exv10w12






Exhibit 10.12




NUPATHE INC.




2005 EQUITY COMPENSATION PLAN,



AMENDED AND RESTATED, EFFECTIVE NOVEMBER 15, 2007


















 








NUPATHE INC.


2005 EQUITY COMPENSATION PLAN, 




AMENDED AND RESTATED NOVEMBER 15, 2007



     The purpose of the NuPathe Inc. 2005 Equity Compensation Plan, as amended and restated
effective November 15, 2007 (the “Plan”) is to provide (i) designated employees of NuPathe Inc.
(the “Company”) and its subsidiaries, (ii) certain consultants and advisors who perform services
for the Company or its subsidiaries and (iii) non-employee members of the Board of Directors of the
Company (the “Board”) with the opportunity to receive grants of incentive stock options,
nonqualified stock options, stock awards, stock units and other equity-based awards. The Company
believes that the Plan will encourage the participants to contribute materially to the growth of
the Company, thereby benefiting the Company’s shareholders, and will align the economic interests
of the participants with those of the shareholders.



SECTION 1 Administration




     (a) Committee. The Plan shall be administered and interpreted by the Board or by a
committee consisting of members of the Board, which shall be appointed by the Board (the
“Committee”). However, the Board may ratify or approve any grants as it deems appropriate, and the
Board shall approve and administer all grants made to non-employee directors. The Committee may
delegate authority to one or more subcommittees, as it deems appropriate. To the extent the Board
or a subcommittee administers the Plan, references in the Plan to the “Committee” shall be deemed
to refer to such Board or subcommittee.



     (b) Committee Authority. The Committee shall have the sole authority to (i) determine
the individuals to whom grants shall be made under the Plan, (ii) determine the type, size and
terms of the grants to be made to each such individual, (iii) determine the time when the grants
will be made and the duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend the terms of any
previously issued grant, and (v) deal with any other matters arising under the Plan.



     (c) Committee Determinations. The Committee shall have full power and authority to
administer and interpret the Plan, to make factual determinations and to adopt or amend such rules,
regulations, agreements and instruments for implementing the Plan and for the conduct of its
business as it deems necessary or advisable, in its sole discretion. The Committee’s
interpretations of the Plan and all determinations made by the Committee pursuant to the powers
vested in it hereunder shall be conclusive and binding on all persons having any interest in the
Plan or in any awards granted hereunder. All powers of the Committee shall be executed in its sole
discretion, in the best interest of the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated individuals.



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SECTION 2 Grants




     Awards under the Plan may consist of grants of incentive stock options as described in Section
5 (“Incentive Stock Options”), nonqualified stock options as described in Section 5 (“Nonqualified
Stock Options”) (Incentive Stock Options and Nonqualified Stock Options are collectively referred
to as “Options”), stock awards as described in Section 6 (“Stock Awards”), stock units as described
in Section 7 (“Stock Units”) and other equity-based awards as described in Section 8 (“Other Equity
Awards”) (collectively referred to herein as “Grants”). All Grants shall be subject to the terms
and conditions set forth herein and to such other terms and conditions consistent with this Plan as
the Committee deems appropriate and as are specified in writing by the Committee to the individual
in a grant instrument or an amendment to the grant instrument (the “Grant Instrument”). All Grants
shall be made conditional upon the Grantee’s acknowledgement, in writing or by acceptance of the
Grant, that all decisions and determinations of the Committee shall be final and binding on the
Grantee, his beneficiaries and any other person having or claiming an interest under such Grant.
Grants under a particular Section of the Plan need not be uniform as among the Grantees.



SECTION 3 Shares Subject to the Plan




     (a) Shares Authorized. Subject to adjustment as described below, the aggregate number
of shares of common stock of the Company (“Company Stock”) that may be issued or transferred under
the Plan is three million eight hundred (3,800,000) shares.



     (b) Determination of Authorized Shares. The shares may be authorized but unissued
shares of Company Stock or reacquired shares of Company Stock. If and to the extent Options
granted under the Plan terminate, expire, or are canceled, forfeited, exchanged or surrendered
without having been exercised or if any Stock Awards, Stock Units, or Other Equity Awards are
forfeited, the shares subject to such Grants shall again be available for purposes of the Plan.
Shares of Company Stock surrendered in payment of the exercise price of an Option shall again be
available for issuance or transfer under the Plan.



     (c) Adjustments. If there is any change in the number or kind of shares of Company
Stock outstanding by reason of a spinoff, stock dividend, stock split, reverse stock split or
recapitalization affecting the outstanding Company Stock as a class without the Company’s receipt
of consideration, the maximum number of shares of Company Stock available for Grants, the number
and kind of shares covered by outstanding Grants, the kind of shares to be issued or transferred
under the Plan, and the price per share or the applicable market value of such Grants shall be
adjusted by the Committee in an equitable manner to reflect any increase or decrease in the number
of, or change in the kind or value of, issued shares of Company Stock to preclude, to the extent
practicable, the enlargement or dilution of rights and benefits under such Grants; provided,
however, that any fractional shares resulting from such adjustment shall be eliminated.
Notwithstanding the foregoing, the Committee shall have the discretion to make an equitable
adjustment in any circumstances in which such an adjustment is not mandated by this subsection (c)
or applicable law. Any adjustments to outstanding Grants shall be consistent with section 409A or
424 of the Code, to the extent applicable. Any adjustments determined by the Committee shall be
final, binding and conclusive.



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SECTION 4 Eligibility for Participation




     (a) Eligible Persons. All employees of the Company and its subsidiaries, including
Employees who are officers or members of the Board (“Employees”), and members of the Board who are
not Employees (“Non-Employee Directors”) shall be eligible to participate in the Plan. Consultants
and advisors who perform services for the Company or any of its subsidiaries (“Key Advisors”) shall
be eligible to participate in the Plan if the Key Advisors render bona fide services to the Company
or its subsidiaries, the services are not in connection with the offer and sale of securities in a
capital-raising transaction and the Key Advisors do not directly or indirectly promote or maintain
a market for the Company’s securities.



     (b) Selection of Grantees. The Committee shall select the Employees, Non-Employee
Directors and Key Advisors to receive Grants and shall determine the number of shares of Company
Stock subject to a particular Grant in such manner as the Committee determines. Employees, Key
Advisors and Non-Employee Directors who receive Grants under this Plan shall hereinafter be
referred to as “Grantees.”



SECTION 5 Options




     The Committee may grant Options to an Employee, Non-Employee Director or Key Advisor, upon
such terms as the Committee deems appropriate. The following provisions are applicable to Options:



     (a) Number of Shares. The Committee shall determine the number of shares of Company
Stock that will be subject to each Grant of Options to Employees, Non-Employee Directors and Key
Advisors.



     (b) Type of Option and Price.



          (i) The Committee may grant Incentive Stock Options that are intended to qualify as “incentive
stock options” within the meaning of section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”) or Nonqualified Stock Options that are not intended so to qualify or any combination
of Incentive Stock Options and Nonqualified Stock Options, all in accordance with the terms and
conditions set forth herein. Incentive Stock Options may be granted only to Employees.
Nonqualified Stock Options may be granted to Employees, Non-Employee Directors and Key Advisors.




          (ii) The purchase price (the “Exercise Price”) of Company Stock subject to an Option shall be
determined by the Committee and may be equal to or greater than the Fair Market Value (as defined
below) of a share of Company Stock on the date the Option is granted; provided, however, that an
Incentive Stock Option may not be granted to an Employee who, at the time of grant, owns stock
possessing more than 10% of the total combined voting power of all classes of stock of the Company
or any subsidiary of the Company, unless the Exercise Price per share is not less than 110% of the
Fair Market Value of Company Stock on the date of grant.




          (iii) If the Company Stock is publicly traded, then the Fair Market Value per share shall be
determined as follows: (A) if the principal trading market for the Company Stock is a national
securities exchange, the last reported sale price thereof on the relevant date (or if




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there were no trades on that date, the latest preceding date upon which a sale was reported),
or (B) if the Company Stock is not principally traded on such exchange, the mean between the last
reported “bid” and “asked” prices of Company Stock on the relevant date, as reported on the OTC
Bulletin Board or as reported in a customary financial reporting service, as applicable and as the
Committee determines. If the Company Stock is not publicly traded or, if publicly traded, is not
subject to reported transactions or “bid” or “asked” quotations as set forth above, the Fair Market
Value per share shall be as determined by the Committee through any reasonable valuation method
authorized under the Code.




     (c) Option Term. The Committee shall determine the term of each Option. The term of
any Option shall not exceed ten years from the date of grant. However, an Incentive Stock Option
that is granted to an Employee who, at the time of grant, owns stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company, or any subsidiary of the
Company, may not have a term that exceeds five years from the date of grant.



     (d) Exercisability of Options.



          (i) Options shall become exercisable in accordance with such terms and conditions, consistent
with the Plan, as may be determined by the Committee and specified in the Grant Instrument. The
Committee may accelerate the exercisability of any or all outstanding Options at any time for any
reason.




          (ii) The Committee may provide in a Grant Instrument that the Grantee may elect to exercise
part or all of an Option before it otherwise has become exercisable. Any shares so purchased shall
be restricted shares and shall be subject to a repurchase right in favor of the Company during a
specified restriction period, with the repurchase price equal to the lesser of (A) the Exercise
Price or (B) the Fair Market Value of such shares at the time of repurchase, or such other
restrictions as the Committee deems appropriate.




     (e) Grants to Non-Exempt Employees. Notwithstanding the foregoing, Options granted to
persons who are non-exempt employees under the Fair Labor Standards Act of 1938, as amended, may
not be exercisable for at least six months after the date of grant (except that such Options may
become exercisable, as determined by the Committee, upon the Grantee’s death, Disability or
retirement, or upon a Change of Control or other circumstances permitted by applicable
regulations).



     (f) Termination of Employment, Disability or Death.



          (i) Except as provided below, an Option may only be exercised while the Grantee is employed
by, or providing service to, the Employer (as defined below) as an Employee, Key Advisor or member
of the Board.




          (ii) In the event that a Grantee ceases to be employed by, or provide service to, the Employer
for any reason other than Disability, death, or termination for Cause (as defined below), any
Option which is otherwise exercisable by the Grantee shall terminate unless exercised within 90
days after the date on which the Grantee ceases to be employed by, or provide service to, the
Employer (or within such other period of time as may be specified by the Committee), but in any
event no later than the date of expiration of the Option term. Except as






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otherwise provided by the Committee, any of the Grantee’s Options that are not otherwise
exercisable as of the date on which the Grantee ceases to be employed by, or provide service to,
the Employer shall terminate as of such date.




          (iii) In the event the Grantee ceases to be employed by, or provide service to, the Employer
on account of a termination for Cause by the Employer, any Option held by the Grantee shall
terminate as of the date the Grantee ceases to be employed by, or provide service to, the Employer.
In addition, notwithstanding any other provisions of this Section 5, if the Committee determines
that the Grantee has engaged in conduct that constitutes Cause at any time while the Grantee is
employed by, or providing service to, the Employer or after the Grantee’s termination of employment
or service, any Option held by the Grantee shall immediately terminate and the Grantee shall
automatically forfeit all shares underlying any exercised portion of an Option for which the
Company has not yet delivered the share certificates, upon refund by the Company of the Exercise
Price paid by the Grantee for such shares. Upon any exercise of an Option, the Company may
withhold delivery of share certificates pending resolution of an inquiry that could lead to a
finding resulting in a forfeiture.




          (iv) In the event the Grantee ceases to be employed by, or provide service to, the Employer on
account of the Grantee’s Disability, any Option which is otherwise exercisable by the Grantee shall
terminate unless exercised within one year after the date on which the Grantee ceases to be
employed by, or provide service to, the Employer (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Grantee’s Options which are not
otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide
service to, the Employer shall terminate as of such date.




          (v) If the Grantee dies while employed by, or providing service to, the Employer or within 90
days after the date on which the Grantee ceases to be employed or provide service on account of a
termination specified in Section 5(f)(ii) above (or within such other period of time as may be
specified by the Committee), any Option that is otherwise exercisable by the Grantee shall
terminate unless exercised within one year after the date on which the Grantee ceases to be
employed by, or provide service to, the Employer (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Grantee’s Options that are not
otherwise exercisable as of the date on which the Grantee ceases to be employed by, or provide
service to, the Employer shall terminate as of such date.




          (vi) For purposes of the Plan:





          (A) The term “Employer” shall mean the Company and its subsidiary corporations or other
affiliates, as determined by the Committee.




          (B) “Employed by, or provide service to, the Employer” shall mean employment or service
as an Employee, Key Advisor or member of the Board (so that, for purposes of exercising
Options and satisfying conditions with respect to other Grants, a Grantee shall not be
considered to have terminated employment or service until the



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Grantee ceases to be an Employee, Key Advisor and member of the Board), unless the
Committee determines otherwise.




          (C) “Disability” shall mean a Grantee’s becoming disabled within the meaning of section
22(e)(3) of the Code, within the meaning of the Employer’s long-term disability plan
applicable to the Grantee, or as otherwise determined by the Committee.




          (D) “Cause” shall mean, except to the extent otherwise specified by the Committee, a
finding by the Committee that the Grantee (i) has materially breached his or her employment
or service contract with the Employer, which breach has not been remedied by the Grantee
after written notice has been provided to the Grantee of such breach, (ii) has engaged in
disloyalty to the Employer, including, without limitation, fraud, embezzlement, theft,
commission of a felony or proven dishonesty, (iii) has disclosed trade secrets or
confidential information of the Employer to persons not entitled to receive such
information, (iv) has breached any written non-competition or non-solicitation agreement
between the Grantee and the Employer or (v) has engaged in such other behavior detrimental
to the interests of the Employer as the Committee determines.



     (g) Exercise of Options. A Grantee may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the Company. The Grantee
shall pay the Exercise Price for an Option as specified by the Committee (i) in cash, (ii) with the
approval of the Committee, by delivering shares of Company Stock owned by the Grantee (including
Company Stock acquired in connection with the exercise of an Option, subject to such restrictions
as the Committee deems appropriate) and having a Fair Market Value on the date of exercise equal to
the Exercise Price or by attestation (on a form prescribed by the Committee) to ownership of shares
of Company Stock having a Fair Market Value on the date of exercise equal to the Exercise Price,
(iii) after a Public Offering (as defined in Section 19) of the Company’s stock, payment through a
broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, or
(iv) by such other method as the Committee may approve. Shares of Company Stock used to exercise
an Option shall have been held by the Grantee for the requisite period of time to avoid adverse
accounting consequences to the Company with respect to the Option. The Grantee shall pay the
Exercise Price and the amount of any withholding tax due (pursuant to Section 9) at such time as
may be specified by the Committee.



     (h) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide
that, if the aggregate Fair Market Value of the stock on the date of the grant with respect to
which Incentive Stock Options are exercisable for the first time by a Grantee during any calendar
year, under the Plan or any other stock option plan of the Company or a subsidiary, exceeds
$100,000, then the Option, as to the excess, shall be treated as a Nonqualified Stock Option. An
Incentive Stock Option shall not be granted to any person who is not an Employee of the Company.



SECTION 6 Stock Awards




     The Committee may issue or transfer shares of Company Stock to an Employee, Non-Employee
Director or Key Advisor under a Stock Award, upon such terms as the Committee deems appropriate.
The following provisions are applicable to Stock Awards:



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     (a) General Requirements. Shares of Company Stock issued or transferred pursuant to
Stock Awards may be issued or transferred for cash consideration or for no cash consideration, and
subject to restrictions or no restrictions, as determined by the Committee. The Committee may, but
shall not be required to, establish conditions under which restrictions on Stock Awards shall lapse
over a period of time or according to such other criteria as the Committee deems appropriate,
including, without limitation, restrictions based upon the achievement of specific performance
goals. The period of time during which the Stock Awards will remain subject to restrictions will
be designated in the Grant Instrument as the “Restriction Period.”



     (b) Number of Shares. The Committee shall determine the number of shares of Company
Stock to be issued or transferred pursuant to a Stock Award and the restrictions applicable to such
shares.



     (c) Requirement of Employment or Service. Unless the Committee determines otherwise,
if the Grantee ceases to be employed by, or provide service to, the Employer during a period
designated in the Grant Instrument as the Restriction Period, or if other specified conditions are
not met, the Stock Award shall terminate as to all shares covered by the Grant as to which the
restrictions have not lapsed, and those shares of Company Stock must be immediately returned to the
Company. The Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.



     (d) Restrictions on Transfer and Legend on Stock Certificate. During the Restriction
Period, a Grantee may not sell, assign, transfer, pledge or otherwise dispose of the shares of a
Stock Award except to a successor under Section 10(a). Each certificate for a share of a Stock
Award shall contain a legend giving appropriate notice of the restrictions in the Grant. The
Grantee shall be entitled to have the legend removed from the stock certificate covering the shares
subject to restrictions when all restrictions on such shares have lapsed. The Committee may
determine that the Company will not issue certificates for Stock Awards until all restrictions on
such shares have lapsed, or that the Company will retain possession of certificates for shares of
Stock Awards until all restrictions on such shares have lapsed.



     (e) Right to Vote and to Receive Dividends. Unless the Committee determines
otherwise, during the Restriction Period, the Grantee shall have the right to vote shares of Stock
Awards and to receive any dividends or other distributions paid on such shares, subject to any
restrictions deemed appropriate by the Committee, including, without limitation, the achievement of
specific performance goals.



     (f) Lapse of Restrictions. All restrictions imposed on Stock Awards shall lapse upon
the expiration of the applicable Restriction Period and the satisfaction of all conditions imposed
by the Committee. The Committee may determine, as to any or all Stock Awards, that the
restrictions shall lapse without regard to any Restriction Period.



SECTION 7 Stock Units




     The Committee may grant Stock Units representing one or more shares of Company Stock to an
Employee, Non-Employee Director or Key Advisor, upon such terms and conditions as the Committee
deems appropriate. The following provisions are applicable to Stock Units:



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     (a) Crediting of Units. Each Stock Unit shall represent the right of the Grantee to
receive an amount based on the value of a share of Company Stock, if specified conditions are met.
All Stock Units shall be credited to bookkeeping accounts established on the Company’s records for
purposes of the Plan.



     (b) Terms of Stock Units. The Committee may grant Stock Units that are payable if
specified performance goals or other conditions are met, or under other circumstances. Stock Units
may be paid at the end of a specified performance period or other period, or payment may be
deferred to a date authorized by the Committee. The Committee shall determine the number of Stock
Units to be granted and the requirements applicable to such Stock Units.



     (c) Requirement of Employment or Service. Unless the Committee determines otherwise,
if the Grantee ceases to be employed by, or provide service to, the Employer during a specified
period, or if other conditions established by the Committee are not met, the Grantee’s Stock Units
shall be forfeited. The Committee may, however, provide for complete or partial exceptions to this
requirement as it deems appropriate.



     (d) Payment With Respect to Stock Units. Payments with respect to Stock Units may be
made in cash, in Company Stock, or in a combination of the two, as determined by the Committee.



SECTION 8 Other Equity Awards




     The Committee may grant Other Equity Awards, which are awards (other than those described in
Sections 5, 6 and 7 of the Plan) that are based on, measured by or payable in Company Stock,
including, without limitation, stock appreciation rights, to any Employee, Non-Employee Director or
Key Advisor, on such terms and conditions as the Committee shall determine. Other Equity Awards
may be awarded subject to the achievement of performance goals or other conditions and may be
payable in cash, Company Stock or any combination of the foregoing, as the Committee shall
determine.



SECTION 9 Withholding of Taxes




     (a) Required Withholding. All Grants under the Plan shall be subject to applicable
federal (including FICA), state and local tax withholding requirements. The Employer may require
that the Grantee or other person receiving or exercising Grants pay to the Employer the amount of
any federal, state or local taxes that the Employer is required to withhold with respect to such
Grants, or the Employer may deduct from other wages paid by the Employer the amount of any
withholding taxes due with respect to such Grants.



     (b) Election to Withhold Shares. If the Committee so permits, a Grantee may elect to
satisfy the Employer’s tax withholding obligation with respect to Grants paid in Company Stock by
having shares withheld up to an amount that does not exceed the minimum applicable withholding tax
rate for federal (including FICA), state and local tax liabilities. The election must be in a form
and manner prescribed by the Committee and may be subject to the prior approval of the Committee.



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SECTION 10 Transferability of Grants




     (a) Nontransferability of Grants. Except as provided below, only the Grantee may
exercise rights under a Grant during the Grantee’s lifetime. A Grantee may not transfer those
rights except (i) by will or by the laws of descent and distribution or (ii) with respect to Grants
other than Incentive Stock Options, if permitted in any specific case by the Committee, pursuant to
a domestic relations order or otherwise as permitted by the Committee. When a Grantee dies, the
personal representative or other person entitled to succeed to the rights of the Grantee may
exercise such rights. Any such successor must furnish proof satisfactory to the Company of his or
her right to receive the Grant under the Grantee’s will or under the applicable laws of descent and
distribution.



     (b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the
Committee may provide, in a Grant Instrument, that a Grantee may transfer Nonqualified Stock
Options to family members, or one or more trusts or other entities for the benefit of or owned by
family members, consistent with the applicable securities laws, according to such terms as the
Committee may determine; provided that the Grantee receives no consideration for the transfer of an
Option and the transferred Option shall continue to be subject to the same terms and conditions as
were applicable to the Option immediately before the transfer.



SECTION 11 Right of First Refusal; Repurchase Right




     (a) Offer. Prior to a Public Offering, if at any time an individual desires to sell,
encumber, or otherwise dispose of shares of Company Stock that were distributed to him or her under
this Plan and that are transferable, the individual may do so only pursuant to a bona fide written
offer, and the individual shall first offer the shares to the Company by giving the Company written
notice disclosing: (i) the name of the proposed transferee of the Company Stock, (ii) the
certificate number and number of shares of Company Stock proposed to be transferred or encumbered,
(iii) the proposed price, (iv) all other terms of the proposed transfer, and (v) a written copy of
the proposed offer. Within 60 days after receipt of such notice, the Company shall have the option
to purchase all or part of such Company Stock at the price and on the terms described in the
written notice; provided that the Company may pay such price in installments over a period not to
exceed four years, at the discretion of the Committee.



     (b) Sale. In the event the Company (or a shareholder, as described below) does not
exercise the option to purchase Company Stock, as provided above, the individual shall have the
right to sell, encumber, or otherwise dispose of the shares of Company Stock described in
subsection (a) at the price and on the terms of the transfer set forth in the written notice to the
Company, provided such transfer is effected within 15 days after the expiration of the option
period. If the transfer is not effected within such period, the Company must again be given an
option to purchase, as provided above.



     (c) Assignment of Rights. The Board, in its sole discretion, may waive the Company’s
right of first refusal and repurchase right under this Section 11. If the Company’s right of first
refusal or repurchase right is so waived, the Board may, in its sole discretion, assign such right
to the remaining shareholders of the Company in the same proportion that each shareholder’s stock
ownership bears to the stock ownership of all the shareholders of the



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Company, as determined by the Board. To the extent that a shareholder has been given such
right and does not purchase his or her allotment, the other shareholders shall have the right to
purchase such allotment on the same basis.




     (d) Purchase by the Company. Prior to a Public Offering, if a Grantee ceases to be
employed by, or provide service to, the Employer, the Company shall have the right to purchase all
or part of any Company Stock distributed to the Grantee under this Plan at its then current Fair
Market Value (as defined in Section 5(b)) or at such other price as may be established in the Grant
Instrument; provided, however, that such repurchase shall be made in accordance with applicable
accounting rules to avoid adverse accounting treatment.



     (e) Public Offering. On and after a Public Offering, the Company shall have no
further right to purchase shares of Company Stock under this Section 11.



     (f) Shareholder’s Agreement. Notwithstanding the provisions of this Section 11, if
the Committee requires that a Grantee execute a shareholder’s agreement with respect to any Company
Stock distributed pursuant to this Plan, which contains a right of first refusal or repurchase
right, the provisions of this Section 11 shall not apply to such Company Stock, unless the
Committee determines otherwise.



SECTION 12 Change of Control of the Company




     (a) Change of Control. As used herein, a “Change of Control” shall be deemed to have
occurred if:



          (i) Any “person,” as such term is used in sections 13(d) and 14(d) of Securities Exchange Act
of 1934, as amended (the “Exchange Act”) (other than a person who is a shareholder of the Company
on the effective date of the Plan) becomes a “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of
the voting power of the then outstanding securities of the Company; provided that a Change of
Control shall not be deemed to occur as a result of a transaction in which the Company becomes a
subsidiary of another corporation and in which the shareholders of the Company, immediately prior
to the transaction, will beneficially own, immediately after the transaction, shares entitling such
shareholders to more than 50% of all votes to which all shareholders of the parent corporation
would be entitled in the election of directors; or




          (ii) The consummation of (i) a merger or consolidation of the Company with another corporation
where the shareholders of the Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation, shares entitling such shareholders
to more than 50% of all votes to which all shareholders of the surviving corporation would be
entitled in the election of directors, (ii) a sale or other disposition of all or substantially all
of the assets of the Company, or (iii) a liquidation or dissolution of the Company.




     (b) Other Definitions. The Committee may modify the definition of Change of Control
for a particular Grant as the Committee deems appropriate to comply with Section 409A of the Code
or otherwise.



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SECTION 13 Consequences of a Change of Control




     In the event of a Change of Control, the Committee may take any of the following actions with
respect to any or all outstanding Grants: the Committee may (i) determine that outstanding Options
shall accelerate and become exercisable, in whole or in part, upon the Change of Control or upon
such other event as the Committee determines, (ii) determine that the restrictions and conditions
on outstanding Stock Awards shall lapse, in whole or in part, upon the Change of Control upon such
other event as the Committee determines, (iii) determine that Grantees holding Stock Units and
Other Equity Awards shall receive one or more payments in settlement of such Stock Units and Other
Equity Awards in an amount and on terms determined by the Committee, (iv) determine that all
outstanding Options that are not exercised shall be assumed by, or replaced with comparable options
by the surviving corporation (or a parent or subsidiary of the surviving corporation), and other
outstanding Grants that remain in effect after the Change of Control shall be converted to similar
grants of the surviving corporation (or a parent or subsidiary of the surviving corporation), (vi)
require that Grantees surrender their outstanding Options in exchange for one or more payments, in
cash or Company Stock as determined by the Committee, in an amount equal to the amount by which the
then Fair Market Value of the shares of Company Stock subject to the Grantee’s unexercised Options
exceeds the Exercise Price of the Options, if any, and on such terms as the Committee determines,
or (vii) after giving Grantees an opportunity to exercise their outstanding Options, terminate any
or all unexercised Options at such time as the Committee deems appropriate. Such surrender,
termination or settlement shall take place as of the date of the Change of Control or such other
date as the Committee may specify. The Committee shall have no obligation to take any of the
foregoing actions, and, in the absence of any such actions, outstanding Grants shall continue in
effect according to their terms.



SECTION 14 Limitations on Issuance or Transfer of Shares




     (a) Shareholder’s Agreement. The Committee may require that a Grantee execute a
shareholder’s agreement, with such terms as the Committee deems appropriate, with respect to any
Company Stock issued or distributed pursuant to this Plan.



     (b) Limitations on Issuance or Transfer of Shares. No Company Stock shall be issued
or transferred in connection with any Grant hereunder unless and until all legal requirements
applicable to the issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition any Grant made to
any Grantee hereunder on such Grantee’s undertaking in writing to comply with such restrictions on
his or her subsequent disposition of such shares of Company Stock as the Committee shall deem
necessary or advisable, and certificates representing such shares may be legended to reflect any
such restrictions. Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop-transfer orders and other restrictions as may be required by
applicable laws, regulations and interpretations, including any requirement that a legend be placed
thereon.



     (c) Lock-Up Period. If so requested by the Company or any representative of the
underwriters (the “Managing Underwriter”) in connection with any underwritten offering of
securities of the Company under the Securities Act of 1933, as amended (the “Securities Act”), a



11









 




Grantee (including any successor or assigns) shall not sell or otherwise transfer any shares
or other securities of the Company during the 30-day period preceding and the 180-day period
following the effective date of a registration statement of the Company filed under the Securities
Act for such underwriting (or such shorter period as may be requested by the Managing Underwriter
and agreed to by the Company) (the “Market Standoff Period”). The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions until the end of such
Market Standoff Period.




SECTION 15 Amendment and Termination of the Plan




     (a) Amendment. The Board may amend or terminate the Plan at any time; provided,
however, that the Board shall not amend the Plan without shareholder approval if such approval is
required in order to comply with the Code or to comply with applicable stock exchange requirements.



     (b) Termination of Plan. The Plan shall terminate on the day immediately preceding
the tenth anniversary of its effective date, unless the Plan is terminated earlier by the Board or
is extended by the Board with the approval of the shareholders.



     (c) Termination and Amendment of Outstanding Grants. A termination or amendment of
the Plan that occurs after a Grant is made shall not materially impair the rights of a Grantee
unless the Grantee consents or unless the Committee acts under Section 20(b). The termination of
the Plan shall not impair the power and authority of the Committee with respect to an outstanding
Grant. Whether or not the Plan has terminated, an outstanding Grant may be terminated or amended
under Section 20(b) or may be amended by agreement of the Company and the Grantee consistent with
the Plan.



     (d) Governing Document. The Plan shall be the controlling document. No other
statements, representations, explanatory materials or examples, oral or written, may amend the Plan
in any manner. The Plan shall be binding upon and enforceable against the Company and its
successors and assigns.



SECTION 16 Funding of the Plan




     This Plan shall be unfunded. The Company shall not be required to establish any special or
separate fund or to make any other segregation of assets to assure the payment of any Grants under
this Plan.



SECTION 17 Rights of Participants




     Nothing in this Plan shall entitle any Employee, Key Advisor, Non-Employee Director or other
person to any claim or right to be granted a Grant under this Plan. Neither this Plan nor any
action taken hereunder shall be construed as giving any individual any rights to be retained by or
in the employ of the Employer or any other employment rights.



12









 





SECTION 18 No Fractional Shares




     No fractional shares of Company Stock shall be issued or delivered pursuant to the Plan or any
Grant. The Committee shall determine whether cash, other awards or other property shall be issued
or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.



SECTION 19 Effective Date of the Plan




     (a) Effective Date. The Plan was originally effective July 19, 2005, and first
amended and restated effective as of August 31, 2006. The Plan as amended and restated herein is
effective as of November 15, 2007.



     (b) Public Offering. The provisions of the Plan that refer to a Public Offering shall
be effective, if at all, upon the initial registration of the Company Stock under section 12(g) of
the Exchange Act, and shall remain effective thereafter for so long as such stock is so registered.



SECTION 20 Miscellaneous




     (a) Grants in Connection with Corporate Transactions and Otherwise. Nothing contained
in this Plan shall be construed to (i) limit the right of the Committee to make Grants under this
Plan in connection with the acquisition, by purchase, lease, merger, consolidation or otherwise, of
the business or assets of any corporation, firm or association, including Grants to employees
thereof who become Employees, or for other proper corporate purposes, or (ii) limit the right of
the Company to grant stock options or make other awards outside of this Plan. Without limiting the
foregoing, the Committee may make a Grant to an employee, director or advisor of another
corporation who becomes an Employee, Non-Employee Director or Key Advisor by reason of a corporate
merger, consolidation, acquisition of stock or property, reorganization or liquidation involving
the Company, the parent or any of their subsidiaries in substitution for a stock option or stock
awards grant made by such corporation. The terms and conditions of the substitute grants may vary
from the terms and conditions required by the Plan and from those of the substituted stock
incentives. The Committee shall prescribe the provisions of the substitute grants.



     (b) Compliance with Law. The Plan, the exercise of Options and the obligations of the
Company to issue or transfer shares of Company Stock under Grants shall be subject to all
applicable laws and to approvals by any governmental or regulatory agency as may be required.
After a Public Offering of the Company’s Stock, it is the intent of the Company that the Plan and
all transactions under the Plan comply with all applicable provisions of Rule 16b-3 or its
successors under the Exchange Act and section 162(m) of the Code. In addition, it is the intent of
the Company that the Plan and Incentive Stock Options granted under the Plan comply with the
applicable provisions of section 422 of the Code and that, to the extent applicable, Grants made
under the Plan comply with the requirements of section 409A of the Code and the regulations
thereunder. To the extent that any legal requirement as set forth in the Plan ceases to be
required under applicable law, the Committee may determine that such Plan provision shall cease to
apply. The Committee may revoke any Grant if it is contrary to law or modify a Grant



13









 




or the Plan to bring a Grant of the Plan into compliance with any applicable law or
regulation. The Committee may agree to limit its authority under this Section.




     (c) Employees Subject to Taxation Outside the United States. With respect to Grantees
who are subject to taxation in countries other than the United States, the Committee may make
Grants on such terms and conditions as the Committee deems appropriate to comply with the laws of
the applicable countries, and the Committee may create such procedures, addenda and subplans and
make such modifications as may be necessary or advisable to comply with such laws.



     (d) Governing Law. The validity, construction, interpretation and effect of the Plan
and Grant Instruments issued under the Plan shall be governed and construed by and determined in
accordance with the laws of the State of Delaware without giving effect to the conflict of laws
provisions thereof.




14











 





AMENDMENT 2008-1

TO THE

NUPATHE INC. 2005 EQUITY COMPENSATION PLAN




     WHEREAS, NuPathe Inc., a Delaware corporation (the “Company”) maintains the NuPathe, Inc. 2005
Equity Compensation Plan (the “Plan”) for the benefit of its eligible employees, non-employee
members of the Board and consultants and advisors who perform services for the Company;



     WHEREAS, the Board of Directors and stockholders of the Company desire to amend the Plan to
increase the number of shares of Common Stock authorized to be issued or transferred under the Plan
by 5,000,000 shares so that a total of 8,800,000 shares may be issued or transferred under the
Plan; and



     WHEREAS, the Board may amend the Plan at any time pursuant to and in accordance with Section
15(a) of the Plan.



     NOW, THEREFORE, in accordance with the foregoing, effective as of July 8, 2008, the Plan shall
be amended as follows:



     The first sentence of Section 3(a) of the Plan is hereby amended in its entirety to read as
follows:




“(a) Subject to adjustment as described below, the aggregate number of shares of common
stock of the Company (“Company Stock”) that may be issued or transferred under the Plan is
8,800,000 shares.”



[Signature Page Follows]






 









 








     IN WITNESS WHEREOF, and as evidence of the adoption of Amendment 2008-1 set forth herein, the
Board has caused this Amendment 2008-1 to be executed this 8th day of July, 2008.



	 	 	 	 	 
	 	NUPATHE INC.

 	 
	 	By:  	/s/ Jane H. Hollingsworth
 	 
	 	 	Name:  	Jane H. Hollingsworth 	 
	 	 	Title:  	Chief Executive Officer 	 
	 




 











 







CONFIDENTIAL




12/10/2008




NUPATHE INC.




2005 EQUITY COMPENSATION PLAN



INCENTIVE STOCK OPTION GRANT



     This STOCK OPTION GRANT, dated as of                                         , (the “Date of Grant”), is delivered by
NuPathe Inc. (the “Company”) to                                          (the “Grantee”).



RECITALS




     A. The NuPathe Inc. 2005 Equity Compensation Plan (the “Plan”) as amended July 8, 2008
provides for the grant of options to purchase shares of common stock of the Company. The Board of
Directors of the Company (the “Board”) has decided to make a stock option grant as an inducement
for the Grantee to promote the best interests of the Company and its shareholders. A copy of the
Plan is attached.



     B. The Board is authorized to appoint a committee to administer the Plan. If a committee is
appointed, all references in this Agreement to the “Board” shall be deemed to refer to the
committee.



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


1. Grant of Option.




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



     (b) The Option is designated as an incentive stock option, as described in Paragraph 5 below.
However, if and to the extent the Option exceeds the limits for an incentive stock option, as
described in Paragraph 5, the Option shall be a nonqualified stock option.


2. Exercisability of Option. The Option shall become exercisable on the following dates,
if the Grantee is employed by, or providing service to, the Employer (as defined in the Plan) on
the applicable date:




 









 








	 	 	 
	Date	 	Shares for Which the Option is Exercisable
	 
	 	 
	 
	 	 
	 


	 	 
 
	 
	 	 
	 


	 	 
 
	 
	 	 
	 


	 	 
 
	 
	 	 
	 


	 	 
 





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



Notwithstanding any provision of this Agreement to the contrary, if a Change of Control occurs,
while the Grantee is employed by or providing service to the Company, any Shares subject to the
Option that have not yet become vested and exercisable shall automatically accelerate and become
fully vested and exercisable as of the date of the Change of Control.



3. Term of Option.




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



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




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




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




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




     (iv) The date on which the Grantee ceases to be employed by, or provide service to, the
Employer for Cause. In addition, notwithstanding the prior provisions of this Paragraph 3,
if the Grantee engages in conduct that constitutes Cause after the Grantee’s employment or
service terminates, the Option shall immediately terminate.


Notwithstanding the foregoing, in no event may the Option be exercised after the date that is
immediately before the tenth anniversary of the Date of Grant. Any portion of the Option that is






-2-









 







not exercisable at the time the Grantee ceases to be employed by, or provide service to, the
Employer shall immediately terminate.



4. Exercise Procedures.




     (a) Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may exercise part or
all of the exercisable Option by giving the Company written notice of intent to exercise in the
manner provided in this Agreement, specifying the number of Shares as to which the Option is to be
exercised and the method of payment. Payment of the exercise price shall be made in accordance
with procedures established by the Board from time to time based on type of payment being made but,
in any event, prior to issuance of the Shares. The Grantee shall pay the exercise price (i) in
cash, (ii) with the approval of the Board, by delivering Shares of the Company, which shall be
valued at their fair market value on the date of delivery, or by attestation (on a form prescribed
by the Board) to ownership of Shares having a fair market value on the date of exercise equal to
the exercise price, (iii) after a public offering of the Company’s stock, by payment through a
broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board or (iv)
by such other method as the Board may approve. The Board may impose from time to time such
limitations as it deems appropriate on the use of Shares of the Company to exercise the Option.



     (b) The obligation of the Company to deliver Shares upon exercise of the Option shall be
subject to all applicable laws, rules, and regulations and such approvals by governmental agencies
as may be deemed appropriate by the Board, including such actions as Company counsel shall deem
necessary or appropriate to comply with relevant securities laws and regulations. The Company may
require that the Grantee (or other person exercising the Option after the Grantee’s death)
represent that the Grantee is purchasing Shares for the Grantee’s own account and not with a view
to or for sale in connection with any distribution of the Shares, or such other representation as
the Board deems appropriate.



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


5. Designation as Incentive Stock Option.




     (a) This Option is designated an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”). If the aggregate fair market value of the stock on
the date of the grant with respect to which incentive stock options are exercisable for the first
time by the Grantee during any calendar year, under the Plan or any other stock option plan of the
Company or a parent or subsidiary, exceeds $100,000, then the Option, as to the excess, shall be
treated as a nonqualified stock option that does not meet the requirements of Section 422. If and
to the extent that the Option fails to qualify as an incentive stock option under the Code, the
Option shall remain outstanding according to its terms as a nonqualified stock option.



-3-









 





     (b) The Grantee understands that favorable incentive stock option tax treatment is available
only if the Option is exercised while the Grantee is an employee of the Company or a parent or
subsidiary of the Company or within a period of time specified in the Code after the Grantee ceases
to be an employee. The Grantee understands that the Grantee is responsible for the income tax
consequences of the Option, and, among other tax consequences, the Grantee understands that he or
she may be subject to the alternative minimum tax under the Code in the year in which the Option is
exercised. The Grantee will consult with his or her tax adviser regarding the tax consequences of
the Option.



     (c) The Grantee agrees that the Grantee shall immediately notify the Company in writing if the
Grantee sells or otherwise disposes of any Shares acquired upon the exercise of the Option and such
sale or other disposition occurs on or before the later of (i) two years after the Date of Grant or
(ii) one year after the exercise of the Option. The Grantee also agrees to provide the Company
with any information requested by the Company with respect to such sale or other disposition.


6. Change of Control. Except as otherwise provided in Section 2 above, the provisions of
the Plan applicable to a Change of Control shall apply to the Option, and, in the event of a Change
of Control, the Board may take such actions as it deems appropriate pursuant to the Plan.



7. Right of First Refusal; Repurchase Right; Shareholder’s Agreement. As a condition of
receiving this Option, the Grantee hereby agrees that all Shares issued under the Plan shall be
subject to a right of first refusal and repurchase right as described in the Plan, and the Board
may require that the Grantee (or other person exercising the Option) execute a shareholder’s
agreement, in such form as the Board determines, with respect to all Shares issued upon the
exercise of the Option before a public offering of the Company’s stock.



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



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



10. No Employment or Other Rights. The grant of the Option shall not confer upon the
Grantee any right to be retained by or in the employ or service of the Employer and shall not
interfere in any way with the right of the Employer to terminate the Grantee’s employment or






-4-









 







service at any time. The right of the Employer to terminate at will the Grantee’s employment or
service at any time for any reason is specifically reserved.







-5-









 







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



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



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



14. Notice. Any notice to the Company provided for in this instrument shall be addressed
to the Company in care of the President at 1249 Hazelwood Drive, Fort Washington, PA 19034, and
any notice to the Grantee shall be addressed to such Grantee at the current address shown on the
payroll of the Employer, or to such other address as the Grantee may designate to the Employer in
writing. Any notice shall be delivered by hand, sent by telecopy or enclosed in a properly sealed
envelope addressed as stated above, registered and deposited, postage prepaid, in a post office
regularly maintained by the United States Postal Service.




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



	 	 	 	 	 	 	 

	 	 	NUPATHE INC.	 	 
	 
	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 


	 	 	 

	 	 






-6-









 





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



Grantee:
                                                       
             




Date:
                                                       

                  






-7-











 

 




Confidential



12/10/2008




NUPATHE INC.




2005 EQUITY COMPENSATION PLAN



NONQUALIFIED STOCK OPTION GRANT



     This STOCK OPTION GRANT, dated as of                      (the “Date of Grant”), is delivered by
NuPathe Inc. (the “Company”) to                      (the “Grantee”).



RECITALS




     A. The NuPathe Inc. 2005 Equity Compensation Plan, as amended effective July 8, 2008 (the
“Plan”) provides for the grant of options to purchase shares of common stock of the Company. The
Board of Directors of the Company (the “Board”) has decided to make a stock option grant as an
inducement for the Grantee to promote the best interests of the Company and its shareholders. A
copy of the Plan is attached.



     B. The Board is authorized to appoint a committee to administer the Plan. If a committee is
appointed, all references in this Agreement to the “Board” shall be deemed to refer to the
committee.



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



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




2. Exercisability of Option. The Option shall become exercisable on the following dates,
if the Grantee is employed by, or providing service to, the Employer (as defined in the Plan) on
the applicable date:




	 	 	 	 	 	 	 	 	 
	Date	 	 	 	Shares for Which the Option is Exercisable
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 
	 	 


	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 


	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 


	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 








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




 









 








Notwithstanding any provision of this Agreement to the contrary, if a Change of Control occurs,
while the Grantee is employed by or providing service to the Company, any Shares subject to the
Option that have not yet become vested and exercisable shall automatically accelerate and become
fully vested and exercisable as of the date of the Change of Control.




3. Term of Option.




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



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




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




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




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




     (iv) The date on which the Grantee ceases to be employed by, or provide service to, the
Employer for Cause. In addition, notwithstanding the prior provisions of this Paragraph 3,
if the Grantee engages in conduct that constitutes Cause after the Grantee’s employment or
service terminates, the Option shall immediately terminate.



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




4. Exercise Procedures.




     (a) Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may exercise part or
all of the exercisable Option by giving the Company written notice of intent to exercise in the
manner provided in this Agreement, specifying the number of Shares as to which the Option is to be
exercised and the method of payment. Payment of the exercise price shall be made in accordance
with procedures established by the Board from time to time based on type of payment being made but,
in any event, prior to issuance of the Shares. The Grantee shall pay the exercise price (i) in
cash, (ii) with the approval of the Board, by delivering Shares of the Company, which shall be
valued at their fair market value on the date of delivery, or by attestation (on a form prescribed
by the Board) to ownership of Shares having a fair market value



-2-









 





on the date of exercise equal to the exercise price, (iii) after a public offering of the
Company’s stock, by payment through a broker in accordance with procedures permitted by Regulation
T of the Federal Reserve Board or (iv) by such other method as the Board may approve. The Board
may impose from time to time such limitations as it deems appropriate on the use of Shares of the
Company to exercise the Option.




     (b) The obligation of the Company to deliver Shares upon exercise of the Option shall be
subject to all applicable laws, rules, and regulations and such approvals by governmental agencies
as may be deemed appropriate by the Board, including such actions as Company counsel shall deem
necessary or appropriate to comply with relevant securities laws and regulations. The Company may
require that the Grantee (or other person exercising the Option after the Grantee’s death)
represent that the Grantee is purchasing Shares for the Grantee’s own account and not with a view
to or for sale in connection with any distribution of the Shares, or such other representation as
the Board deems appropriate.



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



5. Change of Control. Except as otherwise provided in Section 2 above, the provisions of
the Plan applicable to a Change of Control shall apply to the Option, and, in the event of a Change
of Control, the Board may take such actions as it deems appropriate pursuant to the Plan.




6. Right of First Refusal; Repurchase Right; Shareholder’s Agreement. As a condition of
receiving this Option, the Grantee hereby agrees that all Shares issued under the Plan shall be
subject to a right of first refusal and repurchase right as described in the Plan, and the Board
may require that the Grantee (or other person exercising the Option) execute a shareholder’s
agreement, in such form as the Board determines, with respect to all Shares issued upon the
exercise of the Option before a public offering of the Company’s stock.




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




8. Grant Subject to Plan Provisions. This grant is made pursuant to the Plan, the terms of
which are incorporated herein by reference, and in all respects shall be interpreted in accordance
with the Plan. The grant and exercise of the Option are subject to interpretations, regulations
and determinations concerning the Plan established from time to time by the Board in accordance
with the provisions of the Plan, including, but not limited to, provisions pertaining to (i) rights
and obligations with respect to withholding taxes, (ii) the registration, qualification or listing
of the Shares, (iii) changes in capitalization of the Company and (iv) other requirements of




-3-









 








applicable law. The Board shall have the authority to interpret and construe the Option pursuant
to the terms of the Plan, and its decisions shall be conclusive as to any questions arising
hereunder.




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




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




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




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




13. Notice. Any notice to the Company provided for in this instrument shall be addressed
to the Company in care of the President at 227 Washington Street, Suite 200, Conshohocken, PA
19428 and any notice to the Grantee shall be addressed to such Grantee at the current address shown
on the payroll of the Employer, or to such other address as the Grantee may designate to the
Employer in writing. Any notice shall be delivered by hand, sent by telecopy or enclosed in a
properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a
post office regularly maintained by the United States Postal Service.




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



	 	 	 	 	 	 	 	 	 

	 	 	 	 	NUPATHE INC.	 	 
	Attest:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By: 	 	 	 	 
	 


	 	 
	 	 	 

	 






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




	 	 	 	 	 	 	 

	 

	 	Grantee: 	 	 	 	 
	 

	 	 	 

	 	 






	 	 	 	 	 	 	 

	 

	 	Date: 	 	 	 	 
	 

	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	Date of Option:	 	 
	 	 	Option Amount:	 	 
	 	 	Option Price:	 	 







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6/22/2005




NUPATHE INC.



2005 EQUITY COMPENSATION PLAN



RESTRICTED STOCK GRANT



     This RESTRICTED STOCK GRANT, dated as of                     (the “Date of Grant”), is delivered by
NuPathe Inc. (the “Company”), to                      (the “Grantee”).



RECITALS




     A. The NuPathe Inc. 2005 Equity Compensation Plan (the “Plan”) provides for the grant of
restricted stock in accordance with the terms and conditions of the Plan. The Board of Directors
of the Company (the “Board”) has decided to make a restricted stock grant as an inducement for the
Grantee to promote the best interests of the Company and its shareholders. A copy of the Plan is
attached.



     B. The Board is authorized to appoint a committee to administer the Plan. If a committee is
appointed, all references in this Agreement to the “Board” shall be deemed to refer to the
committee.



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


1. Restricted Stock Grant. Subject to the terms and conditions set forth in this Agreement
and the Plan, the Company hereby grants the Grantee
                     shares of common stock of the Company,
subject to the restrictions set forth below and in the Plan (“Restricted Stock”) and acknowledges
payment by the Grantee of
$                    
($___  per share) for the Restricted Stock. Shares of
Restricted Stock may not be transferred by the Grantee or subjected to any security interest until
the shares have become vested pursuant to this Agreement and the Plan.



2. Vesting and Nonassignability of Restricted Stock.




     (a) The shares of Restricted Stock shall become vested, and the restrictions described in
Sections 2(b) and 2(c) shall lapse, according to the following vesting schedule, if the Grantee
continues to be employed by, or provide service to, of the Employer (as defined in the Plan) from
the Date of Grant until the applicable vesting date:



	 	 	 	 	 	 	 	 	 
	Vesting Date	 	 	 	Vested Shares
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 





 









 





The vesting of the Restricted Stock shall be cumulative, but shall not exceed 100% of the Shares.
If the foregoing schedule would produce fractional Shares, the number of Shares that vest shall be
rounded down to the nearest whole Share.




     (b) If the Grantee’s employment or service with the Employer terminates for any reason before
the Restricted Stock is fully vested, the shares of Restricted Stock that are not then vested shall
be forfeited and must be immediately returned to the Company, and the Company shall pay to the
Grantee, as consideration for the return of the non-vested shares,
the lesser of $                     per share
or the Fair Market Value (as defined in the Plan) of a share on the date of the forfeiture, for
each returned share.



     (c) During the period before the shares of Restricted Stock vest (the “Restriction Period”),
the non-vested Restricted Stock may not be assigned, transferred, pledged or otherwise disposed of
by the Grantee. Any attempt to assign, transfer, pledge or otherwise dispose of the shares
contrary to the provisions hereof, and the levy of any execution, attachment or similar process
upon the shares, shall be null, void and without effect.


3. Issuance of Certificates.




     (a) Stock certificates representing the Restricted Stock may be issued by the Company and held
in escrow by the Company until the Restricted Stock vests, or the Company may hold non-certificated
shares until the Restricted Stock vests. During the Restriction Period, the Grantee shall receive
any cash dividends with respect to the shares of Restricted Stock, may vote the shares of
Restricted Stock and may participate in any distribution pursuant to a plan of dissolution or
complete liquidation of the Company. In the event of a dividend or distribution payable in stock
or other property or a reclassification, split up or similar event during the Restriction Period,
the shares or other property issued or declared with respect to the non-vested shares of Restricted
Stock shall be subject to the same terms and conditions relating to vesting as the shares to which
they relate.



     (b) When the Grantee obtains a vested right to shares of Restricted Stock, a certificate
representing the vested shares shall be issued to the Grantee, free of the restrictions under
Section 2 of this Agreement.



     (c) The obligation of the Company to deliver shares upon the vesting of the Restricted Stock
shall be subject to all applicable laws, rules, and regulations and such approvals by governmental
agencies as may be deemed appropriately to comply with relevant securities laws and regulations.


4. Change of Control. The provisions of the Plan applicable to a Change of Control shall
apply to the Restricted Stock, and, in the event of a Change of Control, the Board may take such
actions as it deems appropriate pursuant to the Plan.



5. Right of First Refusal; Repurchase Right; Shareholder’s Agreement. As a condition of
receiving this grant, the Grantee hereby agrees that (i) after the restrictions described in
Section 2 of this Agreement lapse with respect to all or part of the shares, the shares that are no
longer subject to such restrictions shall be subject to a right of first refusal and repurchase
right as described in the Plan, and (ii) the Board may require that the Grantee execute a
shareholder’s






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agreement, in such form as the Board determines, with respect to the shares issued under the Plan.



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



7. Withholding. The Grantee shall be required to pay to the Company, or make other
arrangements satisfactory to the Company to provide for the payment of, any federal, state, local
or other taxes that the Employer is required to withhold with respect to the grant or vesting of
the Restricted Stock. Subject to Board approval, the Grantee may elect to satisfy any tax
withholding obligation of the Employer with respect to the Restricted Stock by having shares
withheld up to an amount that does not exceed the minimum applicable withholding tax rate for
federal (including FICA), state, local and other tax liabilities.



8. Other Restrictions on Sale or Transfer of Shares.




     (a) The Grantee is acquiring the shares underlying this grant solely for investment purposes,
with no present intention of distributing or reselling any of the shares or any interest therein.
The Grantee acknowledges that the shares have not been registered under the Securities Act of 1933,
as amended (the “Securities Act”).



     (b) The Grantee is aware of the applicable limitations under the Securities Act and under the
Plan relating to a subsequent sale, transfer, pledge or other assignment or encumbrance of the
shares. The Grantee further acknowledges that the shares must be held indefinitely unless they are
subsequently registered under the Securities Act and applicable state securities laws or an
exemption from such registration is available.



     (c) The Grantee will not sell, transfer, pledge, donate, assign, mortgage, hypothecate or
otherwise encumber the shares underlying this grant unless the shares are registered under the
Securities Act or the Company is given an opinion of counsel reasonably acceptable to the Company
that such registration is not required under the Securities Act.



     (d) The Grantee realizes that there is no public market for the shares underlying this grant,
that no market may ever develop for them, and that they have not been approved or disapproved by
the Securities and Exchange Commission or any governmental agency.


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







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10. Assignment by Company. The rights and protections of the Company hereunder shall
extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and
affiliates. This Agreement may be assigned by the Company without the Grantee’s consent.



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



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




     IN WITNESS WHEREOF, the Company has caused its duly authorized officers to execute and attest
this instrument, and the Grantee has placed his or her signature hereon, effective as of the Date
of Grant.



	 	 	 	 	 	 	 	 	 	 	 

	Attest:	 	 	 	NUPATHE INC.
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 	 	 
	 


	 	 
	 	 	 	 

	 	 	 	 





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




	 	 	 	 	 

	 
	 	 	 	 
	 

	 	 

Grantee
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

Date
	 	 







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