR and Restricted Stock Unit; and/or 
 (c) The Exercise Price applicable to each outstanding Option and SAR, and
the repurchase price, if any, applicable to Restricted Shares. 
 In the event of a declaration of an extraordinary dividend payable in a form other than
Common Shares in an amount that has a material effect on the price of Common Shares, a recapitalization, a spin-off or a similar occurrence, the Administrator may make such adjustments as it, in its sole
discretion, deems appropriate to the foregoing. Any adjustment in the number of shares subject to an Award under this Article 9.1 shall be rounded down to the nearest whole share, although the Administrator in its sole discretion may make a cash
payment in lieu of a fractional share. Except as provided in this Article 9, a Participant shall have no rights by reason of any issuance by the Company of stock of any class or securities convertible into stock of any class, any subdivision or
consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class. 

9.2 Dissolution or Liquidation. To the extent not previously exercised or settled, Options, SARs and Restricted Stock Units shall
terminate immediately prior to the dissolution or liquidation of the Company. 
 9.3 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 Article 14.6(d)), all Common Shares acquired under the Plan and all Stock 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 Administrator, with such determination
having final and binding effect on all parties), which agreement or determination need not treat all Stock Awards (or portions thereof) in an identical manner. Unless an Award Agreement provides otherwise, the treatment specified in the transaction
agreement or by the Administrator may include (without limitation) one or more of the following with respect to each outstanding Stock Award: 

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

  
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 (b) The assumption of such outstanding Stock Award by the surviving entity or its
parent, provided that the assumption of an Option or a SAR shall comply with applicable tax requirements; 
 (c) The
substitution by the surviving entity or its parent of an equivalent award for such outstanding Stock Award (including, but not limited to, an award to acquire the same consideration paid to the holders of Common Shares in the transaction), provided
that the substitution of an Option or a SAR shall comply with applicable tax requirements; 
 (d) In the case of an Option or
SAR, the cancellation of such Stock Award without payment of any consideration. An Optionee 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 Optionee 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; 

(e) The cancellation of such Stock Award and a payment to the Participant with respect to each share subject to the portion of
the Stock 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 Administrator in its absolute discretion, of the property (including cash) received by
the holder of a Common Share as a result of the transaction, over (if applicable) (B) the per-share Exercise Price of such Stock 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 Shares. If the Spread applicable to a Stock Award (whether or not vested) is zero or a negative number, then the Stock
Award may be cancelled without making a payment to the Participant. In the event that a Stock Award is subject to Code Section 409A, the payment described in this clause (e) 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 

(f) The assignment of any reacquisition or repurchase rights held by the Company in respect of an Award of Restricted Shares 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 Stock Award held by a Participant who remains a Service Provider as of the effective time of a
merger, consolidation or Change in Control (other than one described in Article 14.6(d)) (a “Current Participant”) shall become fully vested and, if applicable, exercisable immediately prior to the effective time of the transaction.
However the prior sentence shall not apply, and an outstanding Stock Award shall 

  
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not become vested and, if applicable, exercisable, if and to the extent the Stock Award is continued, assumed or substituted as provided for in clauses (a), (b) or (c) above. In
addition, the prior two sentences will not apply to a Stock Award held by a Participant who is not a Current Participant, unless an Award Agreement provides otherwise or unless the Company and the acquirer agree otherwise. 

For avoidance of doubt, the Administrator shall have the discretion, exercisable either at the time a Stock Award is granted or at any time while the Stock
Award remains outstanding, to provide for the acceleration of vesting upon the occurrence of a Change in Control, whether or not the Stock Award is to be assumed or replaced in the transaction, or in connection with a termination of the
Participant’s service following a transaction. 
 Any action taken under this Article 9.3 shall either preserve a Stock Award’s status as exempt
from Code Section 409A or comply with Code Section 409A. 
 ARTICLE 10. OTHER AWARDS. 

Subject in all events to the limitations under Article 3 above as to the number of Common Shares available for issuance under this Plan, the
Company may grant other forms of equity-based awards not specifically described herein and may grant awards under other plans or programs, where such awards are settled in the form of Common Shares issued under this Plan. Such Common Shares shall be
treated for all purposes under the Plan like Common Shares issued in settlement of Restricted Stock Units and shall, when issued, reduce the number of Common Shares available under Article 3. 

ARTICLE 11. LIMITATION ON RIGHTS. 

11.1 Retention Rights. Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to
remain a Service Provider. The Company and its Parents, Subsidiaries and Affiliates reserve the right to terminate the service of any Service Provider at any time, with or without cause, subject to applicable laws, the Company’s certificate of
incorporation and by-laws and a written employment agreement (if any). 
 11.2
Stockholders’ Rights. Except as set forth in Article 7.4 or 8.4 above, a Participant shall have no dividend rights, voting rights or other rights as a stockholder with respect to any Common Shares covered by his or her
Award prior to the time when a stock certificate for such Common Shares is issued or, if applicable, the time when he or she becomes entitled to receive such Common Shares by filing any required notice of exercise and paying any required Exercise
Price. No adjustment shall be made for cash dividends or other rights for which the record date is prior to such time, except as expressly provided in the Plan. 

11.3 Regulatory Requirements. Any other provision of the Plan notwithstanding, the obligation of the Company to issue Common
Shares under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of Common Shares pursuant
to any Award prior to the satisfaction of all legal requirements relating to the issuance of such Common Shares, to their registration, qualification or listing or to an exemption from registration, qualification or listing. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed necessary by the Company’s counsel to be necessary to the lawful issuance and sale of any Common Shares hereunder, will relieve the Company of
any liability in respect of the failure to issue or sell such Common Shares as to which such requisite authority will not have been obtained. 

  
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 11.4 Transferability of Awards. The Administrator may, in its sole
discretion, permit transfer of an Award in a manner consistent with applicable law. Unless otherwise determined by the Administrator, Awards shall be transferable by a Participant only by (a) beneficiary designation, (b) a will or
(c) the laws of descent and distribution; provided that, in any event, an ISO may only be transferred by will or by the laws of descent and distribution and may be exercised during the lifetime of the Optionee only by the Optionee or by
the Optionee’s guardian or legal representative. 
 11.5 Other Conditions and Restrictions on Common Shares. Any Common
Shares issued under the Plan shall be subject to such forfeiture conditions, rights of repurchase, rights of first refusal, other transfer restrictions and such other terms and conditions as the Administrator may determine. Such conditions and
restrictions shall be set forth in the applicable Award Agreement and shall apply in addition to any restrictions that may apply to holders of Common Shares generally. In addition, Common Shares issued under the Plan shall be subject to such
conditions and restrictions imposed either by applicable law or by Company policy, as adopted from time to time, designed to ensure compliance with applicable law or laws with which the Company determines in its sole discretion to comply including
in order to maintain any statutory, regulatory or tax advantage. All Awards granted under the Plan, all amounts paid under the Plan and all Common Shares issued under the Plan shall be subject to recoupment in accordance with the Dodd-Frank Wall
Street Reform and Consumer Protection Act and any implementing regulations and/or listing standards thereunder, any compensation recovery policy adopted by the Company or as otherwise required by applicable law. 

ARTICLE 12. TAXES. 
 12.1
General. It is a condition to each Award under the Plan that a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any federal, state, local or foreign withholding tax obligations
that arise in connection with any Award granted under the Plan. The Company shall not be required to issue any Common Shares or make any cash payment under the Plan unless such obligations are satisfied. 

12.2 Share Withholding. To the extent that applicable law subjects a Participant to tax withholding obligations, the
Administrator may permit such Participant to satisfy all or part of such obligations by having the Company withhold all or a portion of any Common Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Common
Shares that he or she previously acquired. Such Common Shares shall be valued on the date when they are withheld or surrendered. Any payment of taxes by assigning Common Shares to the Company may be subject to restrictions including any restrictions
required by SEC, accounting or other rules. 
 12.3 Section 409A Matters. Except as otherwise expressly set forth in an Award
Agreement, it is intended that Awards granted under the Plan either be exempt from, or comply with, the requirements of Code Section 409A. To the extent an Award is subject to Code Section 409A (a “409A Award”), the terms
of the Plan, the Award and any written agreement governing the Award shall be interpreted to comply with the requirements of Code Section 409A so that the Award is not subject to additional tax or interest under Code Section 409A, unless
the 

  
 11 








 
Administrator expressly provides otherwise. A 409A Award shall be subject to such additional rules and requirements as specified by the Administrator from time to time in order for it to comply
with the requirements of Code Section 409A. In this regard, if any amount under a 409A Award is payable upon a “separation from service” to an individual who is considered a “specified employee” (as each term is defined
under Code Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the Participant’s separation from service or (ii) the Participant’s death, but only to
the extent such delay is necessary to prevent such payment from being subject to Code Section 409A(a)(1). 
 12.4 Limitation
on Liability. Neither the Company nor any person serving as Administrator shall have any liability to a Participant in the event an Award held by the Participant fails to achieve its intended characterization under applicable tax law. 

ARTICLE 13. FUTURE OF THE PLAN. 

13.1 Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board, subject to
approval of the Company’s stockholders under Article 13.3 below. The Plan shall terminate automatically 10 years after the date when the Board adopted the Plan. 

13.2 Amendment or Termination. The Board may, at any time and for any reason, amend or terminate the Plan. No Awards shall be
granted under the Plan after the termination thereof. The termination of the Plan, or any amendment thereof, shall not affect any Award previously granted under the Plan. 

13.3 Stockholder Approval. To the extent required by applicable law, the Plan will be subject to the approval of the
Company’s stockholders within 12 months of its adoption date. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules. 

ARTICLE 14. DEFINITIONS. 
 14.1
“Administrator” means the Board or any Committee administering the Plan in accordance with Article 2. 
 14.2
“Affiliate” means any entity other than a Subsidiary, if the Company and/or one or more Subsidiaries own not less than 50% of such entity. 

14.3 “Award” means any award granted under the Plan, including as an Option, a SAR, a Restricted Share or a Restricted Stock
Unit. 
 14.4 “Award Agreement” means a Stock Option Agreement, a SAR Agreement, a Restricted Stock Agreement, a Restricted
Stock Unit Agreement or such other agreement evidencing an Award granted under the Plan. 
 14.5 “Board” means the
Company’s Board of Directors, as constituted from time to time and, where the context so requires, reference to the “Board” may refer to a Committee to whom the Board has delegated authority to administer any aspect of this Plan. 


  
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 14.6 “Change in Control” means: 

(a) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power represented by the Company’s
then-outstanding voting securities; 
 (b) The consummation of the sale or disposition by the Company of all or substantially all of the
Company’s assets; 
 (c) The consummation of a merger or consolidation of the Company with 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 

(d) 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 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 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. 
 14.7
“Code” means the Internal Revenue Code of 1986, as amended. 
 14.8 “Committee” means a committee of one or
more members of the Board, or of other individuals satisfying applicable laws, appointed by the Board to administer the Plan. 
 14.9
“Common Share” means one share of the common stock of the Company. 
 14.10 “Company” means ARMO
BioSciences, Inc., a Delaware corporation. 
 14.11 “Consultant” means a consultant or adviser who provides bona fide
services to the Company, a Parent, a Subsidiary or an Affiliate as an independent contractor and who qualifies as a consultant or advisor under Instruction A.1.(a)(1) of Form S-8 under the Securities Act. 


  
 13 








 14.12 “Employee” means a common-law
employee of the Company, a Parent, a Subsidiary or an Affiliate. 
 14.13 “Exchange Act” means the Securities Exchange Act
of 1934, as amended. 
 14.14 “Exercise Price,” in the case of an Option, means the amount for which one Common Share may be
purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement. “Exercise Price,” in the case of a SAR, means an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market
Value of one Common Share in determining the amount payable upon exercise of such SAR. 
 14.15 “Fair Market Value” means
the closing price of a Common Share on any established stock exchange or a national market system on the applicable date or, if the applicable date is not a trading day, on the last trading day prior to the applicable date, as reported in a source
that the Administrator deems reliable. If Common Shares are not traded on an established stock exchange or a national market system, the Fair Market Value shall be determined by the Administrator in good faith on such basis as it deems appropriate.
The Administrator’s determination shall be conclusive and binding on all persons. 
 14.16 “IPO Date” means the
effective date of the registration statement filed by the Company with the Securities and Exchange Commission for its initial offering of the Common Shares to the public. 

14.17 “ISO” means an incentive stock option described in Code Section 422(b). 

14.18 “NSO” means a stock option not described in Code Sections 422 or 423. 

14.19 “Option” means an ISO or NSO granted under the Plan and entitling the holder to purchase Common Shares. 

14.20 “Optionee” means an individual or estate holding an Option or SAR. 

14.21 “Outside Director” means a member of the Board who is not an Employee. 

14.22 “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if
each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date
after the adoption of the Plan shall be considered a Parent commencing as of such date. 
 14.23 “Participant” means an
individual or estate holding an Award. 
 14.24 “Plan” means this ARMO BioSciences, Inc. 2018 Equity Incentive Plan, as
amended from time to time. 
 14.25 “Predecessor Plan” means the Company’s 2012 Stock Plan. 

14.26 “Restricted Share” means a Common Share awarded under the Plan. 

  
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 14.27 “Restricted Stock Agreement” means the agreement between the Company and
the recipient of a Restricted Share that contains the terms, conditions and restrictions pertaining to such Restricted Share. 
 14.28
“Restricted Stock Unit” means a bookkeeping entry representing the equivalent of one Common Share, as awarded under the Plan. 

14.29 “Restricted Stock Unit Agreement” means the agreement between the Company and the recipient of a Restricted Stock Unit
that contains the terms, conditions and restrictions pertaining to such Restricted Stock Unit. 
 14.30 “SAR” means a stock
appreciation right granted under the Plan. 
 14.31 “SAR Agreement” means the agreement between the Company and an Optionee
that contains the terms, conditions and restrictions pertaining to his or her SAR. 
 14.32 “Securities Act” means the
Securities Act of 1933, as amended. 
 14.33 “Service Provider” means any individual who is an Employee, Outside Director or
Consultant. 
 14.34 “Stock Award” means any equity-based award granted under the Plan, including an Option, a SAR, a
Restricted Share or a Restricted Stock Unit. 
 14.35 “Stock Option Agreement” means the agreement between the Company and
an Optionee that contains the terms, conditions and restrictions pertaining to his or her Option. 
 14.36 “Subsidiary”
means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date 

14.37 “Substitute Awards” means Awards or Common Shares issued by the Company in assumption of, or substitution or exchange
for, awards previously granted, or the right or obligation to make future awards, in each case by a corporation acquired by the Company or any Affiliate or with which the Company or any Affiliate combines to the extent permitted by Nasdaq
Marketplace Rule 5635 or any successor thereto. 

  
 15 








 ARMO BIOSCIENCES, INC. 

2018 EQUITY INCENTIVE PLAN 

NOTICE OF STOCK OPTION GRANT 

You have been granted the following option to purchase shares of the common stock of ARMO BioSciences, Inc. (the “Company”): 

 

					
		 	Name of Optionee:	  	«Name»
			
		 	Total Number of Shares:	  	«TotalShares»
			
		 	Type of Option:	  	Nonstatutory Stock Option
			
		 	Exercise Price per Share:	  	«PricePerShare»
			
		 	Date of Grant:	  	«DateGrant»
			
		 	Vesting Commencement Date:	  	«VestDay»
			
		 	Vesting Schedule:	  	This option vests and becomes exercisable with respect to the first «CliffPercent» of the shares subject to this option when you complete «CliffPeriod» months of continuous service as an [Employee or
Consultant][Outside Director] (“Service”) after the Vesting Commencement Date. Thereafter, this option vests and becomes exercisable with respect to an additional «IncrementalPercent» of the shares subject to this option when
you complete each additional month of continuous Service thereafter. In addition, if the Company experiences a Change in Control before your Service terminates and you are subject to an Involuntary Termination in connection with or within 12 months
after such Change in Control, 100% of the shares shall immediately vest and become exercisable.
			
		 	Expiration Date:	  	«ExpDate». This option expires earlier if your Service terminates earlier, as described in the Stock Option Agreement, and may terminate earlier in connection with certain corporate transactions as described in Article 9
of the Plan.

 You and the Company agree that this option is granted under and governed by the terms and conditions of the Company’s
2018 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement, both of which are attached to, and made a part of, this document. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the
Plan and Stock Option Agreement. 
 [The Company may, in its sole discretion, decide to deliver any documents related to options awarded under the Plan,
future options that may be awarded under the Plan and all other documents that the Company is required to deliver to security holders (including annual reports and proxy statements) by email or other electronic means (including by posting them on a
website maintained by the Company or a third party under contract with the Company). You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through any on-line
or electronic system established and maintained by the Company or another third party designated by the Company.] 
 You further agree to comply with the
Company’s Insider Trading Policy when selling shares of the Company’s common stock. 







 ARMO BIOSCIENCES, INC. 

2018 EQUITY INCENTIVE PLAN 

STOCK OPTION AGREEMENT 

 

			
	Grant of Option	  	 Subject to all of the terms and conditions set forth in the Notice of Stock Option Grant (the “Grant Notice”), this Stock Option
Agreement (the “Agreement”) and the Plan, the Company has granted you an option to purchase up to the total number of shares specified in the Grant Notice at the exercise price indicated in the Grant Notice.

 
 All capitalized terms used in this Agreement shall have the meanings assigned to them
in this Agreement, the Grant Notice or the Plan.

		
	Tax Treatment	  	This option is intended to be a [nonstatutory] stock option, as provided in the Grant Notice.
		
	Vesting	  	 This option vests and becomes exercisable in accordance with the vesting schedule set forth in the Grant Notice.

 
 In no event will this option vest or become exercisable for additional shares after
your Service has terminated for any reason.

		
	Term of Option	  	This option expires in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Date of Grant, as shown in the Grant Notice. (This option will expire earlier if your Service terminates
earlier, as described below, and this option may be terminated earlier as provided in Article 9 of the Plan.)
		
	Termination of Service	  	If your Service terminates for any reason, this option will expire to the extent it is unvested as of your termination date and does not vest as a result of your termination of Service. The Company determines when your Service
terminates for all purposes of this option.
		
	Regular Termination	  	If your Service terminates for any reason except death or total and permanent disability, then this option, to the extent vested as of your termination date, will expire at the close of business at Company headquarters on the date
three months after your termination date.
		
	Death	  	If you die before your Service terminates, then this option will expire at the close of business at Company headquarters on the date twelve months after the date of death.
		
	Disability	  	If your Service terminates because of your total and permanent disability, then this option will expire at the close of business at Company headquarters on the date six months after your termination
date.









			
		  	For all purposes under this Agreement, “total and permanent disability” means that you are 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.
		
	Leaves of Absence and Part-Time Work	  	 For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave
of absence, if the leave was approved by the Company in writing. However, your Service terminates when the approved leave ends, unless you immediately return to active work.
  

If you go 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 this option will not vest or become exercisable with respect to any additional shares during the remainder of such leave. Vesting will resume when you return to active
Service. If you go on a paid leave of absence, the vesting schedule specified in the Notice of Stock Option Grant may be adjusted and/or suspended in accordance with the Company’s leave of absence policy or the terms of your leave.

 
 If you commence working on a part-time basis, the Company may adjust the vesting
schedule so that the rate of vesting is commensurate with your reduced work schedule.

		
	Restrictions on Exercise	  	The Company will not permit you to exercise this option if the issuance of shares at that time would violate any law or regulation.
		
	Notice of Exercise	  	 When you wish to exercise this option, you must notify the Company by filing the proper “Notice of Exercise” form at the address
given on the form or, if the Company has designated a third party to administer the Plan, you must notify such third party in the manner such third party requires. Your notice must specify how many shares you wish to purchase. The notice will be
effective when the Company receives it.
  
 However, if you wish to exercise this
option by executing a same-day sale (as described below), you must follow the instructions of the Company and the broker who will execute the sale.

 
 If someone else wants to exercise this option after your death, that person must prove
to the Company’s satisfaction that he or she is entitled to do so.
  
 You may
only exercise your option for whole shares.



  
 2 









			
	Form of Payment	  	 When you submit your notice of exercise, you must make arrangements for the payment of the option exercise price for the shares that you are
purchasing. To the extent permitted by applicable law, payment may be made in one (or a combination of two or more) of the following forms:
  

•    By delivering to the Company your personal check, a cashier’s check or a money
order, or arranging for a wire transfer.
  

•    By giving to a securities broker approved by the Company irrevocable directions to sell
all or part of your option shares and to deliver to the Company, from the sale proceeds, an amount sufficient to pay the option exercise price and any withholding taxes. (The balance of the sale proceeds, if any, will be delivered to you.) The
directions must be given in accordance with the instructions of the Company and the broker. This exercise method is sometimes called a “same-day sale.”

		
	Withholding Taxes	  	You will not be allowed to exercise this option unless you make arrangements acceptable to the Company and/or the Parent, Subsidiary or Affiliate employing you to pay any withholding taxes that may be due as a result of the option
exercise. These arrangements include payment in cash or via the same-day sale procedure described above. With the Company’s consent, these arrangements may also include (a) withholding shares of
Company stock that otherwise would be issued to you when you exercise this option with a value equal to withholding taxes, (b) surrendering shares that you previously acquired with a value equal to the withholding taxes, or (c) withholding
cash from other compensation. The value of withheld or surrendered shares, determined as of the date when taxes otherwise would have been withheld in cash, will be applied to the withholding taxes.
		
	Restrictions on Resale	  	You agree not to sell any option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for
such period of time after the termination of your Service as the Company may specify.
		
	Transfer of Option	  	 Prior to your death, only you may exercise this option. You cannot transfer or assign this option. For instance, you may not sell this option
or use it as security for a loan. If you attempt to do any of these things, this option will immediately become invalid. You may, however, dispose of this option in your will or by means of a written beneficiary designation which must be filed with
the Company on the proper form; provided, however, that your beneficiary or a representative of your estate acknowledges and agrees in writing in a form reasonably acceptable to the Company, to be bound by the provisions of this Agreement and the
Plan as if such beneficiary or representative of the estate were you.
  
 Regardless of
any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your former spouse, nor is the Company obligated to recognize your former spouse’s interest in your option in any other
way.



  
 3 









			
	No Retention Rights	  	Your option or this Agreement does not give you the right to be retained by the Company, a Parent, Subsidiary, or an Affiliate in any capacity. The Company and its Parents, Subsidiaries, and Affiliates reserve the right to terminate
your Service at any time, with or without cause.
		
	Stockholder Rights	  	You, or your estate or heirs, have no rights as a stockholder of the Company until you have exercised this option by giving the required notice to the Company, paying the exercise price, and satisfying any applicable withholding
taxes. No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.
		
	Recoupment Policy	  	This option, and the shares acquired upon exercise of this option, shall be subject to any Company recoupment or clawback policy in effect from time to time.
		
	Adjustments	  	In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share will be adjusted pursuant to the Plan.
		
	Effect of Significant Corporate Transactions	  	If the Company is a party to a merger, consolidation, or certain change in control transactions, then this option will be subject to the applicable provisions of Article 9 of the Plan.
		
	Applicable Law	  	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to its choice-of-law provisions).
		
	The Plan and Other Agreements	  	 The text of the Plan is incorporated in this Agreement by reference.

 
 This Plan, this Agreement and the Grant Notice constitute the entire understanding
between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded. This Agreement may be amended only by another written agreement between the parties.

		
	Definitions	  	“Cause” means (i) your unauthorized use or disclosure of the Company’s confidential information or trade secrets, which use or disclosure causes material harm to the Company; (ii) your material breach of any
agreement between you and the Company; (iii) your material failure to comply with


  
 4 









			
		  	 the Company’s written policies or rules; (iv) your conviction of, or plea of “guilty” or “no contest” to, a
felony under the laws of the United States or any state thereof; (v) your gross negligence or willful misconduct; (vi) your continuing failure to perform assigned duties after receiving written notification of such failure from the
Company’s Board of Directors; or (vii) your 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 your cooperation.

 
 “Change of Control” means (a) any “person” (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (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; (b)the consummation of the sale or disposition by the Company of all
or substantially all of the Company’s assets; (c) the consummation of a merger or consolidation of the Company with 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 (d) individuals who are members of the Company’s Board of Directors (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the members of the Board of Directors over a period of 12 months; provided, however, that if the appointment or election (or nomination for election) of any new member to the
Board of Directors was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall be considered as a member of the Incumbent Board.

 
 A transaction shall not constitute a Change in Control 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. 

 
 “Good Reason” means one of the following conditions has come into existence
without your consent: (i) a reduction in your base salary by more than 10%; (ii) a material diminution of your authority, duties or responsibilities; or (iii) a relocation of your principal workplace by more than 30 miles. A condition will
not be considered “Good Reason” unless you give the Company written notice of the condition within 90 days after the condition comes into existence and the Company fails to remedy the condition within 30 days after receiving your written
notice.



  
 5 









			
		  	“Involuntary Termination” means a termination of your Service due to (i) your involuntary discharge by the Company (or the Parent, Subsidiary or Affiliate employing you) for reasons other than Cause or (ii) your
voluntary resignation for Good Reason.

 BY ACCEPTING THIS OPTION GRANT, YOU AGREE TO ALL OF THE TERMS 

AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN. 

  
 6