EX-10.3



 Exhibit 10.3 

TOBIRA THERAPEUTICS, INC. 

2010 STOCK PLAN 

ADOPTED ON FEBRUARY 25, 2010 







 TABLE OF CONTENTS 

 
  

							
	 	  	 	  	Page	 
	 SECTION 1.
	  	ESTABLISHMENT AND PURPOSE	  	 	1	  
			
	 SECTION 2.
	  	ADMINISTRATION	  	 	1	  
	 (a)
	  	Committees of the Board of Directors	  	 	1	  
	 (b)
	  	Authority of the Board of Directors	  	 	1	  
			
	 SECTION 3.
	  	ELIGIBILITY	  	 	1	  
	 (a)
	  	General Rule	  	 	1	  
	 (b)
	  	Ten-Percent Stockholders	  	 	1	  
			
	 SECTION 4.
	  	STOCK SUBJECT TO PLAN	  	 	2	  
	 (a)
	  	Basic Limitation	  	 	2	  
	 (b)
	  	Additional Shares	  	 	2	  
			
	 SECTION 5.
	  	TERMS AND CONDITIONS OF AWARDS OR SALES	  	 	2	  
	 (a)
	  	Stock Grant or Purchase Agreement	  	 	2	  
	 (b)
	  	Duration of Offers and Nontransferability of Rights	  	 	2	  
	 (c)
	  	Purchase Price	  	 	2	  
	 (d)
	  	Withholding Taxes	  	 	2	  
	 (e)
	  	Transfer Restrictions and Forfeiture Conditions	  	 	3	  
			
	 SECTION 6.
	  	TERMS AND CONDITIONS OF OPTIONS	  	 	3	  
	 (a)
	  	Stock Option Agreement	  	 	3	  
	 (b)
	  	Number of Shares	  	 	3	  
	 (c)
	  	Exercise Price	  	 	3	  
	 (d)
	  	Exercisability	  	 	3	  
	 (e)
	  	Basic Term	  	 	3	  
	 (f)
	  	Termination of Service (Except by Death)	  	 	4	  
	 (g)
	  	Leaves of Absence	  	 	4	  
	 (h)
	  	Death of Optionee	  	 	4	  
	 (i)
	  	Post-Exercise Restrictions on Transfer of Shares	  	 	5	  
	 (j)
	  	Pre-Exercise Restrictions on Transfer of Options or Shares	  	 	5	  
	 (k)
	  	Withholding Taxes	  	 	5	  
	 (l)
	  	No Rights as a Stockholder	  	 	5	  
	 (m)
	  	Modification, Extension and Assumption of Options	  	 	6	  
	 (n)
	  	Company’s Right to Cancel Certain Options	  	 	6	  
			
	 SECTION 7.
	  	PAYMENT FOR SHARES	  	 	6	  
	 (a)
	  	General Rule	  	 	6	  
	 (b)
	  	Services Rendered	  	 	6	  
	 (c)
	  	Promissory Note	  	 	6	  
	 (d)
	  	Surrender of Stock	  	 	6	  
	 (e)
	  	Exercise/Sale	  	 	6	  
	 (f)
	  	Other Forms of Payment	  	 	7	  


  
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	 SECTION 8.
	  	ADJUSTMENT OF SHARES	  	 	7	  
	 (a)
	  	General	  	 	7	  
	 (b)
	  	Mergers and Consolidations	  	 	7	  
	 (c)
	  	Reservation of Rights	  	 	8	  
			
	 SECTION 9.
	  	PRE-EXERCISE INFORMATION REQUIREMENT	  	 	8	  
	 (a)
	  	Application of Requirement	  	 	8	  
	 (b)
	  	Scope of Requirement	  	 	8	  
			
	 SECTION 10.
	  	MISCELLANEOUS PROVISIONS	  	 	8	  
	 (a)
	  	Securities Law Requirements	  	 	8	  
	 (b)
	  	No Retention Rights	  	 	9	  
	 (c)
	  	Treatment as Compensation	  	 	9	  
	 (d)
	  	Governing Law	  	 	9	  
			
	 SECTION 11.
	  	DURATION AND AMENDMENTS	  	 	9	  
	 (a)
	  	Term of the Plan	  	 	9	  
	 (b)
	  	Right to Amend or Terminate the Plan	  	 	9	  
	 (c)
	  	Effect of Amendment or Termination	  	 	9	  
			
	 SECTION 12.
	  	DEFINITIONS	  	 	10	  


  
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 TOBIRA THERAPEUTICS, INC. 2010
STOCK PLAN 
 SECTION 1. ESTABLISHMENT AND PURPOSE. 

The purpose of the Plan is to offer selected persons an opportunity to acquire a proprietary interest in the success of the Company, or to
increase such interest, by acquiring Shares of the Company’s Stock. The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares. Options granted under the Plan may include Nonstatutory Options
as well as ISOs intended to qualify under Section 422 of the Code. 
 Capitalized terms are defined in Section 12. 

SECTION 2. ADMINISTRATION. 
 (a)
Committees of the Board of Directors. The Plan may be administered by one or more Committees. Each Committee shall consist of one or more members of the Board of Directors who have been appointed by the Board of Directors. Each Committee shall
have such authority and be responsible for such functions as the Board of Directors has assigned to it. If no Committee has been appointed, the entire Board of Directors shall administer the Plan. Any reference to the Board of Directors in the Plan
shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function. 
 (b)
Authority of the Board of Directors. Subject to the provisions of the Plan, the Board of Directors shall have full authority and discretion to take any actions it deems necessary or advisable for the administration of the Plan. All decisions,
interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Optionees and all persons deriving their rights from a Purchaser or Optionee. 

SECTION 3. ELIGIBILITY. 
 (a) General
Rule. Only Employees, Outside Directors and Consultants shall be eligible for the grant of Nonstatutory Options or the direct award or sale of Shares. Only Employees shall be eligible for the grant of ISOs. 

(b) Ten-Percent Stockholders. A person who owns more than 10% of the total combined voting power
of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries shall not be eligible for the grant of an ISO unless (i) the Exercise Price is at least 110% of the Fair Market Value of a Share on the Date of Grant and
(ii) such ISO by its terms is not exercisable after the expiration of five years from the Date of Grant. For purposes of this Subsection (b), in determining stock ownership, the attribution rules of Section 424(d) of the Code shall be
applied. 







 SECTION 4. STOCK SUBJECT TO PLAN. 

(a) Basic Limitation. Not more than seven hundred seventy-five thousand three hundred seventy-nine (775,379) Shares may be issued
under the Plan, subject to Subsection (b) below and Section 8(a).1 All of these Shares may be issued upon the exercise of ISOs. The number of Shares that are subject to Options or other
rights outstanding at any time under the Plan shall not exceed the number of Shares that then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to
satisfy the requirements of the Plan. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares. 
 (b)
Additional Shares. In the event that Shares previously issued under the Plan are reacquired by the Company, such Shares shall be added to the number of Shares then available for issuance under the Plan. In the event that Shares that otherwise
would have been issuable under the Plan are withheld by the Company in payment of the Purchase Price, Exercise Price or withholding taxes, such Shares shall remain available for issuance under the Plan. In the event that an outstanding Option or
other right for any reason expires or is canceled, the Shares allocable to the unexercised portion of such Option or other right shall be added to the number of Shares then available for issuance under the Plan. 

SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES. 

(a) Stock Grant or Purchase Agreement. Each award of Shares under the Plan shall be evidenced by a Stock Grant Agreement between the
Grantee and the Company. Each sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company. Such award or sale shall be subject to all applicable terms
and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Grant Agreement or Stock Purchase Agreement. The
provisions of the various Stock Grant Agreements and Stock Purchase Agreements entered into under the Plan need not be identical. 
 (b)
Duration of Offers and Nontransferability of Rights. Any right to purchase Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 30 days after the grant of such right was communicated to
the Purchaser by the Company. Such right shall not be transferable and shall be exercisable only by the Purchaser to whom such right was granted. 

(c) Purchase Price. The Board of Directors shall determine the Purchase Price of Shares to be offered under the Plan at its sole
discretion. The Purchase Price shall be payable in a form described in Section 7. 
 (d) Withholding Taxes. As a condition to the
award, purchase, vesting or transfer of Shares, the Grantee or Purchaser shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in
connection with such event. 
  

	1 	Please refer to Exhibit A for a schedule of the initial share reserve and any subsequent increases in the reserve. 


  
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 (e) Transfer Restrictions and Forfeiture Conditions. Any Shares awarded or sold under the
Plan shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Grant
Agreement or Stock Purchase Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. 
 SECTION 6. TERMS
AND CONDITIONS OF OPTIONS. 
 (a) 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. The Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board
of Directors deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. 

(b) Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide
for the adjustment of such number in accordance with Section 8. The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option. 

(c) Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of an Option shall not be less than
100% of the Fair Market Value of a Share on the Date of Grant, and in the case of an ISO a higher percentage may be required by Section 3(b). Subject to the preceding sentence, the Exercise Price shall be determined by the Board of Directors at
its sole discretion. The Exercise Price shall be payable in a form described in Section 7. This Subsection (c) shall not apply to an Option granted pursuant to an assumption of, or substitution for, another option in a manner that complies
with Section 424(a) of the Code (whether or not the Option is an ISO). 
 (d) Exercisability. Each Stock Option Agreement shall
specify the date when all or any installment of the Option is to become exercisable. No Option shall be exercisable unless the Optionee (i) has delivered an executed copy of the Stock Option Agreement to the Company or (ii) otherwise
agrees to be bound by the terms of the Stock Option Agreement. The Board of Directors shall determine the exercisability provisions of the Stock Option Agreement at its sole discretion. All of an Optionee’s Options shall become exercisable in
full if Section 8(b)(iv) applies. 
 (e) Basic Term. The Stock Option Agreement shall specify the term of the Option. The term
shall not exceed 10 years from the Date of Grant, and in the case of an ISO a shorter term may be required by Section 3(b). Subject to the preceding sentence, the Board of Directors at its sole discretion shall determine when an Option is to
expire. 

  
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 (f) Termination of Service (Except by Death). If an Optionee’s Service terminates for
any reason other than the Optionee’s death, then the Optionee’s Options shall expire on the earliest of the following dates: 

(i) The expiration date determined pursuant to Subsection (e) above; 

(ii) The date three months after the termination of the Optionee’s Service for any reason other than Disability, or such
earlier or later date as the Board of Directors may determine (but in no event earlier than 30 days after the termination of the Optionee’s Service); or 

(iii) The date six months after the termination of the Optionee’s Service by reason of Disability, or such later date as
the Board of Directors may determine. 
 The Optionee may exercise all or part of the Optionee’s Options at any time before the expiration of such
Options under the preceding sentence, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before
the Optionee’s Service terminated (or vested as a result of the termination). The balance of such Options shall lapse when the Optionee’s Service terminates. In the event that the Optionee dies after the termination of the Optionee’s
Service but before the expiration of the Optionee’s Options, all or part of such Options may be exercised (prior to expiration) by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options
directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or became exercisable as a result of the termination) and
the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination). 
 (g) Leaves
of Absence. For purposes of Subsection (f) above, Service shall be deemed to continue while the Optionee is on a bona fide leave of absence, if such leave was approved by the Company in writing and if continued crediting of Service for this
purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company). 
 (h) Death of
Optionee. If an Optionee dies while the Optionee is in Service, then the Optionee’s Options shall expire on the earlier of the following dates: 

(i) The expiration date determined pursuant to Subsection (e) above; or 

(ii) The date 12 months after the Optionee’s death, or such earlier or later date as the Board of Directors may determine
(but in no event earlier than six months after the Optionee’s death). 

  
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 All or part of the Optionee’s Options may be exercised at any time before the expiration of such Options
under the preceding sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that
such Options had become exercisable before the Optionee’s death (or became exercisable as a result of the death) and the underlying Shares had vested before the Optionee’s death (or vested as a result of the Optionee’s death). The
balance of such Options shall lapse when the Optionee dies. 
 (i) Post-Exercise Restrictions on Transfer of Shares. Any Shares issued
upon exercise of an Option shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions shall be set forth in the
applicable Stock Option Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. 
 (j)
Pre-Exercise Restrictions on Transfer of Options or Shares. An Option shall be transferable by the Optionee only by (i) a beneficiary designation, (ii) a will or (iii) the laws of descent and distribution, except as provided in
the next sentence. If the applicable Stock Option Agreement so provides, a Nonstatutory Option shall also be transferable by gift or domestic relations order to a Family Member of the Optionee. An ISO may be exercised during the lifetime of the
Optionee only by the Optionee or by the Optionee’s guardian or legal representative. In addition, an Option shall comply with all conditions of Rule 12h-1(f)(1) under the Exchange Act until the
Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. Such conditions include, without limitation, the transferability restrictions set forth in
Rule 12h-1(f)(1)(iv) and (v) under the Exchange Act, which shall apply to an Option and, prior to exercise, to the Shares to be issued upon exercise of such Option during the period commencing on the
Date of Grant and ending on the earlier of (i) the date when the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or (ii) the date when the Company makes a determination that it
will cease to rely on the exemption afforded by Rule 12h-1(f)(1) under the Exchange Act. During such period, an Option and, prior to exercise, the Shares to be issued upon exercise of such Option shall be
restricted as to any pledge, hypothecation or other transfer by the Optionee, including any short position, any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) or
any “call equivalent position” (as defined in Rule 16a-1(b) under the Exchange Act). 

(k) Withholding Taxes. As a condition to the grant or exercise of an Option, the Optionee shall make such arrangements as the Board of
Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such grant or exercise. The Optionee shall also make such arrangements as the Board of Directors may
require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the vesting or transfer of Shares acquired by exercising an Option or any similar event. 

(l) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder with respect to any
Shares covered by the Optionee’s Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option. 

  
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 (m) Modification, Extension and Assumption of Options. Within the limitations of the Plan,
the Board of Directors may modify, extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or 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. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair the Optionee’s rights or increase the Optionee’s obligations
under such Option. 
 (n) Company’s Right to Cancel Certain Options. Any other provision of the Plan or a Stock Option Agreement
notwithstanding, the Company shall have the right at any time to cancel an Option that was not granted in compliance with Rule 701 under the Securities Act. Prior to canceling such Option, the Company shall give the Optionee not less than 30
days’ notice in writing. If the Company elects to cancel such Option, it shall deliver to the Optionee consideration with an aggregate Fair Market Value equal to the excess of (i) the Fair Market Value of the Shares subject to such Option
as of the time of the cancellation over (ii) the Exercise Price of such Option. The consideration may be delivered in the form of cash or cash equivalents, in the form of Shares, or a combination of both. If the consideration would be a
negative amount, such Option may be cancelled without the delivery of any consideration. 
 SECTION 7. PAYMENT FOR SHARES. 

(a) General Rule. The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash
equivalents at the time when such Shares are purchased, except as otherwise provided in this Section 7. 
 (b) Services Rendered.
At the discretion of the Board of Directors, Shares may be awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award. 

(c) Promissory Note. At the discretion of the Board of Directors, all or a portion of the Purchase Price or Exercise Price (as the case
may be) of Shares issued under the Plan may be paid with a full-recourse promissory note. The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon. The interest rate payable under the
terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code. Subject to the foregoing, the Board of Directors (at its sole discretion) shall specify the term,
interest rate, amortization requirements (if any) and other provisions of such note. 
 (d) Surrender of Stock. At the discretion of
the Board of Directors, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and
shall be valued at their Fair Market Value as of the date when the Option is exercised. 
 (e) Exercise/Sale. To the extent that a
Stock Option Agreement so provides, and if Stock is publicly traded, all or part of the Exercise Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker
approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company. 

  
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 (f) Other Forms of Payment. To the extent that a Stock Purchase Agreement or Stock Option
Agreement so provides, the Purchase Price or Exercise Price of Shares issued under the Plan may be paid in any other form permitted by the Delaware General Corporation Law, as amended. 

SECTION 8. ADJUSTMENT OF SHARES. 
 (a)
General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a reclassification, or any other increase or
decrease in the number of issued shares of Stock effected without receipt of consideration by the Company, proportionate adjustments shall automatically be made in each of (i) the number of Shares available for future grants under
Section 4, (ii) the number of Shares covered by each outstanding Option and (iii) the Exercise Price under each outstanding Option. In the event of a declaration of an extraordinary dividend payable in a form other than Shares in an
amount that has a material effect on the Fair Market Value of the Stock, a recapitalization, a spin-off, or a similar occurrence, the Board of Directors at its sole discretion may make appropriate adjustments in one or more of (i) the number of
Shares available for future grants under Section 4, (ii) the number of Shares covered by each outstanding Option or (iii) the Exercise Price under each outstanding Option; provided, however, that the Board of Directors shall in any
event make such adjustments as may be required by Section 25102(o) of the California Corporations Code. 
 (b) Mergers and
Consolidations. In the event that the Company is a party to a merger or consolidation, outstanding Options and Shares acquired under the Plan shall be subject to the agreement of merger or consolidation, which need not treat all outstanding
Options in an identical manner. Such agreement, without the Optionees’ consent, may dispose of Options that are not exercisable as of the effective date of such merger or consolidation in any manner permitted by applicable law, including
(without limitation) the cancellation of such Options without the payment of any consideration. Such agreement, without the Optionees’ consent, shall provide for one or more of the following with respect to Options that are exercisable as of
the effective date of such merger or consolidation: 
 (i) The continuation of such Options by the Company (if the Company is
the surviving corporation). 
 (ii) The assumption of such Options by the surviving corporation or its parent in a manner
that complies with Section 424(a) of the Code (whether or not such Options are ISOs). 
 (iii) The substitution by the
surviving corporation or its parent of new options for such Options in a manner that complies with Section 424(a) of the Code (whether or not such Options are ISOs). 

  
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 (iv) The cancellation of such Options and a payment to the Optionees equal to the
excess of (A) the Fair Market Value of the Shares subject to such Options as of the effective date of such merger or consolidation over (B) their Exercise Price. Such payment shall be made in the form of cash, cash equivalents, or
securities of the surviving corporation or its parent with a Fair Market Value equal to the required amount. 
 (v) The
cancellation of such Options. Any exercise of such Options prior to the closing date of such merger or consolidation may be contingent on the closing of such merger or consolidation. 

(c) Reservation of Rights. Except as provided in this Section 8, a Grantee, Purchaser or Optionee shall have no rights by reason of
(i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Any issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option
pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets. 
 SECTION 9. PRE-EXERCISE INFORMATION REQUIREMENT. 

(a) Application of Requirement. This Section 9 shall apply only during a period that (i) commences when the Company begins to
rely on the exemption described in Rule 12h-1(f)(1) under the Exchange Act, as determined by the Company in its sole discretion, and (ii) ends on the earlier of (A) the date when the Company ceases to rely on such exemption, as
determined by the Company in its sole discretion, or (B) the date when the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. In addition, this Section 9 shall in no event apply to
an Optionee after he or she has fully exercised all of his or her Options. 
 (b) Scope of Requirement. The Company shall provide to
each Optionee the information described in Rule 701(e)(3), (4) and (5) under the Securities Act. Such information shall be provided at six-month intervals, and the financial statements included in such information shall not be more
than 180 days old. The foregoing notwithstanding, the Company shall not be required to provide such information unless the Optionee has agreed in writing, on a form prescribed by the Company, to keep such information confidential. 

SECTION 10. MISCELLANEOUS PROVISIONS. 

(a) Securities Law Requirements. Shares shall not be issued under the Plan unless the issuance and delivery of such Shares
comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock
exchange or other securities market on which the Company’s securities may then be traded. The Company shall not be liable for a failure to issue Shares that is attributable to such requirements. 

  
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 (b) No Retention Rights. Nothing in the Plan or in any right or Option granted under the
Plan shall confer upon the Grantee, Purchaser or Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or
retaining the Grantee, Purchaser or Optionee) or of the Grantee, Purchaser or Optionee, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause. 

(c) Treatment as Compensation. Any compensation that an individual earns or is deemed to earn under this Plan shall not be considered a
part of his or her compensation for purposes of calculating contributions, accruals or benefits under any other plan or program that is maintained or funded by the Company, a Parent or a Subsidiary. 

(d) Governing Law. The Plan and all awards, sales and grants under the Plan shall be governed by, and construed in accordance with, the
laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such State. 
 SECTION 11. DURATION AND AMENDMENTS.

 (a) Term of the Plan. The Plan, as set forth herein, shall become effective on the date of its adoption by the Board of
Directors, subject to the approval of the Company’s stockholders. If the stockholders fail to approve the Plan within 12 months after its adoption by the Board of Directors, then any grants, exercises or sales that have already occurred under
the Plan shall be rescinded and no additional grants, exercises or sales shall thereafter be made under the Plan. The Plan shall terminate automatically 10 years after the later of (i) the date when the Board of Directors adopted the Plan or
(ii) the date when the Board of Directors approved the most recent increase in the number of Shares reserved under Section 4 that was also approved by the Company’s stockholders. The Plan may be terminated on any earlier date pursuant
to Subsection (b) below. 
 (b) Right to Amend or Terminate the Plan. The Board of Directors may amend, suspend or terminate the
Plan at any time and for any reason; provided, however, that any amendment of the Plan shall be subject to the approval of the Company’s stockholders if it (i) increases the number of Shares available for issuance under the Plan (except as
provided in Section 8) or (ii) materially changes the class of persons who are eligible for the grant of ISOs. Stockholder approval shall not be required for any other amendment of the Plan. If the stockholders fail to approve an increase
in the number of Shares reserved under Section 4 within 12 months after its adoption by the Board of Directors, then any grants, exercises or sales that have already occurred in reliance on such increase shall be rescinded and no additional
grants, exercises or sales shall thereafter be made in reliance on such increase. 
 (c) Effect of Amendment or Termination. No Shares
shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option (or any other right to purchase Shares) granted under the Plan prior to such termination. The termination of the Plan, or any amendment thereof,
shall not affect any Share previously issued or any Option previously granted under the Plan. 

  
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 SECTION 12. DEFINITIONS. 

(a) “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time. 

(b) “Code” shall mean the Internal Revenue Code of 1986, as amended. 

(c) “Committee” shall mean a committee of the Board of Directors, as described in Section 2(a). 

(d) “Company” shall mean Tobira Therapeutics, Inc., a Delaware corporation. 

(e) “Consultant” shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a
consultant or advisor, excluding Employees and Outside Directors. 
 (f) “Date of Grant” shall mean the date of grant
specified in the applicable Stock Option Agreement, which date shall be the later of (i) the date on which the Board of Directors resolved to grant the Option or (ii) the first day of the Optionee’s Service. 

(g) “Disability” shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment. 
 (h) “Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary. 
 (i) “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended. 
 (j) “Exercise Price” shall mean the amount for which
one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option Agreement. 

(k) “Fair Market Value” shall mean the fair market value of a Share, as determined by the Board of Directors in good
faith. Such determination shall be conclusive and binding on all persons. 
 (l) “Family Member” shall mean
(i) any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships,
(ii) any person sharing the Optionee’s household (other than a tenant or employee), (iii) a trust in which persons described in Clause (i) or (ii) have more than 50% of the beneficial interest, (iv) a foundation in
which persons described in Clause (i) or (ii) or the Optionee control the management of assets and (v) any other entity in which persons described in Clause (i) or (ii) or the Optionee own more than 50% of the voting
interests. 

  
 10 








 (m) “Grantee” shall mean a person to whom the Board of Directors has
awarded Shares under the Plan. 
 (n) “ISO” shall mean an employee incentive stock option described in
Section 422(b) of the Code. 
 (o) “Nonstatutory Option” shall mean a stock option not described in
Sections 422(b) or 423(b) of the Code. 
 (p) “Option” shall mean an ISO or Nonstatutory Option granted under
the Plan and entitling the holder to purchase Shares. 
 (q) “Optionee” shall mean a person who holds an Option. 

(r) “Outside Director” shall mean a member of the Board of Directors who is not an Employee. 

(s) “Parent” shall mean 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. 
 (t)
“Plan” shall mean this Tobira Therapeutics, Inc. 2010 Stock Plan. 
 (u) “Purchase Price”
shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Board of Directors. 

(v) “Purchaser” shall mean a person to whom the Board of Directors has offered the right to purchase Shares under the
Plan (other than upon exercise of an Option). 
 (w) “Securities Act” shall mean the Securities Act of 1933, as
amended. 
 (x) “Service” shall mean service as an Employee, Outside Director or Consultant. 

(y) “Share” shall mean one share of Stock, as adjusted in accordance with Section 8 (if applicable). 

(z) “Stock” shall mean the Common Stock of the Company. 

  
 11 








 (aa) “Stock Grant Agreement” shall mean the agreement between the Company
and a Grantee who is awarded Shares under the Plan that contains the terms, conditions and restrictions pertaining to the award of such Shares. 

(bb) “Stock Option Agreement” shall mean the agreement between the Company and an Optionee that contains the terms,
conditions and restrictions pertaining to the Optionee’s Option. 
 (cc) “Stock Purchase Agreement” shall mean
the agreement between the Company and a Purchaser who purchases Shares under the Plan that contains the terms, conditions and restrictions pertaining to the purchase of such Shares. 

(dd) “Subsidiary” shall mean 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. 
  

  
 12 








 EXHIBIT A 

SCHEDULE OF SHARES RESERVED FOR ISSUANCE
UNDER THE PLAN 
  

											
	 Date of Board

Approval
	  	Date of Stockholder
Approval	  	Number of
Shares Added	 	  	Cumulative Number
of Shares	 
	 February 25, 2010
	  	March 4, 2010	  	 	Not Applicable	  	  	 	775,379	  
	 August 24, 2010
	  	August 24, 2010	  	 	3,242,982	  	  	 	4,018,361	  
	 October 13, 2010
	  	November 9, 2011	  	 	174,470	  	  	 	4,192,831	  
	 March 22, 2011
	  	November 9, 2011	  	 	1,729,351	  	  	 	5,922,182	  
	 April 7, 2011
	  	November 9, 2011	  	 	6,695,275	  	  	 	12,617,457	  
	 December 7, 2011
	  	December 7, 2011	  	 	3,641,725	  	  	 	16,259,182	  
	 February 7, 2013
	  	February 7, 2013	  	 	6,396,356	  	  	 	22,655,538	  


  
 E-1 








 TOBIRA THERAPEUTICS, INC. 2010
STOCK PLAN 
 NOTICE OF STOCK OPTION
GRANT (INSTALLMENT VESTING) 
 The Optionee has been granted the following option to purchase shares of the
Common Stock of Tobira Therapeutics, Inc.: 
  

			
	Name of Optionee:	  	«Name»
		
	Total Number of Shares:	  	«TotalShares»
		
	Type of Option:	  	«ISO» Incentive Stock Option (ISO)
		
		  	«NSO» Nonstatutory Stock Option (NSO)
		
	Exercise Price per Share:	  	$«PricePerShare»
		
	Date of Grant:	  	«DateGrant»
		
	Date Exercisable:	  	This option may be exercised with respect to the first 25% of the Shares subject to this option when the Optionee completes twelve (12) months of continuous Service beginning with the Vesting Commencement Date set forth below. This
option may be exercised with respect to an additional 1/36th of the total remaining number of Shares subject to this option when the Optionee completes each month of continuous Service thereafter.
		
	Vesting Commencement Date:	  	«VestComDate»
		
	Expiration Date:	  	«ExpDate». This option expires earlier if the Optionee’s Service terminates earlier, as provided in Section 6 of the Stock Option Agreement.

 By signing below, the Optionee and the Company agree that this option is granted under, and governed by the terms and
conditions of, the 2010 Stock Plan and the Stock Option Agreement. Both of these documents are attached to, and made a part of, this Notice of Stock Option Grant. Section 13 of the Stock Option Agreement includes important acknowledgements
of the Optionee. 
  

					
	OPTIONEE:	 	TOBIRA THERAPEUTICS, INC.
			
	  
	 	By:	 	  

		 	Title:	 	  









 THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE EXERCISE THEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED. 
 TOBIRA THERAPEUTICS, INC. 2010 STOCK
PLAN: 
 STOCK OPTION AGREEMENT 

SECTION 1. GRANT OF OPTION. 
 (a)
OPTION. On the terms and conditions set forth in the Notice of Stock Option Grant and this Agreement, the Company grants to the Optionee on the Date of Grant the option to purchase at the Exercise Price the
number of Shares set forth in the Notice of Stock Option Grant. The Exercise Price is agreed to be at least 100% of the Fair Market Value per Share on the Date of Grant (110% of Fair Market Value if this option is designated as an ISO in the Notice
of Stock Option Grant and Section 3(b) of the Plan applies). This option is intended to be an ISO or an NSO, as provided in the Notice of Stock Option Grant. 

(b) $100,000 Limitation. Even if this option is designated as an ISO in the Notice of Stock Option Grant, it shall be deemed to be an
NSO to the extent (and only to the extent) required by the $100,000 annual limitation under Section 422(d) of the Code. 
 (c) Stock
Plan and Defined Terms. This option is granted pursuant to the Plan, a copy of which the Optionee acknowledges having received. The provisions of the Plan are incorporated into this Agreement by this reference. Capitalized terms are defined in
Section 14 of this Agreement. 
 SECTION 2. RIGHT TO EXERCISE. 

(a) Exercisability. Subject to Subsection (b) below and the other conditions set forth in this Agreement, all or part of this
option may be exercised prior to its expiration at the time or times set forth in the Notice of Stock Option Grant. 
 (b) Stockholder
Approval. Any other provision of this Agreement notwithstanding, no portion of this option shall be exercisable at any time prior to the approval of the Plan by the Company’s stockholders. 

SECTION 3. No TRANSFER OR ASSIGNMENT OF OPTION. 

Except as otherwise provided in this Agreement, this option and the rights and privileges conferred hereby shall not be sold, pledged or
otherwise transferred (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment, levy or similar process. 







 SECTION 4. EXERCISE PROCEDURES. 

(a) Notice of Exercise. The Optionee or the Optionee’s representative may exercise this option by giving written notice to the
Company pursuant to Section 12(c). The notice shall specify the election to exercise this option, the number of Shares for which it is being exercised and the form of payment. The person exercising this option shall sign the notice. In the
event that this option is being exercised by the representative of the Optionee, the notice shall be accompanied by proof (satisfactory to the Company) of the representative’s right to exercise this option. The Optionee or the Optionee’s
representative shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 5 for the full amount of the Purchase Price. 

(b) Issuance of Shares. After receiving a proper notice of exercise, the Company shall cause to be issued one or more certificates
evidencing the Shares for which this option has been exercised. Such Shares shall be registered (i) in the name of the person exercising this option, (ii) in the names of such person and his or her spouse as community property or as joint
tenants with the right of survivorship or (iii) with the Company’s consent, in the name of a revocable trust. The Company shall cause such certificates to be delivered to or upon the order of the person exercising this option. 

(c) Withholding Taxes. In the event that the Company determines that it is required to withhold any tax as a result of the exercise of
this option, the Optionee, as a condition to the exercise of this option, shall make arrangements satisfactory to the Company to enable it to satisfy all withholding requirements. The Optionee shall also make arrangements satisfactory to the Company
to enable it to satisfy any withholding requirements that may arise in connection with the disposition of Shares purchased by exercising this option. 

SECTION 5. PAYMENT FOR STOCK. 
 (a)
Cash. All or part of the Purchase Price may be paid in cash or cash equivalents. 
 (b) Surrender of Stock. At the discretion
of the Board of Directors, all or any part of the Purchase Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer
and shall be valued at their Fair Market Value as of the date when this option is exercised. 
 (c) Exercise/Sale. All or part of the
Purchase Price and any withholding taxes may be paid by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to
the Company. However, payment pursuant to this Subsection (c) shall be permitted only if (i) Stock then is publicly traded and (ii) such payment does not violate applicable law. 

  
 2 








 SECTION 6. TERM AND EXPIRATION. 

(a) Basic Term. This option shall in any event expire on the expiration date set forth in the Notice of Stock Option Grant, which date
is 10 years after the Date of Grant (five years after the Date of Grant if this option is designated as an ISO in the Notice of Stock Option Grant and Section 3(b) of the Plan applies). 

(b) Termination of Service (Except by Death). If the Optionee’s Service terminates for any reason other than death, then this
option shall expire on the earliest of the following occasions: 
 (i) The expiration date determined pursuant to
Subsection (a) above; 
 (ii) The date three months after the termination of the Optionee’s Service for any reason
other than Disability; or 
 (iii) The date six months after the termination of the Optionee’s Service by reason of
Disability. 
 The Optionee may exercise all or part of this option at any time before its expiration under the preceding sentence, but only to the extent
that this option had become exercisable before the Optionee’s Service terminated. When the Optionee’s Service terminates, this option shall expire immediately with respect to the number of Shares for which this option is not yet
exercisable. In the event that the Optionee dies after termination of Service but before the expiration of this option, all or part of this option may be exercised (prior to expiration) by the executors or administrators of the Optionee’s
estate or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that this option had become exercisable before the Optionee’s Service terminated. 

(c) Death of the Optionee. If the Optionee dies while in Service, then this option shall expire on the earlier of the following dates:

 (i) The expiration date determined pursuant to Subsection (a) above; or 

(ii) The date 12 months after the Optionee’s death. 

All or part of this option may be exercised at any time before its expiration under the preceding sentence by the executors or administrators of the
Optionee’s estate or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that this option had become exercisable before the Optionee’s death. When
the Optionee dies, this option shall expire immediately with respect to the number of Shares for which this option is not yet exercisable. 

  
 3 








 (d) Part-Time Employment and Leaves of Absence. If the Optionee commences working on a
part-time basis, then the Company may adjust the vesting schedule set forth in the Notice of Stock Option Grant. If the Optionee goes on a leave of absence, then the Company may adjust the vesting schedule set forth in the Notice of Stock Option
Grant in accordance with the Company’s leave of absence policy or the terms of such leave. Except as provided in the preceding sentence, Service shall be deemed to continue for any purpose under this Agreement while the Optionee is on a bona
fide leave of absence, if (i) such leave was approved by the Company in writing and (ii) continued crediting of Service for such purpose is expressly required by the terms of such leave or by applicable law (as determined by the
Company). Service shall be deemed to terminate when such leave ends, unless the Optionee immediately returns to active work. 
 (e) Notice
Concerning ISO Treatment. Even if this option is designated as an ISO in the Notice of Stock Option Grant, it ceases to qualify for favorable tax treatment as an ISO to the extent that it is exercised: 

(i) More than three months after the date when the Optionee ceases to be an Employee for any reason other than death or
permanent and total disability (as defined in Section 22(e)(3) of the Code); 
 (ii) More than 12 months after the date
when the Optionee ceases to be an Employee by reason of permanent and total disability (as defined in Section 22(e)(3) of the Code); or 

(iii) More than three months after the date when the Optionee has been on a leave of absence for 90 days, unless the
Optionee’s reemployment rights following such leave were guaranteed by statute or by contract. 
 SECTION 7. RIGHT OF FIRST REFUSAL. 

(a) Right of First Refusal. In the event that the Optionee proposes to sell, pledge or otherwise transfer to a third party any Shares
acquired under this Agreement, or any interest in such Shares, the Company shall have the Right of First Refusal with respect to all (and not less than all) of such Shares. If the Optionee desires to transfer Shares acquired under this Agreement,
the Optionee shall give a written Transfer Notice to the Company describing fully the proposed transfer, including the number of Shares proposed to be transferred, the proposed transfer price, the name and address of the proposed Transferee and
proof satisfactory to the Company that the proposed sale or transfer will not violate any applicable federal, State or foreign securities laws. The Transfer Notice shall be signed both by the Optionee and by the proposed Transferee and must
constitute a binding commitment of both parties to the transfer of the Shares. The Company shall have the right to purchase all, and not less than all, of the Shares on the terms of the proposal described in the Transfer Notice (subject, however, to
any change in such terms permitted under Subsection (b) below) by delivery of a notice of exercise of the Right of First Refusal within 30 days after the date when the Transfer Notice was received by the Company. 

(b) Transfer of Shares. If the Company fails to exercise its Right of First Refusal within 30 days after the date when it received
the Transfer Notice, the Optionee may, not later than 90 days following receipt of the Transfer Notice by the Company, conclude a transfer of the Shares subject to the Transfer Notice on the terms and conditions described in the Transfer


  
 4 








 
Notice, provided that any such sale is made in compliance with applicable federal, State and foreign securities laws and not in violation of any other contractual restrictions to which the
Optionee is bound. Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by the Optionee, shall again be subject to the Right of First Refusal and shall
require compliance with the procedure described in Subsection (a) above. If the Company exercises its Right of First Refusal, the parties shall consummate the sale of the Shares on the terms set forth in the Transfer Notice within 60 days
after the date when the Company received the Transfer Notice (or within such longer period as may have been specified in the Transfer Notice); provided, however, that in the event the Transfer Notice provided that payment for the Shares was to be
made in a form other than cash or cash equivalents paid at the time of transfer, the Company shall have the option of paying for the Shares with cash or cash equivalents equal to the present value of the consideration described in the Transfer
Notice. 
 (c) Additional or Exchanged Securities and Property. In the event of a merger or consolidation of the Company with or into
another entity, any other corporate reorganization, a stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, an
adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities, any securities or other property (including cash or cash equivalents) that are by reason of such transaction exchanged
for, or distributed with respect to, any Shares subject to this Section 7 shall immediately be subject to the Right of First Refusal. Appropriate adjustments to reflect the exchange or distribution of such securities or property shall be made
to the number and/or class of the Shares subject to this Section 7. 
 (d) Termination of Right of First Refusal. Any other
provision of this Section 7 notwithstanding, in the event that the Stock is readily tradable on an established securities market when the Optionee desires to transfer Shares, the Company shall have no Right of First Refusal, and the Optionee
shall have no obligation to comply with the procedures prescribed by Subsections (a) and (b) above. 
 (e) Permitted
Transfers. This Section 7 shall not apply to (i) a transfer by beneficiary designation, will or intestate succession or (ii) a transfer to one or more members of the Optionee’s Immediate Family or to a trust established by
the Optionee for the benefit of the Optionee and/or one or more members of the Optionee’s Immediate Family, provided in either case that the Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this
Agreement. If the Optionee transfers any Shares acquired under this Agreement, either under this Subsection (e) or after the Company has failed to exercise the Right of First Refusal, then this Agreement shall apply to the Transferee to the
same extent as to the Optionee. 
 (f) Termination of Rights as Stockholder. If the Company makes available, at the time and place and
in the amount and form provided in this Agreement, the consideration for the Shares to be purchased in accordance with this Section 7, then after such time the person from whom such Shares are to be purchased shall no longer have any rights as
a holder of such Shares (other than the right to receive payment of such consideration in accordance with this Agreement). Such Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether or not the
certificate(s) therefor have been delivered as required by this Agreement. 

  
 5 








 (g) Assignment of Right of First Refusal. The Board of Directors may freely assign the
Company’s Right of First Refusal, in whole or in part. Any person who accepts an assignment of the Right of First Refusal from the Company shall assume all of the Company’s rights and obligations under this Section 7. 

SECTION 8. LEGALITY OF INITIAL ISSUANCE. 

No Shares shall be issued upon the exercise of this option unless and until the Company has determined that: 

(a) It and the Optionee have taken any actions required to register the Shares under the Securities Act or to perfect an
exemption from the registration requirements thereof; 
 (b) Any applicable listing requirement of any stock exchange or
other securities market on which Stock is listed has been satisfied; and 
 (c) Any other applicable provision of federal,
State or foreign law has been satisfied. 
 SECTION 9. NO REGISTRATION RIGHTS. 

The Company may, but shall not be obligated to, register or qualify the sale of Shares under the Securities Act or any other applicable law.
The Company shall not be obligated to take any affirmative action in order to cause the sale of Shares under this Agreement to comply with any law. 

SECTION 10. RESTRICTIONS ON TRANSFER OF SHARES. 

(a) Securities Law Restrictions. Regardless of whether the offering and sale of Shares under the Plan have been registered under the
Securities Act or have been registered or qualified under the securities laws of any State, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends
on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary or desirable in order to achieve compliance with the Securities Act,
the securities laws of any State or any other law. 
 (b) Market Stand-Off. In connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company’s initial public offering, the Optionee or a Transferee shall not directly or indirectly sell, make any short
sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing
transactions with respect to, any Shares acquired under this Agreement without the prior written consent of the Company or its managing underwriter. Such restriction (the “Market Stand-Off”)


  
 6 








 
shall be in effect for such period of time following the date of the final prospectus for the offering as may be requested by the Company or such underwriter. In no event, however, shall such
period exceed 180 days plus such additional period as may reasonably be requested by the Company or such underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports or (ii) analyst
recommendations and opinions, including (without limitation) the restrictions set forth in Rule 2711(f)(4) of the National Association of Securities Dealers and Rule 472(f)(4) of the New York Stock Exchange, as amended, or any similar
successor rules. The Market Stand-Off shall in any event terminate two years after the date of the Company’s initial public offering. In the event of the declaration of a stock dividend, a spin-off, a
stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities without receipt of consideration, any new, substituted or additional securities which are by reason of
such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off. In order to enforce the Market Stand-Off, the
Company may impose stop-transfer instructions with respect to the Shares acquired under this Agreement until the end of the applicable stand-off period. The Company’s underwriters shall be beneficiaries of the agreement set forth in this
Subsection (b). This Subsection (b) shall not apply to Shares registered in the public offering under the Securities Act. 
 (c)
Investment Intent at Grant. The Optionee represents and agrees that the Shares to be acquired upon exercising this option will be acquired for investment, and not with a view to the sale or distribution thereof. 

(d) Investment Intent at Exercise. In the event that the sale of Shares under the Plan is not registered under the Securities Act but an
exemption is available that requires an investment representation or other representation, the Optionee shall represent and agree at the time of exercise that the Shares being acquired upon exercising this option are being acquired for investment,
and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel. 

(e) Legends. All certificates evidencing Shares purchased under this Agreement shall bear the following legend: 

“THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH
THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE
SHARES. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.” 
 All
certificates evidencing Shares purchased under this Agreement in an unregistered transaction shall bear the following legend (and such other restrictive legends as are required or deemed advisable under the provisions of any applicable law): 

  
 7 








 “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.” 

(f) Removal of Legends. If, in the opinion of the Company and its counsel, any legend placed on a stock certificate representing Shares
sold under this Agreement is no longer required, the holder of such certificate shall be entitled to exchange such certificate for a certificate representing the same number of Shares but without such legend. 

(g) Administration. Any determination by the Company and its counsel in connection with any of the matters set forth in this
Section 10 shall be conclusive and binding on the Optionee and all other persons. 
 SECTION 11. ADJUSTMENT OF SHARES. 

In the event of any transaction described in Section 8(a) of the Plan, the terms of this option (including, without limitation, the number
and kind of Shares subject to this option and the Exercise Price) shall be adjusted as set forth in Section 8(a) of the Plan. In the event that the Company is a party to a merger or consolidation, this option shall be subject to the agreement
of merger or consolidation, as provided in Section 8(b) of the Plan. 
 SECTION 12. MISCELLANEOUS PROVISIONS. 

(a) Rights as a Stockholder. Neither the Optionee nor the Optionee’s representative shall have any rights as a stockholder with
respect to any Shares subject to this option until the Optionee or the Optionee’s representative becomes entitled to receive such Shares by filing a notice of exercise and paying the Purchase Price pursuant to Sections 4 and 5. 

(b) No Retention Rights. Nothing in this option or in the Plan shall confer upon the Optionee any right to continue in Service for any
period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Optionee) or of the Optionee, which rights are hereby expressly reserved by each, to
terminate his or her Service at any time and for any reason, with or without cause. 
 (c) Notice. Any notice required by the terms of
this Agreement shall be given in writing. It shall be deemed effective upon (i) personal delivery, (ii) deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid or (iii) deposit
with Federal Express Corporation, with shipping charges prepaid. Notice shall be addressed to the Company at its principal executive office and to the Optionee at the address that he or she most recently provided to the Company in accordance with
this Subsection (c). 
 (d) Modifications and Waivers. No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by the Optionee and by an authorized officer of the Company (other than the Optionee). No waiver by either party of any breach of, or of compliance with, any condition
or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. 

  
 8 








 (e) Entire Agreement. The Notice of Stock Option Grant, this Agreement and the Plan
constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) that relate to the
subject matter hereof. 
 (f) Choice of Law. This Agreement shall be governed by, and construed in accordance with, the laws of the
State of Delaware, as such laws are applied to contracts entered into and performed in such State. 
 SECTION 13. ACKNOWLEDGEMENTS OF THE OPTIONEE.

 (a) Tax Consequences. The Optionee agrees that the Company does not have a duty to design or administer the Plan or its other
compensation programs in a manner that minimizes the Optionee’s tax liabilities. The Optionee shall not make any claim against the Company or its Board of Directors, officers or employees related to tax liabilities arising from this option or
the Optionee’s other compensation. In particular, the Optionee acknowledges that this option is exempt from Section 409A of the Code only if the Exercise Price is at least equal to the Fair Market Value per Share on the Date of Grant.
Since Shares are not traded on an established securities market, the determination of their Fair Market Value is made by the Board of Directors or by an independent valuation firm retained by the Company. The Optionee acknowledges that there is no
guarantee in either case that the Internal Revenue Service will agree with the valuation, and the Optionee shall not make any claim against the Company or its Board of Directors, officers or employees in the event that the Internal Revenue Service
asserts that the valuation was too low. 
 (b) Electronic Delivery of Documents. The Optionee agrees to accept by email all documents
relating to the Company, the Plan or this option and all other documents that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission). The
Optionee also agrees that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a website, it shall notify the
Optionee by email of their availability. The Optionee acknowledges that he or she may incur costs in connection with electronic delivery, including the cost of accessing the internet and printing fees, and that an interruption of internet access may
interfere with his or her ability to access the documents. This consent shall remain in effect until this option expires or until the Optionee gives the Company written notice that it should deliver paper documents. 

(c) No Notice of Expiration Date. The Optionee agrees that the Company and its officers, employees, attorneys and agents do not have any
obligation to notify him or her prior to the expiration of this option pursuant to Section 6, regardless of whether this option will expire at the end of its full term or on an earlier date related to the termination of the Optionee’s
Service. The Optionee further agrees that he or she has the sole responsibility for monitoring the expiration of this option and for exercising this option, if at all, before it expires. This Subsection (c) shall supersede any contrary
representation that may have been made, orally or in writing, by the Company or by an officer, employee, attorney or agent of the Company. 

  
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 SECTION 14. DEFINITIONS. 

(a) “Agreement” shall mean this Stock Option Agreement. 

(b) “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time or, if a Committee
has been appointed, such Committee. 
 (c) “Code” shall mean the Internal Revenue Code of 1986, as amended. 

(d) “Committee” shall mean a committee of the Board of Directors, as described in Section 2 of the Plan. 

(e) “Company” shall mean Tobira Therapeutics, Inc., a Delaware corporation. 

(f) “Consultant” shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant
or advisor, excluding Employees and Outside Directors. 
 (g) “Date of Grant” shall mean the date of grant specified in the
Notice of Stock Option Grant, which date shall be the later of (i) the date on which the Board of Directors resolved to grant this option or (ii) the first day of the Optionee’s Service. 

(h) “Disability” shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment. 
 (i) “Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary. 
 (j) “Exercise Price”
shall mean the amount for which one Share may be purchased upon exercise of this option, as specified in the Notice of Stock Option Grant. 

(k) “Fair Market Value” shall mean the fair market value of a Share, as determined by the Board of Directors in good faith.
Such determination shall be conclusive and binding on all persons. 
 (l) “Immediate Family” shall mean any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and shall include adoptive relationships. 

(m) “ISO” shall mean an employee incentive stock option described in Section 422(b) of the Code. 

  
 10 








 (n) “Notice of Stock Option Grant” shall mean the document so entitled to which
this Agreement is attached. 
 (o) “NSO” shall mean a stock option not described in Section 422(b) or 423(b) of
the Code. 
 (p) “Optionee” shall mean the person named in the Notice of Stock Option Grant. 

(q) “Outside Director” shall mean a member of the Board of Directors who is not an Employee. 

(r) “Parent” shall mean 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. 

(s) “Plan” shall mean the Tobira Therapeutics, Inc. 2010 Stock Plan, as in effect on the Date of Grant. 

(t) “Purchase Price” shall mean the Exercise Price multiplied by the number of Shares with respect to which this option is
being exercised. 
 (u) “Right of First Refusal” shall mean the Company’s right of first refusal described in
Section 7. 
 (v) “Securities Act” shall mean the Securities Act of 1933, as amended. 

(w) “Service” shall mean service as an Employee, Outside Director or Consultant. 

(x) “Share” shall mean one share of Stock, as adjusted in accordance with Section 8 of the Plan (if applicable). 

(y) “Stock” shall mean the Common Stock of the Company. 

(z) “Subsidiary” shall mean 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. 

(aa) “Transferee” shall mean any person to whom the Optionee has directly or indirectly transferred any Share acquired under
this Agreement. 
 (bb) “Transfer Notice” shall mean the notice of a proposed transfer of Shares described in
Section 7. 

  
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 TOBIRA THERAPEUTICS, INC. 2010
STOCK PLAN 
 NOTICE OF STOCK OPTION
GRANT 
 (INSTALLMENT VESTING, ACCELERATION) 

The Optionee has been granted the following option to purchase shares of the Common Stock of Tobira Therapeutics, Inc.: 

 

			
	 Name of Optionee:
	 	«Name»
		
	 Total Number of Shares:
	 	«TotalShares»
		
	 Type of Option:
	 	«ISO» Incentive Stock Option (ISO)
		
		 	«NSO» Nonstatutory Stock Option (NSO)
		
	 Exercise Price per Share:
	 	$«PricePerShare»
		
	 Date of Grant:
	 	«DateGrant»
		
	 Date Exercisable:
	 	This option may be exercised with respect to the first 25% of the Shares subject to this option when the Optionee completes «CliffPeriod» months of continuous Service beginning with the Vesting Commencement Date set
forth below. This option may be exercised with respect to an additional 1/48th of the Shares subject to this option when the Optionee completes each month of continuous Service thereafter. This option may become exercisable on an accelerated basis
under Section 2(a) of the Stock Option Agreement.
		
	 Vesting Commencement Date:
	 	«VestComDate»
		
	 Expiration Date:
	 	«ExpDate». This option expires earlier if the Optionee’s Service terminates earlier, as provided in Section 6 of the Stock Option Agreement.








 By signing below, the Optionee and the Company agree that this option is granted under, and governed by the terms
and conditions of, the 2010 Stock Plan and the Stock Option Agreement. Both of these documents are attached to, and made a part of, this Notice of Stock Option Grant. Section 13 of the Stock Option Agreement includes important
acknowledgements of the Optionee. 
  

					
	OPTIONEE:	 	TOBIRA THERAPEUTICS, INC.
			
	 	 	By:	 	 
		 	Title:	 	 








 THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE EXERCISE THEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED. 
 TOBIRA THERAPEUTICS, INC. 2010 STOCK
PLAN: 
 STOCK OPTION AGREEMENT 

(INSTALLMENT VESTING, ACCELERATION) 

SECTION 1. GRANT OF OPTION. 

(a) Option. On the terms and conditions set forth in the Notice of Stock Option Grant and this Agreement, the Company grants to
the Optionee on the Date of Grant the option to purchase at the Exercise Price the number of Shares set forth in the Notice of Stock Option Grant. The Exercise Price is agreed to be at least 100% of the Fair Market Value per Share on the Date of
Grant (110% of Fair Market Value if this option is designated as an ISO in the Notice of Stock Option Grant and Section 3(b) of the Plan applies). This option is intended to be an ISO or an NSO, as provided in the Notice of Stock Option
Grant. 
 (b) $100,000 Limitation. Even if this option is designated as an ISO in the Notice of Stock Option Grant, it shall be
deemed to be an NSO to the extent (and only to the extent) required by the $100,000 annual limitation under Section 422(d) of the Code. 

(c) Stock Plan and Defined Terms. This option is granted pursuant to the Plan, a copy of which the Optionee acknowledges having
received. The provisions of the Plan are incorporated into this Agreement by this reference. Capitalized terms are defined in Section 14 of this Agreement. 

SECTION 2. RIGHT TO EXERCISE. 
 (a)
Exercisability. Subject to Subsection (b) below and the other conditions set forth in this Agreement, all or part of this option may be exercised prior to its expiration at the time or times set forth in the Notice of Stock Option Grant.
In addition, the following rules shall apply: 
 (i) If the Company is subject to a Change in Control before the
Optionee’s Service terminates, then 50% of the then-unvested portion of the option shall become exercisable, and the remaining portion of the option will vest in equal monthly installments over the number of months remaining in the vesting
schedule that would otherwise apply (as described in the Notice of Grant to which this Agreement is attached) had the Change in Control not occurred; and 







 (ii) If the Optionee is subject to an Involuntary Termination during the period
beginning on the first day of the calendar month immediately preceding the calendar month in which the Change in Control occurs and ending on the last day of the thirteenth calendar month following the calendar month in which the Change in Control
occurs, then all of the then-unvested portion of the option shall become exercisable. 
 (b) Stockholder Approval. Any other
provision of this Agreement notwithstanding, no portion of this option shall be exercisable at any time prior to the approval of the Plan by the Company’s stockholders. 

SECTION 3. NO TRANSFER OR ASSIGNMENT OF OPTION. 

Except as otherwise provided in this Agreement, this option and the rights and privileges conferred hereby shall not be sold, pledged or
otherwise transferred (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment, levy or similar process. 

SECTION 4. EXERCISE PROCEDURES. 

(a) Notice of Exercise. The Optionee or the Optionee’s representative may exercise this option by giving written notice to
the Company pursuant to Section 12(c). The notice shall specify the election to exercise this option, the number of Shares for which it is being exercised and the form of payment. The person exercising this option shall sign the notice. In the
event that this option is being exercised by the representative of the Optionee, the notice shall be accompanied by proof (satisfactory to the Company) of the representative’s right to exercise this option. The Optionee or the Optionee’s
representative shall deliver to the Company, at the time of giving the notice, payment in a form permissible under Section 5 for the full amount of the Purchase Price. 

(b) Issuance of Shares. After receiving a proper notice of exercise, the Company shall cause to be issued one or more certificates
evidencing the Shares for which this option has been exercised. Such Shares shall be registered (i) in the name of the person exercising this option, (ii) in the names of such person and his or her spouse as community property or as joint
tenants with the right of survivorship or (iii) with the Company’s consent, in the name of a revocable trust. The Company shall cause such certificates to be delivered to or upon the order of the person exercising this option. 

(c) Withholding Taxes. In the event that the Company determines that it is required to withhold any tax as a result of the exercise of
this option, the Optionee, as a condition to the exercise of this option, shall make arrangements satisfactory to the Company to enable it to satisfy all withholding requirements. The Optionee shall also make arrangements satisfactory to the Company
to enable it to satisfy any withholding requirements that may arise in connection with the disposition of Shares purchased by exercising this option. 

  
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 SECTION 5. PAYMENT FOR STOCK. 

(a) Cash. All or part of the Purchase Price may be paid in cash or cash equivalents. 

(b) Surrender of Stock. At the discretion of the Board of Directors, all or any part of the Purchase Price may be paid by surrendering,
or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value as of the date when this option is exercised.

 (c) Exercise/Sale. All or part of the Purchase Price and any withholding taxes may be paid by the delivery (on a form prescribed by
the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company. However, payment pursuant to this Subsection (c) shall be permitted only if
(i) Stock then is publicly traded and (ii) such payment does not violate applicable law. 
 SECTION 6. TERM AND EXPIRATION. 

(a) Basic Term. This option shall in any event expire on the expiration date set forth in the Notice of Stock Option Grant, which date
is 10 years after the Date of Grant (five years after the Date of Grant if this option is designated as an ISO in the Notice of Stock Option Grant and Section 3(b) of the Plan applies). 

(b) Termination of Service (Except by Death). If the Optionee’s Service terminates for any reason other than death, then this
option shall expire on the earliest of the following occasions: 
 (i) The expiration date determined pursuant to
Subsection (a) above; 
 (ii) The date three months after the termination of the Optionee’s Service for any reason
other than Disability; or 
 (iii) The date six months after the termination of the Optionee’s Service by reason of
Disability. 
 The Optionee may exercise all or part of this option at any time before its expiration under the preceding sentence, but only to the extent
that this option had become exercisable before the Optionee’s Service terminated. When the Optionee’s Service terminates, this option shall expire immediately with respect to the number of Shares for which this option is not yet
exercisable. In the event that the Optionee dies after termination of Service but before the expiration of this option, all or part of this option may be exercised (prior to expiration) by the executors or administrators of the Optionee’s
estate or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that this option had become exercisable before the Optionee’s Service terminated. 

  
 3 








 (c) Death of the Optionee. If the Optionee dies while in Service, then this option shall
expire on the earlier of the following dates: 
 (i) The expiration date determined pursuant to Subsection (a) above; or

 (ii) The date 12 months after the Optionee’s death. 

All or part of this option may be exercised at any time before its expiration under the preceding sentence by the executors or administrators of the
Optionee’s estate or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that this option had become exercisable before the Optionee’s death. When
the Optionee dies, this option shall expire immediately with respect to the number of Shares for which this option is not yet exercisable. 

(d) Part-Time Employment and Leaves of Absence. If the Optionee commences working on a part-time basis, then the Company may adjust the
vesting schedule set forth in the Notice of Stock Option Grant. If the Optionee goes on a leave of absence, then the Company may adjust the vesting schedule set forth in the Notice of Stock Option Grant in accordance with the Company’s leave of
absence policy or the terms of such leave. Except as provided in the preceding sentence, Service shall be deemed to continue for any purpose under this Agreement while the Optionee is on a bona fide leave of absence, if (i) such leave
was approved by the Company in writing and (ii) continued crediting of Service for such purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company). Service shall be deemed to terminate when such
leave ends, unless the Optionee immediately returns to active work. 
 (e) Notice Concerning ISO Treatment. Even if this option is
designated as an ISO in the Notice of Stock Option Grant, it ceases to qualify for favorable tax treatment as an ISO to the extent that it is exercised: 

(i) More than three months after the date when the Optionee ceases to be an Employee for any reason other than death or
permanent and total disability (as defined in Section 22(e)(3) of the Code); 
 (ii) More than 12 months after the date
when the Optionee ceases to be an Employee by reason of permanent and total disability (as defined in Section 22(e)(3) of the Code); or 

(iii) More than three months after the date when the Optionee has been on a leave of absence for 90 days, unless the
Optionee’s reemployment rights following such leave were guaranteed by statute or by contract. 
 SECTION 7. RIGHT OF FIRST REFUSAL. 

  
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 (a) Right of First Refusal. In the event that the Optionee proposes to sell, pledge or
otherwise transfer to a third party any Shares acquired under this Agreement, or any interest in such Shares, the Company shall have the Right of First Refusal with respect to all (and not less than all) of such Shares. If the Optionee desires to
transfer Shares acquired under this Agreement, the Optionee shall give a written Transfer Notice to the Company describing fully the proposed transfer, including the number of Shares proposed to be transferred, the proposed transfer price, the name
and address of the proposed Transferee and proof satisfactory to the Company that the proposed sale or transfer will not violate any applicable federal, State or foreign securities laws. The Transfer Notice shall be signed both by the Optionee and
by the proposed Transferee and must constitute a binding commitment of both parties to the transfer of the Shares. The Company shall have the right to purchase all, and not less than all, of the Shares on the terms of the proposal described in the
Transfer Notice (subject, however, to any change in such terms permitted under Subsection (b) below) by delivery of a notice of exercise of the Right of First Refusal within 30 days after the date when the Transfer Notice was received by the
Company. 
 (b) Transfer of Shares. If the Company fails to exercise its Right of First Refusal within 30 days after the date
when it received the Transfer Notice, the Optionee may, not later than 90 days following receipt of the Transfer Notice by the Company, conclude a transfer of the Shares subject to the Transfer Notice on the terms and conditions described in
the Transfer Notice, provided that any such sale is made in compliance with applicable federal, State and foreign securities laws and not in violation of any other contractual restrictions to which the Optionee is bound. Any proposed transfer on
terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by the Optionee, shall again be subject to the Right of First Refusal and shall require compliance with the procedure described
in Subsection (a) above. If the Company exercises its Right of First Refusal, the parties shall consummate the sale of the Shares on the terms set forth in the Transfer Notice within 60 days after the date when the Company received the
Transfer Notice (or within such longer period as may have been specified in the Transfer Notice); provided, however, that in the event the Transfer Notice provided that payment for the Shares was to be made in a form other than cash or cash
equivalents paid at the time of transfer, the Company shall have the option of paying for the Shares with cash or cash equivalents equal to the present value of the consideration described in the Transfer Notice. 

(c) Additional or Exchanged Securities and Property. In the event of a merger or consolidation of the Company with or into another
entity, any other corporate reorganization, a stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities, any securities or other property (including cash or cash equivalents) that are by reason of such transaction exchanged for, or
distributed with respect to, any Shares subject to this Section 7 shall immediately be subject to the Right of First Refusal. Appropriate adjustments to reflect the exchange or distribution of such securities or property shall be made to the
number and/or class of the Shares subject to this Section 7. 
 (d) Termination of Right of First Refusal. Any other provision of
this Section 7 notwithstanding, in the event that the Stock is readily tradable on an established securities market when the Optionee desires to transfer Shares, the Company shall have no Right of First Refusal, and the Optionee shall have no
obligation to comply with the procedures prescribed by Subsections (a) and (b) above. 

  
 5 








 (e) Permitted Transfers. This Section 7 shall not apply to (i) a transfer by
beneficiary designation, will or intestate succession or (ii) a transfer to one or more members of the Optionee’s Immediate Family or to a trust established by the Optionee for the benefit of the Optionee and/or one or more members of the
Optionee’s Immediate Family, provided in either case that the Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement. If the Optionee transfers any Shares acquired under this Agreement,
either under this Subsection (e) or after the Company has failed to exercise the Right of First Refusal, then this Agreement shall apply to the Transferee to the same extent as to the Optionee. 

(f) Termination of Rights as Stockholder. If the Company makes available, at the time and place and in the amount and form provided in
this Agreement, the consideration for the Shares to be purchased in accordance with this Section 7, then after such time the person from whom such Shares are to be purchased shall no longer have any rights as a holder of such Shares (other than
the right to receive payment of such consideration in accordance with this Agreement). Such Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therefor have been
delivered as required by this Agreement. 
 (g) Assignment of Right of First Refusal. The Board of Directors may freely assign the
Company’s Right of First Refusal, in whole or in part. Any person who accepts an assignment of the Right of First Refusal from the Company shall assume all of the Company’s rights and obligations under this Section 7. 

SECTION 8. LEGALITY OF INITIAL ISSUANCE. 

No Shares shall be issued upon the exercise of this option unless and until the Company has determined that: 

(a) It and the Optionee have taken any actions required to register the Shares under the Securities Act or to perfect an
exemption from the registration requirements thereof; 
 (b) Any applicable listing requirement of any stock exchange or
other securities market on which Stock is listed has been satisfied; and 
 (c) Any other applicable provision of federal,
State or foreign law has been satisfied. 
 SECTION 9. NO REGISTRATION RIGHTS. 

The Company may, but shall not be obligated to, register or qualify the sale of Shares under the Securities Act or any other applicable law.
The Company shall not be obligated to take any affirmative action in order to cause the sale of Shares under this Agreement to comply with any law. 

  
 6 








 SECTION 10. RESTRICTIONS ON TRANSFER OF SHARES. 

(a) Securities Law Restrictions. Regardless of whether the offering and sale of Shares under the Plan have been registered under the
Securities Act or have been registered or qualified under the securities laws of any State, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends
on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary or desirable in order to achieve compliance with the Securities Act,
the securities laws of any State or any other law. 
 (b) Market Stand-Off. In connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company’s initial public offering, the Optionee or a Transferee shall not directly or indirectly sell, make any short
sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing
transactions with respect to, any Shares acquired under this Agreement without the prior written consent of the Company or its managing underwriter. Such restriction (the “Market Stand-Off”) shall be in effect for such period of time
following the date of the final prospectus for the offering as may be requested by the Company or such underwriter. In no event, however, shall such period exceed 180 days plus such additional period as may reasonably be requested by the Company or
such underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports or (ii) analyst recommendations and opinions, including (without limitation) the restrictions set forth in
Rule 2711(f)(4) of the National Association of Securities Dealers and Rule 472(f)(4) of the New York Stock Exchange, as amended, or any similar successor rules. The Market Stand-Off shall in any event terminate two years after the date of
the Company’s initial public offering. In the event of the declaration of a stock dividend, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company’s outstanding securities without receipt of consideration, any new, substituted or additional securities which are by reason of such transaction distributed with respect to any Shares subject to the Market Stand-Off, or
into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off. In order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with respect to the Shares acquired under this
Agreement until the end of the applicable stand-off period. The Company’s underwriters shall be beneficiaries of the agreement set forth in this Subsection (b). This Subsection (b) shall not apply to Shares registered in the public
offering under the Securities Act. 
 (c) Investment Intent at Grant. The Optionee represents and agrees that the Shares to be
acquired upon exercising this option will be acquired for investment, and not with a view to the sale or distribution thereof. 
 (d)
Investment Intent at Exercise. In the event that the sale of Shares under the Plan is not registered under the Securities Act but an exemption is available that requires an investment representation or other representation, the Optionee shall
represent and agree at the time of exercise that the Shares being acquired upon exercising this option are being acquired for investment, and not with a view to the sale or distribution thereof, and shall make such other representations as are
deemed necessary or appropriate by the Company and its counsel. 

  
 7 








 (e) Legends. All certificates evidencing Shares purchased under this Agreement shall bear
the following legend: 
 “THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF,
EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL UPON AN
ATTEMPTED TRANSFER OF THE SHARES. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.” 

All certificates evidencing Shares purchased under this Agreement in an unregistered transaction shall bear the following legend (and such other restrictive
legends as are required or deemed advisable under the provisions of any applicable law): 
 “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED.” 
 (f) Removal of Legends. If, in the opinion of the Company and its counsel, any legend placed on
a stock certificate representing Shares sold under this Agreement is no longer required, the holder of such certificate shall be entitled to exchange such certificate for a certificate representing the same number of Shares but without such legend.

 (g) Administration. Any determination by the Company and its counsel in connection with any of the matters set forth in this
Section 10 shall be conclusive and binding on the Optionee and all other persons. 
 SECTION 11. ADJUSTMENT OF SHARES. 

In the event of any transaction described in Section 8(a) of the Plan, the terms of this option (including, without limitation, the number
and kind of Shares subject to this option and the Exercise Price) shall be adjusted as set forth in Section 8(a) of the Plan. In the event that the Company is a party to a merger or consolidation, this option shall be subject to the agreement
of merger or consolidation, as provided in Section 8(b) of the Plan. 
 SECTION 12. MISCELLANEOUS PROVISIONS. 

(a) Rights as a Stockholder. Neither the Optionee nor the Optionee’s representative shall have any rights as a stockholder with
respect to any Shares subject to this option until the Optionee or the Optionee’s representative becomes entitled to receive such Shares by filing a notice of exercise and paying the Purchase Price pursuant to Sections 4 and 5. 

  
 8 








 (b) No Retention Rights. Nothing in this option or in the Plan shall confer upon the
Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Optionee) or of the Optionee, which
rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause. 
 (c)
Notice. Any notice required by the terms of this Agreement shall be given in writing. It shall be deemed effective upon (i) personal delivery, (ii) deposit with the United States Postal Service, by registered or certified mail, with
postage and fees prepaid or (iii) deposit with Federal Express Corporation, with shipping charges prepaid. Notice shall be addressed to the Company at its principal executive office and to the Optionee at the address that he or she most
recently provided to the Company in accordance with this Subsection (c). 
 (d) Modifications and Waivers. No provision of this
Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Optionee and by an authorized officer of the Company (other than the Optionee). No waiver by either party of any
breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. 

(e) Entire Agreement. The Notice of Stock Option Grant, this Agreement and the Plan constitute the entire contract between the parties
hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) that relate to the subject matter hereof. 

(f) Choice of Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, as such
laws are applied to contracts entered into and performed in such State. 
 SECTION 13. ACKNOWLEDGEMENTS OF THE OPTIONEE. 

(a) Tax Consequences. The Optionee agrees that the Company does not have a duty to design or administer the Plan or its other
compensation programs in a manner that minimizes the Optionee’s tax liabilities. The Optionee shall not make any claim against the Company or its Board of Directors, officers or employees related to tax liabilities arising from this option or
the Optionee’s other compensation. In particular, the Optionee acknowledges that this option is exempt from Section 409A of the Code only if the Exercise Price is at least equal to the Fair Market Value per Share on the Date of Grant.
Since Shares are not traded on an established securities market, the determination of their Fair Market Value is made by the Board of Directors or by an independent valuation firm retained by the Company. The Optionee acknowledges that there is no
guarantee in either case that the Internal Revenue Service will agree with the valuation, and the Optionee shall not make any claim against the Company or its Board of Directors, officers or employees in the event that the Internal Revenue Service
asserts that the valuation was too low. 

  
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 (b) Electronic Delivery of Documents. The Optionee agrees to accept by email all documents
relating to the Company, the Plan or this option and all other documents that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission). The
Optionee also agrees that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a website, it shall notify the
Optionee by email of their availability. The Optionee acknowledges that he or she may incur costs in connection with electronic delivery, including the cost of accessing the internet and printing fees, and that an interruption of internet access may
interfere with his or her ability to access the documents. This consent shall remain in effect until this option expires or until the Optionee gives the Company written notice that it should deliver paper documents. 

(c) No Notice of Expiration Date. The Optionee agrees that the Company and its officers, employees, attorneys and agents do not have any
obligation to notify him or her prior to the expiration of this option pursuant to Section 6, regardless of whether this option will expire at the end of its full term or on an earlier date related to the termination of the Optionee’s
Service. The Optionee further agrees that he or she has the sole responsibility for monitoring the expiration of this option and for exercising this option, if at all, before it expires. This Subsection (c) shall supersede any contrary
representation that may have been made, orally or in writing, by the Company or by an officer, employee, attorney or agent of the Company. 
 SECTION 14.
DEFINITIONS. 
 (a) “Agreement” shall mean this Stock Option Agreement. 

(b) “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time or, if a Committee
has been appointed, such Committee. 
 (c) “Cause” shall mean: 

(i) An unauthorized use or disclosure by the Optionee of the Company’s confidential information or trade secrets, which
use or disclosure causes material harm to the Company; 
 (ii) A material breach by the Optionee of any agreement between the
Optionee and the Company; 
 (iii) A material failure by the Optionee to comply with the Company’s written policies or
rules; 
 (iv) The Optionee’s conviction of, or plea of “guilty” or “no contest” to, a felony under
the laws of the United States or any State thereof; 
 (v) The Optionee’s gross negligence or willful misconduct; 

  
 10 








 (vi) A continuing failure by the Optionee to perform assigned duties after
receiving written notification of such failure from the Board of Directors; or 
 (vii) A failure by the Optionee 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 the Optionee’s cooperation. 

(d) “Change in Control’ shall mean (i) the acquisition of the Company by another entity by means of any transaction or
series of related transaction (including, without limitation, any reorganization, merger, stock purchase or consolidation) or (ii) a sale of all or substantially all of the assets of the Company; unless the Company’s stockholders of record
as constituted immediately prior to any such transaction will, immediately after such transaction (by virtue of securities issued as consideration for the Company’s capital stock, assets or otherwise) hold more than 50% of the voting power of
the surviving or acquiring entity. 
 (e) “Code” shall mean the Internal Revenue Code of 1986, as amended. 

(f) “Committee” shall mean a committee of the Board of Directors, as described in Section 2 of the Plan. 

(g) “Company” shall mean Tobira Therapeutics, Inc., a Delaware corporation. 

(h) “Consultant” shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant
or advisor, excluding Employees and Outside Directors. 
 (i) “Date of Grant” shall mean the date of grant specified in the
Notice of Stock Option Grant, which date shall be the later of (i) the date on which the Board of Directors resolved to grant this option or (ii) the first day of the Optionee’s Service. 

(j) “Disability” shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment. 
 (k) “Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary. 
 (l) “Exercise Price”
shall mean the amount for which one Share may be purchased upon exercise of this option, as specified in the Notice of Stock Option Grant. 

(m) “Fair Market Value” shall mean the fair market value of a Share, as determined by the Board of Directors in good faith.
Such determination shall be conclusive and binding on all persons. 
 (n) “Good Reason” shall mean that the Optionee resigns
within 12 months after one of the following conditions has come into existence without his or her consent: 

  
 11 








 (i) A reduction in the Optionee’s base salary by more than 10%; 

(ii) A material diminution of the Optionee’s authority, duties or responsibilities; or 

(iii) A relocation of the Optionee’s principal workplace by more than 50 miles. 

A condition shall not be considered “Good Reason” unless the Optionee gives the Company written notice of such condition within 90 days after such
condition comes into existence and the Company fails to remedy such condition within 30 days after receiving the Optionee’s written notice. 

(o) “Immediate Family” shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and shall include adoptive relationships. 
 (p)
“Involuntary Termination” shall mean the termination of the Optionee’s Service by reason of: 
 (i) The
involuntary discharge of the Optionee by the Company (or the Parent or Subsidiary employing him or her) for reasons other than Cause, death or Disability; or 

(ii) The voluntary resignation of the Optionee for Good Reason. 

(q) “ISO” shall mean an employee incentive stock option described in Section 422(b) of the Code. 

(r) “Notice of Stock Option Grant” shall mean the document so entitled to which this Agreement is attached. 

(s) “NSO” shall mean a stock option not described in Sections 422(b) or 423(b) of the Code. 

(t) “Optionee” shall mean the person named in the Notice of Stock Option Grant. 

(u) “Outside Director” shall mean a member of the Board of Directors who is not an Employee. 

(v) “Parent” shall mean 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. 

  
 12 








 (w) “Plan” shall mean the Tobira Therapeutics, Inc. 2010 Stock Plan, as in
effect on the Date of Grant. 
 (x) “Purchase Price” shall mean the Exercise Price multiplied by the number of Shares with
respect to which this option is being exercised. 
 (y) “Right of First Refusal” shall mean the Company’s right of
first refusal described in Section 7. 
 (z) “Securities Act” shall mean the Securities Act of 1933, as amended. 

(aa) “Service” shall mean service as an Employee, Outside Director or Consultant. 

(bb) “Share” shall mean one share of Stock, as adjusted in accordance with Section 8 of the Plan (if applicable). 

(cc) “Stock” shall mean the Common Stock of the Company. 

(dd) “Subsidiary” shall mean 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. 

(ee) “Transferee” shall mean any person to whom the Optionee has directly or indirectly transferred any Share acquired under
this Agreement. 
 (ff) “Transfer Notice” shall mean the notice of a proposed transfer of Shares described in
Section 7. 

  
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 TOBIRA THERAPEUTICS, INC. 2010
STOCK PLAN 
 NOTICE OF STOCK OPTION
GRANT (EARLY EXERCISE) 
 The Optionee has been granted the following option to purchase shares of the
Common Stock of Tobira Therapeutics, Inc.: 
  

			
	Name of Optionee:	  	«Name»
		
	Total Number of Shares:	  	«TotalShares»
		
	Type of Option:	  	«ISO» Incentive Stock Option (ISO)
		
		  	«NSO» Nonstatutory Stock Option (NSO)
		
	Exercise Price per Share:	  	$«PricePerShare»
		
	Date of Grant:	  	«DateGrant»
		
	Date Exercisable:	  	This option may be exercised at any time after the Date of Grant for all or any part of the Shares subject to this option.
		
	Vesting Commencement Date:	  	«VestComDate»
		
	Vesting Schedule:	  	The Right of Repurchase shall lapse with respect to the first twenty-five percent (25%) of the Shares subject to this option when the Optionee completes twelve (12) months of continuous Service beginning with the Vesting
Commencement Date set forth above. The Right of Repurchase shall lapse with respect to an additional 1/36th of the total number of Shares subject to this option when the Optionee completes each
month of continuous Service thereafter.
		
	Expiration Date:	  	«ExpDate». This option expires earlier if the Optionee’s Service terminates earlier, as provided in Section 6 of the Stock Option Agreement.

 By signing below, the Optionee and the Company agree that this option is granted under, and governed by the terms and
conditions of, the 2010 Stock Plan and the Stock Option Agreement. Both of these documents are attached to, and made a part of, this Notice of Stock Option Grant. Section 14 of the Stock Option Agreement includes important acknowledgements
of the Optionee. 
  

					
	OPTIONEE:	    	TOBIRA THERAPEUTICS, INC.
			
	 	    	By:	 	 
		    	Title:	 	 








 THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE EXERCISE THEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED. 
 TOBIRA THERAPEUTICS, INC. 2010 STOCK
PLAN: 
 STOCK OPTION AGREEMENT 

SECTION 1. GRANT OF OPTION. 
 (a)
Option. On the terms and conditions set forth in the Notice of Stock Option Grant and this Agreement, the Company grants to the Optionee on the Date of Grant the option to purchase at the Exercise Price the number of Shares set forth in the
Notice of Stock Option Grant. The Exercise Price is agreed to be at least 100% of the Fair Market Value per Share on the Date of Grant (110% of Fair Market Value if this option is designated as an ISO in the Notice of Stock Option Grant and
Section 3(b) of the Plan applies). This option is intended to be an ISO or an NSO, as provided in the Notice of Stock Option Grant. 

(b) $100,000 Limitation. Even if this option is designated as an ISO in the Notice of Stock Option Grant, it shall be deemed to be an
NSO to the extent (and only to the extent) required by the $100,000 annual limitation under Section 422(d) of the Code. 
 (c) Stock
Plan and Defined Terms. This option is granted pursuant to the Plan, a copy of which the Optionee acknowledges having received. The provisions of the Plan are incorporated into this Agreement by this reference. Capitalized terms are defined in
Section 15 of this Agreement. 
 SECTION 2. RIGHT TO EXERCISE. 

(a) Exercisability. Subject to Subsection (b) below and the other conditions set forth in this Agreement, all or part of this
option may be exercised prior to its expiration at the time or times set forth in the Notice of Stock Option Grant. Shares purchased by exercising this option may be subject to the Right of Repurchase under Section 7. 

(b) Stockholder Approval. Any other provision of this Agreement notwithstanding, no portion of this option shall be exercisable at any
time prior to the approval of the Plan by the Company’s stockholders. 







 SECTION 3. NO TRANSFER OR ASSIGNMENT OF OPTION. 

Except as otherwise provided in this Agreement, this option and the rights and privileges conferred hereby shall not be sold, pledged or
otherwise transferred (whether by operation of law or otherwise) and shall not be subject to sale under execution, attachment, levy or similar process. 

SECTION 4. EXERCISE PROCEDURES. 
 (a)
Notice of Exercise. The Optionee or the Optionee’s representative may exercise this option by giving written notice to the Company pursuant to Section 13(c). The notice shall specify the election to exercise this option, the number
of Shares for which it is being exercised and the form of payment. The person exercising this option shall sign the notice. In the event that this option is being exercised by the representative of the Optionee, the notice shall be accompanied by
proof (satisfactory to the Company) of the representative’s right to exercise this option. The Optionee or the Optionee’s representative shall deliver to the Company, at the time of giving the notice, payment in a form permissible under
Section 5 for the full amount of the Purchase Price. In the event of a partial exercise of this option, Shares shall be deemed to have been purchased in the order in which they vest in accordance with the Notice of Stock Option Grant. 

(b) Issuance of Shares. After receiving a proper notice of exercise, the Company shall cause to be issued one or more certificates
evidencing the Shares for which this option has been exercised. Such Shares shall be registered (i) in the name of the person exercising this option, (ii) in the names of such person and his or her spouse as community property or as joint
tenants with the right of survivorship or (iii) with the Company’s consent, in the name of a revocable trust. In the case of Restricted Shares, the Company shall cause such certificates to be deposited in escrow under Section 7(c). In
the case of other Shares, the Company shall cause such certificates to be delivered to or upon the order of the person exercising this option. 

(c) Withholding Taxes. In the event that the Company determines that it is required to withhold any tax as a result of the exercise of
this option, the Optionee, as a condition to the exercise of this option, shall make arrangements satisfactory to the Company to enable it to satisfy all withholding requirements. The Optionee shall also make arrangements satisfactory to the Company
to enable it to satisfy any withholding requirements that may arise in connection with the vesting or disposition of Shares purchased by exercising this option. 

SECTION 5. PAYMENT FOR STOCK. 
 (a)
Cash. All or part of the Purchase Price may be paid in cash or cash equivalents. 
 (b) Surrender of Stock. At the discretion
of the Board of Directors, all or any part of the Purchase Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer
and shall be valued at their Fair Market Value as of the date when this option is exercised. 

  
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 (c) Exercise/Sale. All or part of the Purchase Price and any withholding taxes may be paid
by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company. However, payment pursuant to this
Subsection (c) shall be permitted only if (i) Stock then is publicly traded and (ii) such payment does not violate applicable law. 

SECTION 6. TERM AND EXPIRATION. 
 (a)
Basic Term. This option shall in any event expire on the expiration date set forth in the Notice of Stock Option Grant, which date is 10 years after the Date of Grant (five years after the Date of Grant if this option is designated as an ISO
in the Notice of Stock Option Grant and Section 3(b) of the Plan applies). 
 (b) Termination of Service (Except by Death). If
the Optionee’s Service terminates for any reason other than death, then this option shall expire on the earliest of the following occasions: 

(i) The expiration date determined pursuant to Subsection (a) above; 

(ii) The date three months after the termination of the Optionee’s Service for any reason other than Disability; or 

(iii) The date six months after the termination of the Optionee’s Service by reason of Disability. 

The Optionee may exercise all or part of this option at any time before its expiration under the preceding sentence, but only to the extent that this option
is exercisable for vested Shares on or before the date when the Optionee’s Service terminates. When the Optionee’s Service terminates, this option shall expire immediately with respect to the number of Shares for which this option is not
yet exercisable and with respect to any Restricted Shares. In the event that the Optionee dies after termination of Service but before the expiration of this option, all or part of this option may be exercised (prior to expiration) by the executors
or administrators of the Optionee’s estate or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that this option was exercisable for vested Shares on
or before the date when the Optionee’s Service terminated. 
 (c) Death of the Optionee. If the Optionee dies while in Service,
then this option shall expire on the earlier of the following dates: 
 (i) The expiration date determined pursuant to
Subsection (a) above; or 
 (ii) The date 12 months after the Optionee’s death. 

  
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 All or part of this option may be exercised at any time before its expiration under the preceding sentence by the
executors or administrators of the Optionee’s estate or by any person who has acquired this option directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that this option is exercisable for vested
Shares on or before the date of the Optionee’s death. When the Optionee dies, this option shall expire immediately with respect to the number of Shares for which this option is not yet exercisable and with respect to any Restricted Shares. 

(d) Part-Time Employment and Leaves of Absence. If the Optionee commences working on a part-time basis, then the Company may adjust the
vesting schedule set forth in the Notice of Stock Option Grant. If the Optionee goes on a leave of absence, then the Company may adjust the vesting schedule set forth in the Notice of Stock Option Grant in accordance with the Company’s leave of
absence policy or the terms of such leave. Except as provided in the preceding sentence, Service shall be deemed to continue for any purpose under this Agreement while the Optionee is on a bona fide leave of absence, if (i) such leave was
approved by the Company in writing and (ii) continued crediting of Service for such purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company). Service shall be deemed to terminate when such
leave ends, unless the Optionee immediately returns to active work. 
 (e) Notice Concerning ISO Treatment. Even if this option is
designated as an ISO in the Notice of Stock Option Grant, it ceases to qualify for favorable tax treatment as an ISO to the extent that it is exercised: 

(i) More than three months after the date when the Optionee ceases to be an Employee for any reason other than death or
permanent and total disability (as defined in Section 22(e)(3) of the Code); 
 (ii) More than 12 months after the date
when the Optionee ceases to be an Employee by reason of permanent and total disability (as defined in Section 22(e)(3) of the Code); or 

(iii) More than three months after the date when the Optionee has been on a leave of absence for 90 days, unless the
Optionee’s reemployment rights following such leave were guaranteed by statute or by contract. 
 SECTION 7. RIGHT OF REPURCHASE. 

(a) Scope of Repurchase Right. Until they vest in accordance with the Notice of Stock Option Grant and Subsection (b) below, the
Shares acquired under this Agreement shall be Restricted Shares and shall be subject to the Company’s Right of Repurchase. The Company, however, may decline to exercise its Right of Repurchase or may exercise its Right of Repurchase only with
respect to a portion of the Restricted Shares. The Company may exercise its Right of Repurchase only during the Repurchase Period following the termination of the Optionee’s Service, but the Right of Repurchase may be exercised automatically
under Subsection (d) below. If the Right of Repurchase is exercised, the Company shall pay the Optionee an amount equal to the lower of (i) the Exercise Price of each Restricted Share being repurchased or (ii) the Fair Market Value of
such Restricted Share at the time the Right of Repurchase is exercised. 

  
 4 








 (b) Lapse of Repurchase Right. The Right of Repurchase shall lapse with respect to the
Restricted Shares in accordance with the vesting schedule set forth in the Notice of Stock Option Grant. 
 (c) Escrow. Upon issuance,
the certificate(s) for Restricted Shares shall be deposited in escrow with the Company to be held in accordance with the provisions of this Agreement. Any additional or exchanged securities or other property described in Subsection (f) below
shall immediately be delivered to the Company to be held in escrow. All ordinary cash dividends on Restricted Shares (or on other securities held in escrow) shall be paid directly to the Optionee and shall not be held in escrow. Restricted Shares,
together with any other assets held in escrow under this Agreement, shall be (i) surrendered to the Company for repurchase upon exercise of the Right of Repurchase or the Right of First Refusal or (ii) released to the Optionee upon his or
her request to the extent that the Shares have ceased to be Restricted Shares (but not more frequently than once every six months). In any event, all Shares that have ceased to be Restricted Shares, together with any other vested assets held in
escrow under this Agreement, shall be released within 90 days after the earlier of (i) the termination of the Optionee’s Service or (ii) the lapse of the Right of First Refusal. 

(d) Exercise of Repurchase Right. The Company shall be deemed to have exercised its Right of Repurchase automatically for all Restricted
Shares as of the commencement of the Repurchase Period, unless the Company during the Repurchase Period notifies the holder of the Restricted Shares pursuant to Section 13(c) that it will not exercise its Right of Repurchase for some or all of
the Restricted Shares. The Company shall pay to the holder of the Restricted Shares the purchase price determined under Subsection (a) above for the Restricted Shares being repurchased. Payment shall be made in cash or cash equivalents and/or
by canceling indebtedness to the Company incurred by the Optionee in the purchase of the Restricted Shares. The certificate(s) representing the Restricted Shares being repurchased shall be delivered to the Company. 

(e) Termination of Rights as Stockholder. If the Right of Repurchase is exercised in accordance with this Section 7 and the Company
makes available the consideration for the Restricted Shares being repurchased, then the person from whom the Restricted Shares are repurchased shall no longer have any rights as a holder of the Restricted Shares (other than the right to receive
payment of such consideration). Such Restricted Shares shall be deemed to have been repurchased pursuant to this Section 7, whether or not the certificate(s) for such Restricted Shares have been delivered to the Company or the consideration for
such Restricted Shares has been accepted. 
 (f) Additional or Exchanged Securities and Property. In the event of a merger or
consolidation of the Company with or into another entity, any other corporate reorganization, a stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities, any securities or other property (including cash or cash equivalents)
that are by reason of such transaction exchanged for, or distributed with respect to, any Restricted Shares shall immediately be subject to the Right of Repurchase. Appropriate adjustments to reflect the exchange or distribution of such securities
or property shall be made to the number and/or class of the Restricted Shares. Appropriate adjustments shall also be made to the price per share to be paid upon the exercise of the Right 

  
 5 








 
of Repurchase, provided that the aggregate purchase price payable for the Restricted Shares shall remain the same. In the event of a merger or consolidation of the Company with or into another
entity or any other corporate reorganization, the Right of Repurchase may be exercised by the Company’s successor. 
 (g) Transfer of
Restricted Shares. The Optionee shall not transfer, assign, encumber or otherwise dispose of any Restricted Shares without the Company’s written consent, except as provided in the following sentence. The Optionee may transfer Restricted
Shares to one or more members of the Optionee’s Immediate Family or to a trust established by the Optionee for the benefit of the Optionee and/or one or more members of the Optionee’s Immediate Family, provided in either case that the
Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement. If the Optionee transfers any Restricted Shares, then this Agreement shall apply to the Transferee to the same extent as to the
Optionee. 
 (h) Assignment of Repurchase Right. The Board of Directors may freely assign the Company’s Right of Repurchase, in
whole or in part. Any person who accepts an assignment of the Right of Repurchase from the Company shall assume all of the Company’s rights and obligations under this Section 7. 

SECTION 8. RIGHT OF FIRST REFUSAL. 
 (a)
Right of First Refusal. In the event that the Optionee proposes to sell, pledge or otherwise transfer to a third party any Shares acquired under this Agreement, or any interest in such Shares, the Company shall have the Right of First Refusal
with respect to all (and not less than all) of such Shares. If the Optionee desires to transfer Shares acquired under this Agreement, the Optionee shall give a written Transfer Notice to the Company describing fully the proposed transfer, including
the number of Shares proposed to be transferred, the proposed transfer price, the name and address of the proposed Transferee and proof satisfactory to the Company that the proposed sale or transfer will not violate any applicable federal, State or
foreign securities laws. The Transfer Notice shall be signed both by the Optionee and by the proposed Transferee and must constitute a binding commitment of both parties to the transfer of the Shares. The Company shall have the right to purchase
all, and not less than all, of the Shares on the terms of the proposal described in the Transfer Notice (subject, however, to any change in such terms permitted under Subsection (b) below) by delivery of a notice of exercise of the Right of
First Refusal within 30 days after the date when the Transfer Notice was received by the Company. 
 (b) Transfer of Shares. If the
Company fails to exercise its Right of First Refusal within 30 days after the date when it received the Transfer Notice, the Optionee may, not later than 90 days following receipt of the Transfer Notice by the Company, conclude a transfer
of the Shares subject to the Transfer Notice on the terms and conditions described in the Transfer Notice, provided that any such sale is made in compliance with applicable federal, State and foreign securities laws and not in violation of any other
contractual restrictions to which the Optionee is bound. Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by the Optionee,


  
 6 








 
shall again be subject to the Right of First Refusal and shall require compliance with the procedure described in Subsection (a) above. If the Company exercises its Right of First Refusal,
the parties shall consummate the sale of the Shares on the terms set forth in the Transfer Notice within 60 days after the date when the Company received the Transfer Notice (or within such longer period as may have been specified in the
Transfer Notice); provided, however, that in the event the Transfer Notice provided that payment for the Shares was to be made in a form other than cash or cash equivalents paid at the time of transfer, the Company shall have the option of paying
for the Shares with cash or cash equivalents equal to the present value of the consideration described in the Transfer Notice. 
 (c)
Additional or Exchanged Securities and Property. In the event of a merger or consolidation of the Company with or into another entity, any other corporate reorganization, a stock split, the declaration of a stock dividend, the declaration of
an extraordinary dividend payable in a form other than stock, a spin-off, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities, any
securities or other property (including cash or cash equivalents) that are by reason of such transaction exchanged for, or distributed with respect to, any Shares subject to this Section 8 shall immediately be subject to the Right of First
Refusal. Appropriate adjustments to reflect the exchange or distribution of such securities or property shall be made to the number and/or class of the Shares subject to this Section 8. 

(d) Termination of Right of First Refusal. Any other provision of this Section 8 notwithstanding, in the event that the Stock is
readily tradable on an established securities market when the Optionee desires to transfer Shares, the Company shall have no Right of First Refusal, and the Optionee shall have no obligation to comply with the procedures prescribed by
Subsections (a) and (b) above. 
 (e) Permitted Transfers. This Section 8 shall not apply to (i) a transfer by
beneficiary designation, will or intestate succession or (ii) a transfer to one or more members of the Optionee’s Immediate Family or to a trust established by the Optionee for the benefit of the Optionee and/or one or more members of the
Optionee’s Immediate Family, provided in either case that the Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement. If the Optionee transfers any Shares acquired under this Agreement,
either under this Subsection (e) or after the Company has failed to exercise the Right of First Refusal, then this Agreement shall apply to the Transferee to the same extent as to the Optionee. 

(f) Termination of Rights as Stockholder. If the Company makes available, at the time and place and in the amount and form provided in
this Agreement, the consideration for the Shares to be purchased in accordance with this Section 8, then after such time the person from whom such Shares are to be purchased shall no longer have any rights as a holder of such Shares (other than
the right to receive payment of such consideration in accordance with this Agreement). Such Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether or not the certificate(s) therefor have been
delivered as required by this Agreement. 

  
 7 








 (g) Assignment of Right of First Refusal. The Board of Directors may freely assign the
Company’s Right of First Refusal, in whole or in part. Any person who accepts an assignment of the Right of First Refusal from the Company shall assume all of the Company’s rights and obligations under this Section 8. 

SECTION 9. LEGALITY OF INITIAL ISSUANCE. 

No Shares shall be issued upon the exercise of this option unless and until the Company has determined that: 

(a) It and the Optionee have taken any actions required to register the Shares under the Securities Act or to perfect an
exemption from the registration requirements thereof; 
 (b) Any applicable listing requirement of any stock exchange or
other securities market on which Stock is listed has been satisfied; and 
 (c) Any other applicable provision of federal,
State or foreign law has been satisfied. 
 SECTION 10. NO REGISTRATION RIGHTS. 

The Company may, but shall not be obligated to, register or qualify the sale of Shares under the Securities Act or any other applicable law.
The Company shall not be obligated to take any affirmative action in order to cause the sale of Shares under this Agreement to comply with any law. 

SECTION 11. RESTRICTIONS ON TRANSFER OF SHARES. 

(a) Securities Law Restrictions. Regardless of whether the offering and sale of Shares under the Plan have been registered under the
Securities Act or have been registered or qualified under the securities laws of any State, the Company at its discretion may impose restrictions upon the sale, pledge or other transfer of such Shares (including the placement of appropriate legends
on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such restrictions are necessary or desirable in order to achieve compliance with the Securities Act,
the securities laws of any State or any other law. 
 (b) Market Stand-Off. In connection with any underwritten public offering by
the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, including the Company’s initial public offering, the Optionee or a Transferee shall not directly or indirectly sell, make any
short sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing
transactions with respect to, any Shares acquired under this Agreement without the prior written consent of the Company or its managing underwriter. Such restriction (the “Market Stand-Off”) shall be in effect for such period of time
following the date of the final prospectus for the offering as may be requested by the Company or such underwriter. In no event, however, shall such period exceed 180 days plus such additional period as may reasonably be requested by the


  
 8 








 
Company or such underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports or (ii) analyst recommendations and opinions,
including (without limitation) the restrictions set forth in Rule 2711(f)(4) of the National Association of Securities Dealers and Rule 472(f)(4) of the New York Stock Exchange, as amended, or any similar successor rules. The Market
Stand-Off shall in any event terminate two years after the date of the Company’s initial public offering. In the event of the declaration of a stock dividend, a spin-off, a stock split, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities without receipt of consideration, any new, substituted or additional securities which are by reason of such transaction distributed
with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to the Market Stand-Off. In order to enforce the Market Stand-Off, the Company may impose stop-transfer
instructions with respect to the Shares acquired under this Agreement until the end of the applicable stand-off period. The Company’s underwriters shall be beneficiaries of the agreement set forth in this Subsection (b). This
Subsection (b) shall not apply to Shares registered in the public offering under the Securities Act. 
 (c) Investment Intent at
Grant. The Optionee represents and agrees that the Shares to be acquired upon exercising this option will be acquired for investment, and not with a view to the sale or distribution thereof. 

(d) Investment Intent at Exercise. In the event that the sale of Shares under the Plan is not registered under the Securities Act but an
exemption is available that requires an investment representation or other representation, the Optionee shall represent and agree at the time of exercise that the Shares being acquired upon exercising this option are being acquired for investment,
and not with a view to the sale or distribution thereof, and shall make such other representations as are deemed necessary or appropriate by the Company and its counsel. 

(e) Legends. All certificates evidencing Shares purchased under this Agreement shall bear the following legend: 

“THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH
THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE
SHARES AND CERTAIN REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE COMPANY. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.” 

All certificates evidencing Shares purchased under this Agreement in an unregistered transaction shall bear the following legend (and such other restrictive
legends as are required or deemed advisable under the provisions of any applicable law): 

  
 9 








 “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.” 

(f) Removal of Legends. If, in the opinion of the Company and its counsel, any legend placed on a stock certificate representing Shares
sold under this Agreement is no longer required, the holder of such certificate shall be entitled to exchange such certificate for a certificate representing the same number of Shares but without such legend. 

(g) Administration. Any determination by the Company and its counsel in connection with any of the matters set forth in this
Section 11 shall be conclusive and binding on the Optionee and all other persons. 
 SECTION 12. ADJUSTMENT OF SHARES. 

In the event of any transaction described in Section 8(a) of the Plan, the terms of this option (including, without limitation, the number
and kind of Shares subject to this option and the Exercise Price) shall be adjusted as set forth in Section 8(a) of the Plan. In the event that the Company is a party to a merger or consolidation, this option shall be subject to the agreement
of merger or consolidation, as provided in Section 8(b) of the Plan. 
 SECTION 13. MISCELLANEOUS PROVISIONS. 

(a) Rights as a Stockholder. Neither the Optionee nor the Optionee’s representative shall have any rights as a stockholder with
respect to any Shares subject to this option until the Optionee or the Optionee’s representative becomes entitled to receive such Shares by filing a notice of exercise and paying the Purchase Price pursuant to Sections 4 and 5. 

(b) No Retention Rights. Nothing in this option or in the Plan shall confer upon the Optionee any right to continue in Service for any
period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Optionee) or of the Optionee, which rights are hereby expressly reserved by each, to
terminate his or her Service at any time and for any reason, with or without cause. 
 (c) Notice. Any notice required by the terms of
this Agreement shall be given in writing. It shall be deemed effective upon (i) personal delivery, (ii) deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid or (iii) deposit
with Federal Express Corporation, with shipping charges prepaid. Notice shall be addressed to the Company at its principal executive office and to the Optionee at the address that he or she most recently provided to the Company in accordance with
this Subsection (c). 
 (d) Modifications and Waivers. No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by the Optionee and by an authorized officer of the Company (other than the Optionee). No waiver by either party of any breach of, or of compliance with, any condition
or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. 

  
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 (e) Entire Agreement. The Notice of Stock Option Grant, this Agreement and the Plan
constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written and whether express or implied) that relate to the
subject matter hereof. 
 (f) Choice of Law. This Agreement shall be governed by, and construed in accordance with, the laws of the
State of Delaware, as such laws are applied to contracts entered into and performed in such State. 
 SECTION 14. ACKNOWLEDGEMENTS OF THE OPTIONEE.

 (a) Tax Consequences. The Optionee agrees that the Company does not have a duty to design or administer the Plan or its other
compensation programs in a manner that minimizes the Optionee’s tax liabilities. The Optionee shall not make any claim against the Company or its Board of Directors, officers or employees related to tax liabilities arising from this option or
the Optionee’s other compensation. In particular, the Optionee acknowledges that this option is exempt from Section 409A of the Code only if the Exercise Price is at least equal to the Fair Market Value per Share on the Date of Grant.
Since Shares are not traded on an established securities market, the determination of their Fair Market Value is made by the Board of Directors or by an independent valuation firm retained by the Company. The Optionee acknowledges that there is no
guarantee in either case that the Internal Revenue Service will agree with the valuation, and the Optionee shall not make any claim against the Company or its Board of Directors, officers or employees in the event that the Internal Revenue Service
asserts that the valuation was too low. 
 (b) Electronic Delivery of Documents. The Optionee agrees to accept by email all documents
relating to the Company, the Plan or this option and all other documents that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission). The
Optionee also agrees that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a website, it shall notify the
Optionee by email of their availability. The Optionee acknowledges that he or she may incur costs in connection with electronic delivery, including the cost of accessing the internet and printing fees, and that an interruption of internet access may
interfere with his or her ability to access the documents. This consent shall remain in effect until this option expires or until the Optionee gives the Company written notice that it should deliver paper documents. 

(c) No Notice of Expiration Date. The Optionee agrees that the Company and its officers, employees, attorneys and agents do not have any
obligation to notify him or her prior to the expiration of this option pursuant to Section 6, regardless of whether this option will expire at the end of its full term or on an earlier date related to the termination of the Optionee’s
Service. The Optionee further agrees that he or she has the sole responsibility for monitoring the expiration of this option and for exercising this option, if at all, before it expires. This Subsection (c) shall supersede any contrary
representation that may have been made, orally or in writing, by the Company or by an officer, employee, attorney or agent of the Company. 

  
 11 








 SECTION 15. DEFINITIONS. 

(a) “Agreement” shall mean this Stock Option Agreement. 

(b) “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time or, if a Committee
has been appointed, such Committee. 
 (c) “Code” shall mean the Internal Revenue Code of 1986, as amended. 

(d) “Committee” shall mean a committee of the Board of Directors, as described in Section 2 of the Plan. 

(e) “Company” shall mean Tobira Therapeutics, Inc., a Delaware corporation. 

(f) “Consultant” shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant
or advisor, excluding Employees and Outside Directors. 
 (g) “Date of Grant” shall mean the date of grant specified in the
Notice of Stock Option Grant, which date shall be the later of (i) the date on which the Board of Directors resolved to grant this option or (ii) the first day of the Optionee’s Service. 

(h) “Disability” shall mean that the Optionee is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment. 
 (i) “Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary. 
 (j) “Exercise Price”
shall mean the amount for which one Share may be purchased upon exercise of this option, as specified in the Notice of Stock Option Grant. 

(k) “Fair Market Value” shall mean the fair market value of a Share, as determined by the Board of Directors in good faith.
Such determination shall be conclusive and binding on all persons. 
 (l) “Immediate Family” shall mean any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and shall include adoptive relationships. 

(m) “ISO” shall mean an employee incentive stock option described in Section 422(b) of the Code. 

  
 12 








 (n) “Notice of Stock Option Grant” shall mean the document so entitled to which
this Agreement is attached. 
 (o) “NSO” shall mean a stock option not described in Section 422(b) or 423(b) of
the Code. 
 (p) “Optionee” shall mean the person named in the Notice of Stock Option Grant. 

(q) “Outside Director” shall mean a member of the Board of Directors who is not an Employee. 

(r) “Parent” shall mean 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. 

(s) “Plan” shall mean the Tobira Therapeutics, Inc. 2010 Stock Plan, as in effect on the Date of Grant. 

(t) “Purchase Price” shall mean the Exercise Price multiplied by the number of Shares with respect to which this option is
being exercised. 
 (u) “Repurchase Period” shall mean a period of 90 consecutive days commencing on the date when the
Optionee’s Service terminates for any reason, including (without limitation) death or disability. 
 (v) “Restricted
Share” shall mean a Share that is subject to the Right of Repurchase. 
 (w) “Right of First Refusal” shall mean
the Company’s right of first refusal described in Section 8. 
 (x) “Right of Repurchase” shall mean the
Company’s right of repurchase described in Section 7. 
 (y) “Securities Act” shall mean the Securities Act of
1933, as amended. 
 (z) “Service” shall mean service as an Employee, Outside Director or Consultant. 

(aa) “Share” shall mean one share of Stock, as adjusted in accordance with Section 8 of the Plan (if applicable). 

(bb) “Stock” shall mean the Common Stock of the Company. 

(cc) “Subsidiary” shall mean 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. 

  
 13 








 (dd) “Transferee” shall mean any person to whom the Optionee has directly or
indirectly transferred any Share acquired under this Agreement. 
 (ee) “Transfer Notice” shall mean the notice of a
proposed transfer of Shares described in Section 8. 

  
 14 








 TOBIRA THERAPEUTICS, INC. 2010
STOCK PLAN: 
 SUMMARY OF STOCK GRANT
(FOR SERVICES) 
 The Transferee is acquiring shares of the Common Stock of Tobira Therapeutics, Inc. on the following
terms: 
  

			
	Name of Transferee:	  	«Name»
		
	Total Number of Transferred Shares:	  	«TotalShares»
		
	Date of Transfer:	  	«DateTransfer»
		
	Vesting Commencement Date:	  	«VestComDate»
		
	Vesting Schedule:	  	The Forfeiture Condition shall lapse with respect to the first «Percent»% of the Transferred Shares when the Transferee completes «CliffPeriod» months of continuous Service beginning with the Vesting
Commencement Date set forth above. The Forfeiture Condition shall lapse with respect to an additional «Fraction»% of the Transferred Shares when the Transferee completes each month of continuous Service thereafter.

 By signing below, the Transferee and the Company agree that the acquisition of the Transferred Shares is governed by the terms
and conditions of the 2010 Stock Plan and the Stock Grant Agreement. Both of these documents are attached to, and made a part of, this Summary of Stock Grant. The Transferee agrees to accept by email all documents relating to the Company, the Plan
or this grant and all other documents that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission). The Transferee also agrees that the
Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company. If the Company posts these documents on a website, it shall notify the Transferee by email of their
availability. The Transferee acknowledges that he or she may incur costs in connection with electronic delivery, including the cost of accessing the internet and printing fees, and that an interruption of internet access may interfere with his or
her ability to access the documents. This consent shall remain in effect until the Transferee gives the Company written notice that it should deliver paper documents. 
  

					
	TRANSFEREE:	    	TOBIRA THERAPEUTICS, INC.
			
	 	    	By:	 	 
			
	Address for Mailing Stock Certificate:	    	Title:	 	 
			
	 	    		 	
			
	 	    		 	








 TOBIRA THERAPEUTICS, INC. 2010
STOCK PLAN: 
 STOCK GRANT AGREEMENT 

SECTION 1. ACQUISITION OF SHARES. 
 (a)
Transfer. On the terms and conditions set forth in the Summary of Stock Grant and this Agreement, the Company agrees to transfer to the Transferee the number of Shares set forth in the Summary of Stock Grant. The transfer shall occur at the
offices of the Company on the date of transfer set forth in the Summary of Stock Grant or at such other place and time as the parties may agree. 

(b) Consideration. The Transferee and the Company agree that the Transferred Shares are being issued to the Transferee as consideration
for a portion of the services performed by the Transferee for the Company. The value of such portion is agreed to be not less than 100% of the Fair Market Value of the Transferred Shares. 

(c) Stock Plan and Defined Terms. The transfer of the Transferred Shares is subject to the Plan, a copy of which the Transferee
acknowledges having received. The provisions of the Plan are incorporated into this Agreement by this reference. Capitalized terms are defined in Section 12 of this Agreement. 

SECTION 2. FORFEITURE CONDITION. 
 (a)
Scope of Forfeiture Condition. All Transferred Shares initially shall be Restricted Shares and shall be subject to forfeiture to the Company. The Transferee shall not transfer, assign, encumber or otherwise dispose of any Restricted Shares
without the Company’s written consent, except as provided in the following sentence. The Transferee may transfer Restricted Shares to one or more members of the Transferee’s Immediate Family or to a trust established by the Transferee for
the benefit of the Transferee and/or one or more members of the Transferee’s Immediate Family, provided in either case that the Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement. If
the Transferee transfers any Restricted Shares, then this Agreement shall apply to the Subsequent Transferee to the same extent as to the Transferee. 

(b) Vesting. The Forfeiture Condition shall lapse and the Restricted Shares shall become vested in accordance with the vesting schedule
set forth in the Summary of Stock Grant. 
 (c) Execution of Forfeiture. The Forfeiture Condition shall be applicable only if the
Transferee’s Service terminates for any reason, with or without cause, including (without limitation) death or disability, before all Restricted Shares have become vested. In the event that the Transferee’s Service terminates for any
reason, the certificate(s) representing any remaining Restricted Shares shall be delivered to the Company. The Company shall make no payment for Restricted Shares that are forfeited. 







 (d) Additional Shares or Substituted Securities. In the event of the declaration of a
stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction
affecting the Company’s outstanding securities without receipt of consideration, any new, substituted or additional securities or other property (including money paid other than as an ordinary cash dividend) which are by reason of such
transaction distributed with respect to any Restricted Shares or into which such Restricted Shares thereby become convertible shall immediately be subject to the Forfeiture Condition. Appropriate adjustments to reflect the distribution of such
securities or property shall be made to the number and/or class of the Restricted Shares. 
 (e) Termination of Rights as Stockholder.
If Restricted Shares are forfeited in accordance with this Section 2, then the person who is to forfeit such Restricted Shares shall no longer have any rights as a holder of such Restricted Shares. Such Restricted Shares shall be deemed to have
been forfeited in accordance with the applicable provisions hereof, whether or not the certificate(s) therefor have been delivered as required by this Agreement. 

(f) Escrow. Upon issuance, the certificates for Restricted Shares shall be deposited in escrow with the Company to be held in accordance
with the provisions of this Agreement. Any new, substituted or additional securities or other property described in Subsection (d) above shall immediately be delivered to the Company to be held in escrow, but only to the extent the Transferred
Shares are at the time Restricted Shares. All regular cash dividends on Restricted Shares (or other securities at the time held in escrow) shall be paid directly to the Transferee and shall not be held in escrow. Restricted Shares, together with any
other assets or securities held in escrow hereunder, shall be (i) surrendered to the Company for forfeiture and cancellation in the event that the Forfeiture Condition or Right of First Refusal applies or (ii) released to the Transferee
upon the Transferee’s request to the extent the Transferred Shares are no longer Restricted Shares (but not more frequently than once every six months). In any event, all Transferred Shares that have vested (and any other vested assets and
securities attributable thereto) shall be released within 60 days after the earlier of (i) the termination of the Transferee’s Service or (ii) the lapse of the Right of First Refusal. 

(g) Part-Time Employment and Leaves of Absence. If the Transferee commences working on a part-time basis, then the Company may adjust
the vesting schedule set forth in the Summary of Stock Grant. If the Transferee goes on a leave of absence, then the Company may adjust the vesting schedule set forth in the Summary of Stock Grant in accordance with the Company’s leave of
absence policy or the terms of such leave. Except as provided in the preceding sentence, Service shall be deemed to continue while the Transferee is on a bona fide leave of absence, if (i) such leave was approved by the Company in
writing and (ii) continued crediting of Service is expressly required by the terms of such leave or by applicable law (as determined by the Company). Service shall be deemed to terminate when such leave ends, unless the Transferee immediately
returns to active work. 

  
 2 








 SECTION 3. RIGHT OF FIRST REFUSAL. 

(a) Right of First Refusal. In the event that the Transferee proposes to sell, pledge or otherwise transfer to a third party any
Transferred Shares, or any interest in Transferred Shares, the Company shall have the Right of First Refusal with respect to all (and not less than all) of such Transferred Shares. If the Transferee desires to transfer Transferred Shares, the
Transferee shall give a written Transfer Notice to the Company describing fully the proposed transfer, including the number of Transferred Shares proposed to be transferred, the proposed transfer price, the name and address of the proposed
Subsequent Transferee and proof satisfactory to the Company that the proposed sale or transfer will not violate any applicable federal, State or foreign securities laws. The Transfer Notice shall be signed both by the Transferee and by the proposed
Subsequent Transferee and must constitute a binding commitment of both parties to the transfer of the Transferred Shares. The Company shall have the right to purchase all, and not less than all, of the Transferred Shares on the terms of the proposal
described in the Transfer Notice (subject, however, to any change in such terms permitted under Subsection (b) below) by delivery of a notice of exercise of the Right of First Refusal within 30 days after the date when the Transfer Notice was
received by the Company. 
 (b) Transfer of Shares. If the Company fails to exercise its Right of First Refusal within 30 days
after receiving the Transfer Notice, the Transferee may, not later than 90 days after the Company received the Transfer Notice, conclude a transfer of the Transferred Shares subject to the Transfer Notice on the terms and conditions described
in the Transfer Notice, provided that any such sale is made in compliance with applicable federal, State and foreign securities laws and not in violation of any other contractual restrictions to which the Transferee is bound. Any proposed transfer
on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by the Transferee, shall again be subject to the Right of First Refusal and shall require compliance with the procedure
described in Subsection (a) above. If the Company exercises its Right of First Refusal, the parties shall consummate the sale of the Transferred Shares on the terms set forth in the Transfer Notice within 60 days after the Company received
the Transfer Notice (or within such longer period as may have been specified in the Transfer Notice); provided, however, that in the event the Transfer Notice provided that payment for the Transferred Shares was to be made in a form other than cash
or cash equivalents paid at the time of transfer, the Company shall have the option of paying for the Transferred Shares with cash or cash equivalents equal to the present value of the consideration described in the Transfer Notice. 

(c) Additional or Exchanged Securities and Property. In the event of a merger or consolidation of the Company with or into another
entity, any other corporate reorganization, a stock split, the declaration of a stock dividend, the declaration of an extraordinary dividend payable in a form other than stock, a spin-off, an adjustment in
conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities, any securities or other property (including cash or cash equivalents) that are by reason of such transaction exchanged for, or
distributed with respect to, any Transferred Shares subject to this Section 3 shall immediately be subject to the Right of First Refusal. Appropriate adjustments to reflect the exchange or distribution of such securities or property shall be
made to the number and/or class of the Transferred Shares subject to this Section 3. 

  
 3 








 (d) Termination of Right of First Refusal. Any other provision of this Section 3
notwithstanding, in the event that the Stock is readily tradable on an established securities market when the Transferee desires to transfer Transferred Shares, the Company shall have no Right of First Refusal, and the Transferee shall have no
obligation to comply with the procedures prescribed by Subsections (a) and (b) above. 
 (e) Permitted Transfers. This
Section 3 shall not apply to (i) a transfer by beneficiary designation, will or intestate succession or (ii) a transfer to one or more members of the Transferee’s Immediate Family or to a trust established by the Transferee for
the benefit of the Transferee and/or one or more members of the Transferee’s Immediate Family, provided in either case that the Transferee agrees in writing on a form prescribed by the Company to be bound by all provisions of this Agreement. If
the Transferee transfers any Transferred Shares, either under this Subsection (e) or after the Company has failed to exercise the Right of First Refusal, then this Agreement shall apply to the Subsequent Transferee to the same extent as to the
Transferee. 
 (f) Termination of Rights as Stockholder. If the Company makes available, at the time and place and in the amount and
form provided in this Agreement, the consideration for the Shares to be purchased in accordance with this Section 3, then after such time the person from whom such Shares are to be purchased shall no longer have any rights as a holder of such
Shares (other than the right to receive payment of such consideration in accordance with this Agreement). Such Shares shall be deemed to have been purchased in accordance with the applicable provisions hereof, whether or not the certificate(s)
therefor have been delivered as required by this Agreement. 
 (g) Assignment of Right of First Refusal. The Board of Directors may
freely assign the Company’s Right of First Refusal, in whole or in part. Any person who accepts an assignment of the Right of First Refusal from the Company shall assume all of the Company’s rights and obligations under this
Section 3. 
 SECTION 4. OTHER RESTRICTIONS ON TRANSFER. 

(a) Transferee Representations. In connection with the issuance and acquisition of Shares under this Agreement, the Transferee hereby
represents and warrants to the Company as follows: 
 (i) The Transferee is acquiring and will hold the Transferred Shares
for investment for his or her account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act. 

(ii) The Transferee understands that the Transferred Shares have not been registered under the Securities Act by reason of a
specific exemption therefrom and that the Transferred Shares must be held indefinitely, unless they are subsequently registered under the Securities Act or the Transferee obtains an opinion of counsel, in form and substance satisfactory to the
Company and its counsel, that such registration is not required. The Transferee further acknowledges and understands that the Company is under no obligation to register the Transferred Shares. 

  
 4 








 (iii) The Transferee is aware of the adoption of Rule 144 by the Securities
and Exchange Commission under the Securities Act, which permits limited public resales of securities acquired in a non-public offering, subject to the satisfaction of certain conditions, including (without limitation) the availability of certain
current public information about the issuer, the resale occurring only after the holding period required by Rule 144 has been satisfied, the sale occurring through an unsolicited “broker’s transaction,” and the amount of
securities being sold during any three-month period not exceeding specified limitations. The Transferee acknowledges and understands that the conditions for resale set forth in Rule 144 have not been
satisfied and that the Company has no plans to satisfy these conditions in the foreseeable future. 
 (iv) The Transferee
will not sell, transfer or otherwise dispose of the Transferred Shares in violation of the Securities Act, the Securities Exchange Act of 1934, or the rules promulgated thereunder, including Rule 144 under the Securities Act. The Transferee
agrees that he or she will not dispose of the Transferred Shares unless and until he or she has complied with all requirements of this Agreement applicable to the disposition of Transferred Shares and he or she has provided the Company with written
assurances, in substance and form satisfactory to the Company, that (A) the proposed disposition does not require registration of the Transferred Shares under the Securities Act or all appropriate action necessary for compliance with the
registration requirements of the Securities Act or with any exemption from registration available under the Securities Act (including Rule 144) has been taken and (B) the proposed disposition will not result in the contravention of any
transfer restrictions applicable to the Transferred Shares under applicable state law. 
 (v) The Transferee has been
furnished with, and has had access to, such information as he or she considers necessary or appropriate for deciding whether to invest in the Transferred Shares, and the Transferee has had an opportunity to ask questions and receive answers from the
Company regarding the terms and conditions of the issuance of the Transferred Shares. 
 (vi) The Transferee is aware that
his or her investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss. The Transferee is able, without impairing his or her financial condition, to hold the Transferred Shares for an
indefinite period and to suffer a complete loss of his or her investment in the Transferred Shares. 
 (b) Securities Law
Restrictions. Regardless of whether the offering and sale of Shares under the Plan have been registered under the Securities Act or have been registered or qualified under the securities laws of any State, the Company at its discretion may
impose restrictions upon the sale, pledge or other transfer of the Transferred Shares (including the 

  
 5 








 
placement of appropriate legends on stock certificates or the imposition of stop-transfer instructions) if, in the judgment of the Company, such
restrictions are necessary or desirable in order to achieve compliance with the Securities Act, the securities laws of any State or any other law. 

(c) Market Stand-Off. In connection with any underwritten public offering by the Company of its equity securities pursuant to an
effective registration statement filed under the Securities Act, including the Company’s initial public offering, the Transferee or a Subsequent Transferee shall not directly or indirectly sell, make any short sale of, loan, hypothecate,
pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing transactions with respect to, any
Transferred Shares without the prior written consent of the Company or its managing underwriter. Such restriction (the “Market Stand-Off”) shall be in effect for such period of time following the date of the final prospectus for the
offering as may be requested by the Company or such underwriter. In no event, however, shall such period exceed 180 days plus such additional period as may reasonably be requested by the Company or such underwriter to accommodate regulatory
restrictions on (i) the publication or other distribution of research reports or (ii) analyst recommendations and opinions, including (without limitation) the restrictions set forth in Rule 2711(f)(4) of the National Association of
Securities Dealers and Rule 472(f)(4) of the New York Stock Exchange, as amended, or any similar successor rules. The Market Stand-Off shall in any event terminate two years after the date of the Company’s initial public offering. In the
event of the declaration of a stock dividend, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company’s outstanding securities
without receipt of consideration, any new, substituted or additional securities which are by reason of such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible,
shall immediately be subject to the Market Stand-Off. In order to enforce the Market Stand-Off, the Company may impose stop-transfer instructions with respect to the Transferred Shares until the end of the applicable stand-off period. The
Company’s underwriters shall be beneficiaries of the agreement set forth in this Subsection (c). This Subsection (c) shall not apply to Shares registered in the public offering under the Securities Act. 

(d) Rights of the Company. The Company shall not be required to (i) transfer on its books any Transferred Shares that have been
sold or transferred in contravention of this Agreement or (ii) treat as the owner of Transferred Shares, or otherwise to accord voting, dividend or liquidation rights to, any Subsequent Transferee to whom Transferred Shares have been
transferred in contravention of this Agreement. 
 SECTION 5. SUCCESSORS AND ASSIGNS. 

Except as otherwise expressly provided to the contrary, the provisions of this Agreement shall inure to the benefit of, and be binding upon,
the Company and its successors and assigns and be binding upon the Transferee and the Transferee’s legal representatives, heirs, legatees, distributees, assigns and transferees by operation of law, whether or not any such person has become a
party to this Agreement or has agreed in writing to join herein and to be bound by the terms, conditions and restrictions hereof. 

  
 6 








 SECTION 6. NO RETENTION RIGHTS. 

Nothing in this Agreement or in the Plan shall confer upon the Transferee any right to continue providing services to the Company for any
period of specific duration or interfere with or otherwise restrict in any way the rights of the Company or of the Transferee, which rights are hereby expressly reserved by each, to terminate his or her service at any time and for any reason, with
or without cause. 
 SECTION 7. TAX ELECTION. 

The acquisition of the Transferred Shares may result in adverse tax consequences that may be avoided or mitigated by filing an election under
Code Section 83(b). Such election may be filed only within 30 days after the date of transfer set forth in the Summary of Stock Grant. The form for making the Code Section 83(b) election is attached to this Agreement as an Exhibit. The
Transferee should consult with his or her tax advisor to determine the tax consequences of acquiring the Transferred Shares and the advantages and disadvantages of filing the Code Section 83(b) election. The Transferee acknowledges that it is
his or her sole responsibility, and not the Company’s, to file a timely election under Code Section 83(b), even if the Transferee requests the Company or its representatives to make this filing on his or her behalf. 

SECTION 8. LEGENDS. 
 All certificates
evidencing Transferred Shares shall bear the following legends: 
 “THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED,
TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE
COMPANY CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES AND IMPOSES CERTAIN FORFEITURE CONDITIONS UPON TERMINATION OF SERVICE WITH THE COMPANY. THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH
AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.” 
 “THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”


  
 7 








 If required by the authorities of any State in connection with the issuance of the Transferred Shares, the legend
or legends required by such State authorities shall also be endorsed on all such certificates. 
 SECTION 9. NOTICE. 

Any notice required by the terms of this Agreement shall be given in writing. It shall be deemed effective upon (i) personal delivery,
(ii) deposit with the United States Postal Service, by registered or certified mail, with postage and fees prepaid or (iii) deposit with Federal Express Corporation, with shipping charges prepaid. Notice shall be addressed to the Company
at its principal executive office and to the Transferee at the address that he or she most recently provided to the Company in accordance with this Section 9. 

SECTION 10. ENTIRE AGREEMENT. 
 The
Summary of Stock Grant, this Agreement and the Plan constitute the entire contract between the parties hereto with regard to the subject matter hereof. They supersede any other agreements, representations or understandings (whether oral or written
and whether express or implied) that relate to the subject matter hereof. 
 SECTION 11. CHOICE OF LAW. 

This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, as such laws are applied to contracts
entered into and performed in such State. 
 SECTION 12. DEFINITIONS. 

(a) “Agreement” shall mean this Stock Grant Agreement. 

(b) “Board of Directors” shall mean the Board of Directors of the Company, as constituted from time to time or, if a Committee
has been appointed, such Committee. 
 (c) “Code” shall mean the Internal Revenue Code of 1986, as amended. 

(d) “Committee” shall mean a committee of the Board of Directors, as described in Section 2 of the Plan. 

(e) “Company” shall mean Tobira Therapeutics, Inc., a Delaware corporation. 

(f) “Consultant” shall mean a person who performs bona fide services for the Company, a Parent or a Subsidiary as a consultant
or advisor, excluding Employees and Outside Directors. 

  
 8 








 (g) “Employee” shall mean any individual who is a
common-law employee of the Company, a Parent or a Subsidiary. 
 (h) “Fair Market
Value” shall mean the fair market value of a Share, as determined by the Board of Directors in good faith. Such determination shall be conclusive and binding on all persons. 

(i) “Forfeiture Condition” shall mean the forfeiture condition described in Section 2. 

(j) “Immediate Family” shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and shall include adoptive relationships. 
 (k)
“Outside Director” shall mean a member of the Board of Directors who is not an Employee. 
 (l) “Parent”
shall mean 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. 
 (m) “Plan” shall mean the Tobira Therapeutics, Inc. 2010 Stock
Plan, as amended. 
 (n) “Restricted Share” shall mean a Transferred Share that is subject to the Forfeiture Condition. 

(o) “Right of First Refusal” shall mean the Company’s right of first refusal described in Section 3. 

(p) “Securities Act” shall mean the Securities Act of 1933, as amended. 

(q) “Service” shall mean service as an Employee, Outside Director or Consultant. 

(r) “Share” shall mean one share of Stock, as adjusted in accordance with Section 8 of the Plan (if applicable). 

(s) “Stock” shall mean the Common Stock of the Company. 

(t) “Subsequent Transferee” shall mean any person to whom the Transferee has directly or indirectly transferred any
Transferred Shares. 
 (u) “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain or
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. 

  
 9 








 (v) “Summary of Stock Grant” shall mean the document so entitled to which this
Agreement is attached. 
 (w) “Transferee” shall mean the individual named in the Summary of Stock Grant. 

(x) “Transfer Notice” shall mean the notice of a proposed transfer of Transferred Shares described in Section 3. 

(y) “Transferred Shares” shall mean the Shares acquired by the Transferee pursuant to this Agreement. 

  
 10 








 EXHIBIT I 

SECTION 83(b) ELECTION 

This statement is made under Section 83(b) of the Internal Revenue Code of 1986, as amended, pursuant to Treasury Regulations
Section 1.83-2. 
  

	 	(1)	The taxpayer who performed the services is: 

 Name:
                                         
                                         
                    
 Address:
                                         
                                         
               

                       
                                         
                                         
          
 Social Security No.:
                                         
                                      

 

	 	(2)	The property with respect to which the election is made is             shares of the common stock of Tobira Therapeutics, Inc. 


 

	 	(3)	The property was transferred on             ,             . 


 

	 	(4)	The taxable year for which the election is made is the calendar year             . 


 

	 	(5)	The property is subject to forfeiture if for any reason taxpayer’s service with the issuer terminates. The forfeiture condition lapses in a series of installments over a
            -year period ending on             ,             .


  

	 	(6)	The fair market value of such property at the time of transfer (determined without regard to any restriction other than a restriction that by its terms will never lapse) is
$            per share. 

  

	 	(7)	No amount was paid for such property. 

  

	 	(8)	A copy of this statement was furnished to Tobira Therapeutics, Inc., for whom taxpayer rendered the services underlying the transfer of such property. 


 

	 	(9)	This statement is executed on             ,             . 


 

					
	  
	  		  	  

	Spouse (if any)	  		  	Taxpayer

 Within 30 days after the date of transfer, this election must be filed with the Internal Revenue Service Center where
the Transferee files his or her federal income tax returns. The filing should be made by registered or certified mail, return receipt requested. The Transferee must (a) file a copy of the completed form with his or her federal tax return for
the current tax year and (b) deliver an additional copy to the Company. 







 TOBIRA THERAPEUTICS, INC. 2010
STOCK PLAN 
 NOTICE OF STOCK OPTION
EXERCISE 
 You must sign this Notice on Page 3 before submitting it to the Company. 

OPTIONEE INFORMATION: 
  

									
	Name:	 	 	 		  	Social Security Number:	  	 
	Address:	 	 	 		  	Employee Number:	  	 
		 	 	 		  		  	

 OPTION INFORMATION: 

 

			
	Date of Grant:                      , 20        	  	Type of Stock Option:
	Exercise Price per Share: $            	  	 ̈  Nonstatutory (NSO)
	 Total number of shares of Common Stock of Tobira Therapeutics, Inc. (the “Company”) covered by the option:

 _________ 
	  	 ̈  Incentive (ISO)

 EXERCISE INFORMATION: 

Number of shares of Common Stock of the Company for which the option is being exercised now:
                    . (These shares are referred to below as the “Purchased Shares.”) 

Total Exercise Price for the Purchased Shares:
$                     
 Form of payment enclosed
[check all that apply]: 
  

	 ̈	Check for $                    , payable to “Tobira Therapeutics, Inc.” 


 

	 ̈	Certificate(s) for                     shares of Common Stock of the Company. These shares will be valued as of the
date this notice is received by the Company. [Requires Company consent.] 

  

	 ̈	Attestation Form covering                     shares of Common Stock of the Company. These shares will be valued as of
the date this notice is received by the Company. [Requires Company consent.] 








 Name(s) in which the Purchased Shares should be registered [please review the attached explanation of the
available forms of ownership, and then check one box]: 
  

					
	  ̈      
	 	In my name only
			
	  ̈      
	 	In the names of my spouse and myself as community property	  	My spouse’s name (if applicable):
			
	  ̈      
	 	In the names of my spouse and myself as community property with the right of survivorship	  	 
			
	  ̈      
	 	In the names of my spouse and myself as joint tenants with the right of survivorship	  	
			
	  ̈      
	 	In the name of an eligible revocable trust [requires Stock Transfer Agreement]	  	Full legal name of revocable trust:
		 		  	 
		 		  	 
		
	The certificate for the Purchased Shares should be sent to the following address:	  	 
		 		  	 
		 		  	 
		 		  	 

 REPRESENTATIONS AND ACKNOWLEDGMENTS OF THE
OPTIONEE: 
  

	1.	I represent and warrant to the Company that I am acquiring and will hold the Purchased Shares for investment for my account only, and not with a view to, or for resale in connection with, any “distribution” of
the Purchased Shares within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). 

  

	2.	I understand that the Purchased Shares have not been registered under the Securities Act by reason of a specific exemption therefrom and that the Purchased Shares must be held indefinitely, unless they are subsequently
registered under the Securities Act or I obtain an opinion of counsel (in form and substance satisfactory to the Company and its counsel) that registration is not required. 


 

	3.	I acknowledge that the Company is under no obligation to register the Purchased Shares. 

  

	4.	I am aware of the adoption by the Securities and Exchange Commission of Rule 144 under the Securities Act, which permits limited public resales of securities acquired in a non-public offering, subject to the
satisfaction of certain conditions. These conditions may include (without limitation) that certain current public information about the issuer be available, that the resale occur only after a holding period required by Rule 144 has been
satisfied, that the sale occur through an unsolicited “broker’s transaction” and that the amount of securities being sold during any three-month period not exceed specified limitations. I understand that the conditions for resale set
forth in Rule 144 have not been satisfied and that the Company is not required to take action to satisfy any conditions applicable to it. 

  

	5.	I will not sell, transfer or otherwise dispose of the Purchased Shares in violation of the Securities Act, the Securities Exchange Act of 1934, or the rules promulgated thereunder, including Rule 144 under the
Securities Act. 

  

	6.	I acknowledge that I have received and had access to such information as I consider necessary or appropriate for deciding whether to invest in the Purchased Shares and that I had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the issuance of the Purchased Shares. 


  
 2 









	7.	I am aware that my investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss. I am able, without impairing my financial condition, to hold the Purchased
Shares for an indefinite period and to suffer a complete loss of my investment in the Purchased Shares. 

  

	8.	I acknowledge that the Purchased Shares remain subject to the Company’s right of first refusal and the market stand-off (sometimes referred to as the “lock-up”), all in accordance with the applicable
Notice of Stock Option Grant and Stock Option Agreement. 

  

	9.	I acknowledge that I am acquiring the Purchased Shares subject to all other terms of the Notice of Stock Option Grant and Stock Option Agreement. 


 

	10.	I acknowledge that I have received a copy of the Company’s explanation of the forms of ownership available for my Purchased Shares. I acknowledge that the Company has encouraged me to consult my own adviser to
determine the form of ownership that is appropriate for me. In the event that I choose to transfer my Purchased Shares to a trust, I agree to sign a Stock Transfer Agreement. In the event that I choose to transfer my Purchased Shares to a trust that
does not satisfy the requirements described in the attached explanation (i.e., a trust that is not an eligible revocable trust), I also acknowledge that the transfer will be treated as a “disposition” for tax purposes. As a result, the
favorable ISO tax treatment will be unavailable and other unfavorable tax consequences may occur. 

  

	11.	I acknowledge that I have received a copy of the Company’s explanation of the federal income tax consequences of an option exercise. I acknowledge that the Company has encouraged me to consult my own adviser to
determine the tax consequences of acquiring the Purchased Shares at this time. 

  

	12.	I agree that the Company does not have a duty to design or administer the 2010 Stock Plan or its other compensation programs in a manner that minimizes my tax liabilities. I will not make any claim against the Company
or its Board of Directors, officers or employees related to tax liabilities arising from my options or my other compensation. In particular, I acknowledge that my options are exempt from section 409A of the Internal Revenue Code only if the
exercise price per share is at least equal to the fair market value per share of the Company’s Common Stock at the time the option was granted by the Company’s Board of Directors. Since shares of the Company’s Common Stock are not
traded on an established securities market, the determination of their fair market value was made by the Company’s Board of Directors or by an independent valuation firm retained by the Company. I acknowledge that there is no guarantee in
either case that the Internal Revenue Service will agree with the valuation, and I will not make any claim against the Company or its Board of Directors, officers or employees in the event that the Internal Revenue Service asserts that the valuation
was too low. 

  

	13.	I agree to seek the consent of my spouse to the extent required by the Company to enforce the foregoing. 

  

					
	SIGNATURE:	 		 	DATE:
			
	   
	 		 	   



  
 3 








 EXPLANATION OF FORMS OF
STOCK OWNERSHIP 
 PURPOSE OF THIS EXPLANATION 

The purpose of this explanation is to provide you with a brief summary of the forms of legal ownership available for the shares that you are purchasing (the
“Purchased Shares”). For a number of reasons, this explanation is no substitute for personal legal advice: 
  

	 	•	 	To make the explanation short and readable, only the highlights are covered. Some legal rules are not addressed, even though they may be important in particular cases. 


 

	 	•	 	While the summary attempts to deal with the most common situations, your own situation may well be different from the norm. 

  

	 	•	 	The law may change, and the Company is not responsible for updating this summary. 

  

	 	•	 	The form in which you own your shares may have a substantial impact on the estate tax treatment that applies to those shares when you die or the income tax treatment that applies when your survivors sell the shares
after your death. 

 FOR THESE REASONS, THE COMPANY
STRONGLY ENCOURAGES YOU TO CONSULT YOUR OWN ADVISER BEFORE EXERCISING YOUR
OPTION AND BEFORE MAKING A DECISION ABOUT THE FORM OF OWNERSHIP FOR
YOUR SHARES. 
 OVERVIEW 

The Notice of Stock Option Exercise offers five forms of taking title to the Purchased Shares: 

 

	 	•	 	In your name only, 

  

	 	•	 	In your name and the name of your spouse as community property, 

  

	 	•	 	In your name and the name of your spouse as community property with the right of survivorship, 

  

	 	•	 	In your name and the name of your spouse as joint tenants with the right of survivorship, or 

  

	 	•	 	In the name of an eligible revocable trust. 

 Title in the Purchased Shares depends upon (a) your marital
status, (b) the marital property laws of your state of residence and (c) any agreement with your spouse altering the existing marital property laws of your state of residence. If you are not married, you generally will take title in your
name alone. If you are married, title depends upon the marital property laws of your state of residence. In general, states are classified either as “community property” states or as “common-law property” states. (But individual
state law may vary within these classifications.) 

  
 4 








 COMMUNITY PROPERTY AND JOINT
TENANCY 
 Community property states include California, Texas, Washington, Arizona, Nevada, New Mexico, Idaho, Louisiana and Wisconsin.
In a community property state, property acquired during marriage by either spouse is presumed to be one-half owned by each spouse. All other property is classified as the separate property of the spouse who acquires the property. While either spouse
has equal management and control over the community property and may sell, spend or encumber all community property, neither spouse may gift community property or partition his/her one-half interest without the consent of the other spouse. Upon
divorce, all community property is divided equally among the spouses and each spouse is entitled to retain all of his/her separate property. Upon the death of a spouse, one-half of the community property (and all of the decedent spouse’s
separate property) will pass to the decedent spouse’s heirs. The other one-half of the community property remains the property of the surviving spouse. 

Other states are common-law property states. In a common-law property state, each spouse is generally deemed to own whatever he/she earns or acquires. 

A married couple may elect to alter the marital property rules by mutually agreeing to take title to property in other forms. For example, a couple residing
in a community property state may generally enter into an agreement and transform what otherwise would be community property into the separate property of the spouse who earns or acquires the property. 

In addition, many community property and common-law property states allow married couples to take joint title in property acquired during marriage. For
example, California allows a married couple to take title in a joint tenancy with the right of survivorship. In a joint tenancy, each spouse owns a one-half interest in the property as separate property. This means that each spouse may transfer or
sell his/her one-half interest in the property while he/she is alive. However, unlike traditional separate property, a spouse cannot transfer his/her one-half interest to heirs at death. Instead, the surviving spouse automatically receives
the decedent spouse’s one-half interest and becomes the full owner of the property. (This is called the “right of survivorship.”) Both spouses must consent to taking property in a joint tenancy in lieu of having the community property
laws apply. 
 California also allows a married couple to take title in the shares as community property with the right of survivorship. This
means that the shares are treated like community property while both spouses are alive. However, if one spouse dies, then the other spouse automatically receives the decedent spouse’s one-half interest and becomes the full owner of the shares.
In other words, the decedent spouse’s will or trust does not control the disposition of the shares. 
 If you have the Purchased Shares
issued in a form other than those described above, then the transfer will be treated as a “disposition” for tax purposes. This means that the effect, for tax purposes, will be the same as selling the Purchased Shares. Please refer to the
attached tax summary for additional information. 

  
 5 








 TRUSTS 

A transfer to a trust generally should not be treated as a “disposition” of the Purchased Shares for tax purposes if the trust satisfies each of the
following conditions: 
  

	 	•	 	You are the sole grantor of the trust, 

  

	 	•	 	You are the sole trustee, or you and your spouse are the sole co-trustees, 

  

	 	•	 	The trustee or trustees are not required to distribute the income of the trust to any person other than you and/or your spouse while you are alive, and 


 

	 	•	 	The trust permits you to revoke all or part of the trust and to have the trust’s assets returned to you, without the consent of any other person (including your spouse). 


If you have the Purchased Shares issued to a trust that does not meet these requirements, then the transfer will be treated as a “disposition” for
tax purposes. This means that the effect, for tax purposes, will be the same as selling the Purchased Shares. Please refer to the attached tax summary for additional information. 

If you have the Purchased Shares issued to any trust, you will be required to sign a Stock Transfer Agreement in your capacity as trustee. Under the Stock
Transfer Agreement, the Purchased Shares remain subject to the Company’s right of first refusal in accordance with the applicable Notice of Stock Option Grant and Stock Option Agreement. 

THE COMPANY WILL NOT CHECK TO DETERMINE
WHETHER THE FORM OF OWNERSHIP THAT YOU ELECT IN YOUR NOTICE OF
STOCK OPTION EXERCISE IS APPROPRIATE. YOU SHOULD CONSULT YOUR OWN ADVISERS
ON THIS SUBJECT. IF AN INAPPROPRIATE ELECTION IS MADE, THE FORM OF
OWNERSHIP MAY NOT WITHSTAND LEGAL SCRUTINY OR MAY HAVE ADVERSE TAX
CONSEQUENCES. 

  
 6 








 EXPLANATION OF U.S. FEDERAL INCOME
TAX CONSEQUENCES 
 (Current as of August 2009) 

PURPOSE OF THIS EXPLANATION 

The purpose of this explanation is to provide you with a brief summary of the tax consequences of exercising your option. For a number of reasons, this
explanation is no substitute for personal tax advice: 
  

	 	•	 	To make the explanation short and readable, only the highlights are covered. Some tax rules are not addressed, even though they may be important in particular cases. 


 

	 	•	 	While the summary attempts to deal with the most common situations, your own tax situation may well be different from the norm. 

  

	 	•	 	State and foreign income taxes are not addressed at all, even though they could have a significant impact on your tax planning. Likewise, federal gift and estate taxes and state inheritance taxes are not discussed.


  

	 	•	 	Tax planning involving incentive stock options is exceedingly complex, in part because of the possible application of the alternative minimum tax. 


 

	 	•	 	This explanation assumes that your option is not subject to section 409A of the Internal Revenue Code. However, the Company cannot be certain that section 409A is inapplicable to your option. (Please refer to
the last segment of this summary for more information about section 409A.) 

  

	 	•	 	The tax rules change often, and the Company is not responsible for updating this summary. (Please refer to the date at the top of this page.) 


FOR THESE REASONS, THE COMPANY STRONGLY
ENCOURAGES YOU TO CONSULT YOUR OWN TAX ADVISER BEFORE EXERCISING YOUR
OPTION. 
 LIMIT ON ISO TREATMENT 

The Notice of Stock Option Grant indicates whether your option is a nonstatutory stock option (NSO) or an incentive stock option (ISO). The favorable tax
treatment for ISOs is limited, regardless of what the Notice of Stock Option Grant indicates. Of the options that become exercisable in any calendar year, only options covering the first $100,000 of stock are eligible for ISO treatment. The excess
over $100,000 automatically receives NSO treatment. For this purpose, stock is valued at the time of grant. This means that the value is generally equal to the exercise price. 

  
 7 








 For example, assume that you hold an option to buy 60,000 shares for $8 per share. Assume further that the
entire option becomes exercisable in four equal annual installments. Only the first 50,000 shares qualify for ISO treatment. (12,500 times $8 equals $100,000.) The remaining 10,000 shares will be treated as if they had been acquired by exercising an
NSO. This is true regardless of when the option is actually exercised; what matters is when it first could have been exercised. 

EXERCISE OF NSO 
 If you are
exercising an NSO, you will be taxed now. You will recognize ordinary income in an amount equal to the excess of (a) the fair market value of the Purchased Shares on the date of exercise over (b) the exercise price you are paying. If you
are an employee or former employee of the Company, this amount is subject to withholding for income and payroll taxes. Your tax basis in the Purchased Shares (to calculate capital gain when you sell the shares) is equal to their fair market value on
the date of exercise. 
 DISPOSITION OF NSO SHARES 

When you dispose of the Purchased Shares, you will recognize a capital gain equal to the excess of (a) the sale proceeds over (b) your tax basis in
the Purchased Shares. As described above, your tax basis in the Purchased Shares is equal to their fair market value on the date of exercise. If the sale proceeds are less than your tax basis, you will recognize a capital loss. The capital gain or
loss will be long-term if you held the Purchased Shares for more than 12 months. The holding period starts when you exercise your NSO. In general, the maximum marginal federal income tax rate on long-term capital gains is 15% under current law. 

EXERCISE OF ISO AND ISO HOLDING PERIODS 

If you are exercising an ISO, you will not be taxed under the regular tax rules until you dispose of the Purchased Shares.1 (The alternative minimum tax rules are described below.) The tax treatment at the time of disposition depends on how long you hold the shares. You will satisfy the ISO holding periods if you hold the
Purchased Shares until the later of the following dates: 
  

	 	•	 	The date two years after the ISO was granted, and 

  

	 	•	 	The date one year after the ISO is exercised. 

 DISPOSITION OF ISO
SHARES 
 If you dispose of the Purchased Shares after satisfying both of the ISO holding periods, then you will recognize
only a long-term capital gain at the time of disposition. The amount of the capital gain is equal to the excess of (a) the sale proceeds over (b) the exercise price. In general, the maximum marginal federal income tax rate on long-term
capital gains is 15% under current law. 
  

	1 	Generally, a “disposition” of shares purchased under an ISO encompasses any transfer of legal title, such as a transfer by sale, exchange or gift. It generally does not include a transfer to your spouse, a
transfer into joint ownership with right of survivorship (if you remain one of the joint owners), a pledge, a transfer by bequest or inheritance, or certain tax-free exchanges permitted under the Internal Revenue Code. A transfer to a trust is a
“disposition” unless the trust is an eligible revocable trust, as described in the attached explanation. 


  
 8 








 If you dispose of the Purchased Shares before either or both of the ISO holding periods are met, then you will
recognize ordinary income at the time of disposition. The amount of ordinary income will be equal to the excess of (a) the fair market value of the Purchased Shares on the date of exercise over (b) the exercise price. But if the
disposition is an arm’s length sale to an unrelated party, the amount of ordinary income will not exceed the total gain from the sale. Under current IRS rules, the ordinary income amount will not be subject to withholding for income or payroll
taxes. 
 Your tax basis in the Purchased Shares will be equal to their fair market value on the date of exercise. Any gain in excess of your basis will be
taxed as a capital gain—either long-term or short-term, depending on how long you held the Purchased Shares after the date of exercise. 

SUMMARY OF ALTERNATIVE MINIMUM TAX 

The alternative minimum tax (AMT) must be paid if it exceeds your regular income tax. The AMT is equal to 26% of your alternative minimum tax base up to
$175,000 and 28% of the excess over $175,000. (In the case of married individuals filing separately, the breakpoint is $87,500 rather than $175,000.) Your alternative minimum tax base is equal to your alternative minimum taxable income (AMTI) minus
your exemption amount. 
  

	 	•	 	Alternative Minimum Taxable Income. Your AMTI is equal to your regular taxable income, subject to certain adjustments and increased by items of tax preference. Among the many adjustments made in computing
AMTI are the following: 

  

	 	•	 	State and local income and property taxes are not allowed as a deduction. 

  

	 	•	 	Miscellaneous itemized deductions are not allowed. 

  

	 	•	 	Medical expenses are not allowed as a deduction until they exceed 10% of adjusted gross income (as opposed to the 7.5% floor that applies to regular income taxes). 


 

	 	•	 	Certain interest deductions are not allowed. 

  

	 	•	 	The standard deduction and personal exemptions are not allowed. 

  

	 	•	 	When an ISO is exercised, the spread is treated as if the option were an NSO. (See discussion below.) 

  

	 	•	 	Exemption Amount. Before AMT is calculated, AMTI is reduced by the exemption amount. Under current law, the exemption amount is as follows: 


  
 9 









													
	 Year:
	  	Joint Returns:	 	  	Single Returns:	 	  	Separate Returns:	 
	 2009
	  	$	70,950	  	  	$	46,700	  	  	$	35,475	  
	 After 20092
	  	$	45,000	  	  	$	33,750	  	  	$	22,500	  

 The exemption amount is phased out by 25 cents for each $1 by which AMTI exceeds the following levels: 

 

									
	 Joint Returns: $150,000
	  	Single Returns: $	112,500	  	  	Separate Returns: $	75,000	  

 This means, for example, that the entire $70,950 exemption amount disappears for married individuals filing
joint returns when AMTI reaches $433,800. 
 APPLICATION OF AMT WHEN ISO IS
EXERCISED 
 As noted above, when an ISO is exercised, the spread is treated for AMT purposes as if the option were an NSO. In other
words, the spread is included in AMTI at the time of exercise. 
 A special rule applies if you dispose of the Purchased Shares in the same year in which
you exercised the ISO. If the amount you realize on the sale is less than the value of the stock at the time of exercise, then the amount includible in AMTI on account of the ISO exercise is limited to the gain realized on the sale.3 
 To the extent that your AMT is attributable to the spread on exercising an ISO (and certain other
items), you may be able to apply the AMT that you paid as a credit against your income tax liability in future years. But the rules on calculating the available tax credits were amended frequently in recent years and have become extraordinarily
complex. On this issue in particular, you must consult your own tax adviser. 
 When Purchased Shares are sold, your basis for purposes of computing
the capital gain or loss under the AMT system is increased by the option spread that exists at the time of exercise. Again, an ISO is treated under the AMT system much like an NSO is treated under the regular tax system. But your basis in the ISO
shares for purposes of computing gain or loss under the regular tax system is equal to the exercise price; it does not reflect any AMT that you pay on the spread at exercise. Therefore, if you pay AMT in the year of the ISO exercise and
regular income tax in the year of selling the Purchased Shares, you could pay tax twice on the same gain (except to the extent that you can use the AMT credit described above). 

 

	2 	This assumes that Congress does not extend AMT relief, as it has done annually in prior years. 


	3 	This is similar to the rule that applies under the regular tax system in the event of a disqualifying disposition of ISO stock. The amount of ordinary income that must be recognized in that case generally does not
exceed the amount of the gain realized in the disposition. 


  
 10 








 SECTION 409A OF THE INTERNAL
REVENUE CODE 
 The preceding summary assumes that section 409A of the Internal Revenue Code does not apply to your
option. In general, your option is exempt from section 409A if the exercise price per share is at least equal to the fair market value per share of the Company’s Common Stock at the time the option was granted by the Board of Directors.
Since shares of Common Stock are not traded on an established securities market, the determination of their fair market value generally is made by the Board of Directors or by an independent appraisal firm retained by the Company. In either case,
there is no guarantee that the Internal Revenue Service will agree with the valuation. 
 If your option were found to be subject to
section 409A, then you would be required to recognize ordinary income whenever a portion of your option vests (i.e. becomes exercisable). The amount of ordinary income would be equal to the fair market value of the shares at the time of
vesting minus the exercise price of the shares. This amount would also be subject to a 20% federal tax in addition to the federal income tax at your usual marginal rate for ordinary income. 

DISCLAIMER UNDER IRS CIRCULAR 230 

To comply with IRS rules, you are hereby notified that the foregoing summary was not intended or written in order to be used, and it cannot be
used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. In addition, if the foregoing summary would otherwise be considered a “marketed opinion” under the IRS rules, you are hereby notified that the
advice was written to support the promotion or marketing of the transactions or matters addressed by the summary. The tax consequences of options will vary depending on the specific circumstances of each taxpayer. Therefore, each taxpayer should
seek advice from an independent tax adviser. 

  
 11 








 QUESTIONS AND ANSWERS ABOUT
OPTION GRANTS UNDER THE 
 TOBIRA
THERAPEUTICS, INC. 2010 STOCK PLAN 
  

	1.	What is a stock option? 

 A stock option gives you the right to purchase a specific
number of shares of the Company’s common stock at a price (the “exercise price”) that is based on the market value of the common stock on the day your option is granted. When you purchase the common stock, you have
“exercised” the option. If the value of the stock has increased since the grant, you have the opportunity to realize a gain. 
  

	2.	What is the 2010 Stock Plan? 

 The Company’s stock options are granted under the
2010 Stock Plan (the “Plan”). The Plan was adopted by the Company to provide its employees, directors and consultants with an opportunity to acquire an interest in the Company through ownership of the Company’s common stock. 

It is important to read and understand the terms of the Plan and the Stock Option Agreement included in your stock option package. Your option
plan administrator will help you with any questions you may have. 
  

	3.	How are options granted? 

 Only the Company’s Board of Directors (the
“Board”) or a committee of the Board may grant stock options. The Board grants stock options based on the recommendations of the Company’s Chief Executive Officer and guidelines established by the Board. After the Board approves the
option grants, stock option packages are prepared and forwarded to the individuals to whom grants have been made (the “Optionees”). 
  

	4.	Are there different types of stock options? 

 Two different types of options may be
granted under the Plan: incentive stock options (“ISOs”) and nonstatutory stock options (“NSOs”). ISOs are “qualified,” which means that they may receive preferential tax treatment under the Internal Revenue Code in
certain circumstances. NSOs are “not qualified” and are subject only to the terms and conditions of the Plan. Please refer to your Notice of Stock Option Grant to determine what type of option you hold. 

 

	5.	How do I know how many options I have? 

 After the Board grants your option, you will
receive at least two copies of a Notice of Stock Option Grant and Stock Option Agreement indicating the type of option you are receiving and its exact terms, including (1) the number of shares available to you, (2) the
exercise price per share (which generally is intended to be equal to the “fair market value” of the Company’s common stock on the day you are granted the option), (3) your vesting schedule and (4) the expiration date. You
should sign all copies of the Notice of Stock Option Grant and return them to your option plan administrator. 







 An officer of the Company will also sign the Notice of Stock Option Grant and will return a fully
executed copy to you for your files. Please be aware that your stock option documentation is valuable and should be kept in a safe place with your other important papers. You may not exercise your option unless you have signed and returned the
Notice of Stock Option Grant or have otherwise agreed to be bound by the Stock Option Agreement. 
  

	6.	How is the exercise price determined? 

 Due to legal and tax restrictions, the exercise
price per share of an option may not be less than the fair market value per share of the Company’s common stock on the day the option is granted. You will be told the exercise price of your option at the time the option is granted. The exercise
price is fixed for the life of the option, even if the Company’s common stock can be sold for a higher amount in the future. 
  

	7.	What is the fair market value? 

 The “fair market value” of the Company’s
common stock is the price that a reasonable person could be expected to pay for the stock. Currently, because the Company has not “gone public,” the Board determines the fair market value. The Board may or may not base its determination on
an independent valuation report. 
  

	8.	What does “exercise” mean? 

 When you “exercise” an option, you
purchase from the Company all or part of the shares of common stock subject to the option. 
  

	9.	When may I purchase the stock? 

 You may purchase the common stock subject to your option
at any time after the option has vested and before it expires. The option expires on the date specified in your Notice of Stock Option Grant, and it may expire earlier if your service terminates. It is your responsibility to monitor the
expiration date of your option. 
  

	10.	What is vesting? 

 The right to exercise your option and to purchase the common stock is
subject to “vesting.” This means that you have to remain in the Company’s service for a certain period of time before you may exercise your option. Your option becomes exercisable, or vests, in installments over a period of several
years. 

  
 2 









	11.	An example to illustrate vesting. 

 Mary Brown is granted an option on October 1,
2005, to purchase 2,400 shares of the Company’s stock at $.25 per share (the assumed fair market value of the common stock on that date). According to her Stock Option Agreement, the option becomes exercisable, or vests, as follows: 25% of the
option vests one year after the grant date, and the balance vests in equal monthly installments over the next 36 months, provided she remains with the Company. Accordingly, the vesting schedule is as follows: 

 

			
	 No. of Shares Exercisable and Vested:
	  	On and After:
	 600
	  	October 1, 2006
	 650
	  	November 1, 2006
	 700
	  	December 1, 2006
	 750
	  	January 1, 2007

 The option continues to vest at the rate of 50 shares per month until the option is fully exercisable and
vested on October 1, 2009. 
 If Mary leaves the Company on January 2, 2007, she will have vested in 750 shares, and she may
exercise the option for those shares at any time before it expires. 
  

	12.	What if I leave the Company? 

 If you leave the Company, you will generally have
three months to exercise your option for any shares for which it is exercisable, or vested, on your last day of service. It is your responsibility to monitor the expiration date of your option. 

 

	13.	How do I exercise an option? 

 If you want to exercise an option, obtain from the Company
a copy of the Notice of Stock Option Exercise form. Complete and sign this form and send it to your option plan administrator, along with your payment for the total purchase price. 

 

	14.	What is the effective date of exercise? 

 The “effective date” of the option
exercise will be the date you deliver to the Company both your payment for the purchase price of the option shares and the signed Notice of Stock Option Exercise form. 

 

	15.	When will I receive the stock certificate? 

 Within a few weeks after the date of
exercise, a stock certificate for the shares that you have purchased will be prepared by our stock transfer agent and sent to you. 

  
 3 









	16.	When may I sell the stock? 

 Unless the Company goes public, there is no market for the
stock. If the Company goes public, there are many complicated rules of the Securities and Exchange Commission regarding the sale of stock. However, if the Company is public and the “market stand-off” or “lock-up” has been
released (usually about six months after the IPO), you will generally be able to sell your shares shortly after you exercise the option. 

Attached to this document is additional information regarding the securities laws applicable to the resale of the Company’s stock. 

 

	17.	What taxes do I pay when I exercise an ISO? 

 You do not pay any tax upon exercise of an
ISO (unless you are subject to the “alternative minimum tax” described below). Tax will be due on the gain you realize when you sell your stock. 
  

	18.	What taxes do I pay when I sell the stock? 

 Under the current tax rules, the difference
between the option exercise price (“cost”) and the selling price is taxed at the time of sale. 
  

	19.	An example of tax liability. 

 Continuing with the example discussed earlier, suppose
that on October 1, 2006, Mary Brown exercises her option for 600 shares of common stock. Mary’s exercise price is $.25 per share. At the time of exercise, the common stock is assumed to have a fair market value of $1.00 per share. Because
Mary has paid $150.00 for stock that now has a fair market value of $600.00, Mary has theoretically made a $450.00 profit by exercising her option. 

Because Mary’s option is an ISO, she is entitled to postpone payment of taxes on the $450.00 “profit” until she sells the shares
(unless she owes alternative minimum tax, as explained below). 
 If Mary then sells the shares for $2.00 per share in early 2007, she will
owe taxes for 2007 on $1,050.00 (the difference between the $150.00 she paid for the stock and the $1,200.00 she received from the sale). 

It is important to remember that the values used in these examples are only hypothetical, and the Company cannot predict whether its stock
value will increase or decline in the future. 
  

	20.	What is the alternative minimum tax? 

 “Alternative minimum tax” is a special
tax computation that certain taxpayers have to perform. You should consult your tax adviser to see if it applies to you. 

  
 4 








 
In general, when you exercise an ISO, you must include in your alternative minimum taxable income the difference between your exercise price and the fair market value of the purchased shares on
the exercise date. When you prepare your tax return, you may have to calculate your taxes two different ways. Under the regular calculation, this spread on your option is not added to your income at all; it’s not taxed until the shares are sold
or otherwise transferred. But you may also have to perform a separate, alternative calculation that includes as part of your income the ISO spread as well as other “tax preference” items. You may end up paying higher taxes as a result of
this alternative calculation. If the alternative minimum tax does apply to you, you may be able to time your ISO exercises to minimize the alternative minimum tax liability. 
  

	21.	What should I say if someone asks me about the value of my stock option or the Company’s financial status? 


All inquiries about the Company’s financial condition or prospects, and any questions from anyone who is interested in the Company from
the perspective of an investor (rather than a customer or prospective employee), should be directed to the Chief Financial Officer or the Chief Executive Officer. This includes all inquiries from the financial community and the financial press. 

DISCLAIMER UNDER IRS CIRCULAR 230 

To comply with IRS rules, you are hereby notified that the foregoing summary was not intended or written in order to be used, and it cannot be used by any
taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. In addition, if the foregoing summary would otherwise be considered a “marketed opinion” under the IRS rules, you are hereby notified that the advice was
written to support the promotion or marketing of the transactions or matters addressed by the summary. The tax consequences of options will vary depending on the specific circumstances of each taxpayer. Therefore, each taxpayer should seek advice
from an independent tax adviser. 

  
 5 








 ADDITIONAL INFORMATION ABOUT
SECURITIES LAWS AND 
 THE RESALE OF
RESTRICTED SECURITIES 
 Your option will by its terms not be transferable, other than upon your death.
Your option will, during your lifetime, be exercisable only by you. In addition to this restriction, your option and the common stock purchased by exercising your option may be subject to restrictions on transfer under federal, State or foreign
securities laws. 
 The Plan, the options and the shares have not been registered under the Securities Act of 1933, as amended (the
“Act”). The Act is a federal law regulating the issuance of securities. Rather, the options and shares will be issued in reliance on an exemption under the Act available for employee stock plans. A restrictive legend will be placed
on the stock certificate stating that no sale or other disposition of the stock may be made without meeting certain conditions. You are advised that because the Company’s securities have not been registered under the Act, any shares
purchased upon exercise of your option are “restricted securities” and must be held indefinitely, unless they are subsequently registered for sale under the Act or an exemption from registration is available. Moreover, the Company is under
no obligation to register the shares issued under the Plan. There currently is no public market for any of the Company’s securities, and it is unlikely that a market will develop in the foreseeable future. 

If the Company should subsequently register some of its stock with the Securities and Exchange Commission (the “SEC”), Rule 144
may be available as an exemption for resales of any unregistered shares of common stock that you may have purchased by exercising an option. SEC Rule 144 allows the resale of unregistered shares if all of the following conditions are satisfied:

 (a) The Company must at the time of the sale be subject to the periodic reporting requirements of the federal securities
laws. In general, the Company would become subject to these requirements immediately after the initial public offering of its securities. 

(b) The shares must have been held for at least one year, although under SEC Rule 701 this holding period requirement will
automatically lapse 90 days after the initial public offering. 
 (c) The number of shares that may be sold pursuant to the
Rule 144 exemption in any three-month period is limited to the greater of (i) 1% of the total outstanding shares of the Company’s common stock at that time or (ii) the average weekly trading volume in such shares
for the four weeks immediately preceding the date of sale. Under Rule 701, this restriction applies only to officers and directors of the Company. 

(d) The sale must be effected in a broker’s transaction or to the market maker in the shares. 







 (e) In general, notice of the sale must be given contemporaneously to the SEC by
filing Form 144. Under Rule 701, this requirement applies only to officers and directors of the Company. 
 It is important to
understand that the Rule 144 holding period for your shares begins when the shares are purchased and does not include the period of time during which your option was outstanding. 

Should the Company effect an initial public offering of its shares, then, beginning 90 days later, shares may be sold under Rules 144
and 701 without compliance with the one-year holding period requirement as follows: 
 (a) Affiliates (generally,
“affiliates” include officers, directors or other individuals who have control over the Company) may sell their unregistered shares in compliance with the volume, manner of sale and notice requirements of Rule 144. 

(b) Any shares held by non-affiliates may be freely sold at any time, subject only to (i) the Rule 144 manner of sale
requirement and (ii) any lock-up obligations imposed by underwriters in connection with the initial public offering. 
 In practice, the lock-up
required by the Company’s underwriters may preclude sales for approximately 180 days (rather than 90 days) following an IPO. 

  
 2 








 TOBIRA THERAPEUTICS, INC. 2010
STOCK PLAN 
 NOTICE OF STOCK OPTION
EXERCISE (EARLY EXERCISE) 
 You must sign this Notice on Page 3 before
submitting it to the Company. 
 OPTIONEE INFORMATION: 

 

							
	Name:	 	  
	  	Social Security Number:	 	  

				
	Address:	 	  
	  	Employee Number:	 	  

				
		 	  
	  		 	

 OPTION INFORMATION: 

 

			
	Date of Grant:                      , 2010	  	Type of Stock Option:
		
	Exercise Price per Share: $                    	  	 ̈ Nonstatutory (NSO)
		
	 Total number of shares of Common Stock of Tobira Therapeutics, Inc. (the “Company”) covered by the option:

 ________ 
	  	 ̈ Incentive (ISO)

 EXERCISE INFORMATION: 

 

			
	Number of shares of Common Stock of the Company for which the option is being exercised now:
                    . (These shares are referred to below as the “Purchased Shares.”)
	
	 Total Exercise Price for the Purchased Shares:
$                    

	
	 Form of payment enclosed [check all that apply]:

		
	  ̈       
	 	Check for $            , payable to “Tobira Therapeutics, Inc.”
		
	  ̈       
	 	Certificate(s) for             shares of Common Stock of the Company. These shares will be valued as of the date this notice is received by the Company. [Requires
Company consent.]
		
	  ̈       
	 	Attestation Form covering             shares of Common Stock of the Company. These shares will be valued as of the date this notice is received by the Company.
[Requires Company consent.]

  

	
	Name(s) in which the Purchased Shares should be registered [please review the attached explanation of the available forms of ownership, and then check one box]:

  

					
	  ̈       
	 	In my name only	  	
			
	  ̈       
	 	In the names of my spouse and myself as community property	  	My spouse’s name (if applicable):
			
	  ̈       
	 	In the names of my spouse and myself as community property with the right of survivorship	  	  










					
			
	  ̈       
	 	In the names of my spouse and myself as joint tenants with the right of survivorship	  	
			
	  ̈       
	 	In the name of an eligible revocable trust [requires Stock Transfer Agreement]	  	 Full legal name of revocable trust:
  

		 		  	  

		 		  	  


  

			
	The certificate for the Purchased Shares should be sent to the following address:	  	  

 

		  	  

		  	  


 REPRESENTATIONS AND ACKNOWLEDGMENTS OF THE
OPTIONEE: 
  

	1.	I represent and warrant to the Company that I am acquiring and will hold the Purchased Shares for investment for my account only, and not with a view to, or for resale in connection with, any “distribution” of
the Purchased Shares within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). 

  

	2.	I understand that the Purchased Shares have not been registered under the Securities Act by reason of a specific exemption therefrom and that the Purchased Shares must be held indefinitely, unless they are subsequently
registered under the Securities Act or I obtain an opinion of counsel (in form and substance satisfactory to the Company and its counsel) that registration is not required. 


 

	3.	I acknowledge that the Company is under no obligation to register the Purchased Shares. 

  

	4.	I am aware of the adoption by the Securities and Exchange Commission of Rule 144 under the Securities Act, which permits limited public resales of securities acquired in a non-public offering, subject to the
satisfaction of certain conditions. These conditions may include (without limitation) that certain current public information about the issuer be available, that the resale occur only after a holding period required by Rule 144 has been
satisfied, that the sale occur through an unsolicited “broker’s transaction” and that the amount of securities being sold during any three-month period not exceed specified limitations. I understand that the conditions for resale set
forth in Rule 144 have not been satisfied and that the Company is not required to take action to satisfy any conditions applicable to it. 

  

	5.	I will not sell, transfer or otherwise dispose of the Purchased Shares in violation of the Securities Act, the Securities Exchange Act of 1934, or the rules promulgated thereunder, including Rule 144 under the
Securities Act. 

  

	6.	I acknowledge that I have received and had access to such information as I consider necessary or appropriate for deciding whether to invest in the Purchased Shares and that I had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the issuance of the Purchased Shares. 

  

	7.	I am aware that my investment in the Company is a speculative investment that has limited liquidity and is subject to the risk of complete loss. I am able, without impairing my financial condition, to hold the Purchased
Shares for an indefinite period and to suffer a complete loss of my investment in the Purchased Shares. 

  

	8.	I acknowledge that the Purchased Shares remain subject to the Company’s right of first refusal and the market stand-off (sometimes referred to as the “lock-up”) and may remain subject to the
Company’s right of repurchase at the exercise price, all in accordance with the applicable Notice of Stock Option Grant and Stock Option Agreement. 


  
 2 









	9.	I acknowledge that I am acquiring the Purchased Shares subject to all other terms of the Notice of Stock Option Grant and Stock Option Agreement. 


 

	10.	I acknowledge that I have received a copy of the Company’s explanation of the forms of ownership available for my Purchased Shares. I acknowledge that the Company has encouraged me to consult my own adviser to
determine the form of ownership that is appropriate for me. In the event that I choose to transfer my Purchased Shares to a trust, I agree to sign a Stock Transfer Agreement. In the event that I choose to transfer my Purchased Shares to a trust that
does not satisfy the requirements described in the attached explanation (i.e. a trust that is not an eligible revocable trust), I also acknowledge that the transfer will be treated as a “disposition” for tax purposes. As a result, the
favorable ISO tax treatment will be unavailable and other unfavorable tax consequences may occur. 

  

	11.	I acknowledge that I have received a copy of the Company’s explanation of the federal income tax consequences of an option exercise and the tax election under section 83(b) of the Internal Revenue Code. In the
event that I choose to make a section 83(b) election, I acknowledge that it is my responsibility—and not the Company’s responsibility—to file the election in a timely manner, even if I ask the Company or its agents to make the
filing on my behalf. I acknowledge that the Company has encouraged me to consult my own adviser to determine the tax consequences of acquiring the Purchased Shares at this time. 


 

	12.	I agree that the Company does not have a duty to design or administer the 2010 Stock Plan or its other compensation programs in a manner that minimizes my tax liabilities. I will not make any claim against the Company
or its Board of Directors, officers or employees related to tax liabilities arising from my options or my other compensation. In particular, I acknowledge that my options are exempt from section 409A of the Internal Revenue Code only if the
exercise price per share is at least equal to the fair market value per share of the Company’s Common Stock at the time the option was granted by the Company’s Board of Directors. Since shares of the Company’s Common Stock are not
traded on an established securities market, the determination of their fair market value was made by the Company’s Board of Directors or by an independent valuation firm retained by the Company. I acknowledge that there is no guarantee in
either case that the Internal Revenue Service will agree with the valuation, and I will not make any claim against the Company or its Board of Directors, officers or employees in the event that the Internal Revenue Service asserts that the valuation
was too low. 

  

	13.	I agree to seek the consent of my spouse to the extent required by the Company to enforce the foregoing. 

  

							
	SIGNATURE:	 		  	DATE:	  	
				
	  
	 		  	  
	  	


  
 3 








 EXPLANATION OF FORMS OF
STOCK OWNERSHIP 
 PURPOSE OF THIS EXPLANATION 

The purpose of this explanation is to provide you with a brief summary of the forms of legal ownership available for the shares that you are purchasing (the
“Purchased Shares”). For a number of reasons, this explanation is no substitute for personal legal advice: 
  

	 	•	 	To make the explanation short and readable, only the highlights are covered. Some legal rules are not addressed, even though they may be important in particular cases. 


 

	 	•	 	While the summary attempts to deal with the most common situations, your own situation may well be different from the norm. 

  

	 	•	 	The law may change, and the Company is not responsible for updating this summary. 

  

	 	•	 	The form in which you own your shares may have a substantial impact on the estate tax treatment that applies to those shares when you die or the income tax treatment that applies when your survivors sell the shares
after your death. 

 FOR THESE REASONS, THE COMPANY
STRONGLY ENCOURAGES YOU TO CONSULT YOUR OWN ADVISER BEFORE EXERCISING YOUR
OPTION AND BEFORE MAKING A DECISION ABOUT THE FORM OF OWNERSHIP FOR
YOUR SHARES. 
 OVERVIEW 

The Notice of Stock Option Exercise offers five forms of taking title to the Purchased Shares: 

 

	 	•	 	In your name only, 

  

	 	•	 	In your name and the name of your spouse as community property, 

  

	 	•	 	In your name and the name of your spouse as community property with the right of survivorship, 

  

	 	•	 	In your name and the name of your spouse as joint tenants with the right of survivorship, or 

  

	 	•	 	In the name of an eligible revocable trust. 

 Title in the Purchased Shares depends upon (a) your marital
status, (b) the marital property laws of your state of residence and (c) any agreement with your spouse altering the existing marital property laws of your state of residence. If you are not married, you generally will take title in your
name alone. If you are married, title depends upon the marital property laws of your state of residence. In general, states are classified either as “community property” states or as “common-law property” states. (But individual
state law may vary within these classifications.) 

  
 4 








 COMMUNITY PROPERTY AND JOINT
TENANCY 
 Community property states include California, Texas, Washington, Arizona, Nevada, New Mexico, Idaho, Louisiana and Wisconsin.
In a community property state, property acquired during marriage by either spouse is presumed to be one-half owned by each spouse. All other property is classified as the separate property of the spouse who acquires the property. While either spouse
has equal management and control over the community property and may sell, spend or encumber all community property, neither spouse may gift community property or partition his/her one-half interest without the consent of the other spouse. Upon
divorce, all community property is divided equally among the spouses and each spouse is entitled to retain all of his/her separate property. Upon the death of a spouse, one-half of the community property (and all of the decedent spouse’s
separate property) will pass to the decedent spouse’s heirs. The other one-half of the community property remains the property of the surviving spouse. 

Other states are common-law property states. In a common-law property state, each spouse is generally deemed to own whatever he/she earns or acquires. 

A married couple may elect to alter the marital property rules by mutually agreeing to take title to property in other forms. For example, a couple residing
in a community property state may generally enter into an agreement and transform what otherwise would be community property into the separate property of the spouse who earns or acquires the property. 

In addition, many community property and common-law property states allow married couples to take joint title in property acquired during marriage. For
example, California allows a married couple to take title in a joint tenancy with the right of survivorship. In a joint tenancy, each spouse owns a one-half interest in the property as separate property. This means that each spouse may transfer or
sell his/her one-half interest in the property while he/she is alive. However, unlike traditional separate property, a spouse cannot transfer his/her one-half interest to heirs at death. Instead, the surviving spouse automatically receives
the decedent spouse’s one-half interest and becomes the full owner of the property. (This is called the “right of survivorship.”) Both spouses must consent to taking property in a joint tenancy in lieu of having the community property
laws apply. 
 California also allows a married couple to take title in the shares as community property with the right of survivorship. This
means that the shares are treated like community property while both spouses are alive. However, if one spouse dies, then the other spouse automatically receives the decedent spouse’s one-half interest and becomes the full owner of the shares.
In other words, the decedent spouse’s will or trust does not control the disposition of the shares. 
 If you have the Purchased Shares
issued in a form other than those described above, then the transfer will be treated as a “disposition” for tax purposes. This means that the effect, for tax purposes, will be the same as selling the Purchased Shares. Please refer to the
attached tax summary for additional information. 

  
 5 








 TRUSTS 

A transfer to a trust generally should not be treated as a “disposition” of the Purchased Shares for tax purposes if the trust satisfies each of the
following conditions: 
  

	 	•	 	You are the sole grantor of the trust, 

  

	 	•	 	You are the sole trustee, or you and your spouse are the sole co-trustees, 

  

	 	•	 	The trustee or trustees are not required to distribute the income of the trust to any person other than you and/or your spouse while you are alive, and 


 

	 	•	 	The trust permits you to revoke all or part of the trust and to have the trust’s assets returned to you, without the consent of any other person (including your spouse). 


If you have the Purchased Shares issued to a trust that does not meet these requirements, then the transfer will be treated as a “disposition” for
tax purposes. This means that the effect, for tax purposes, will be the same as selling the Purchased Shares. Please refer to the attached tax summary for additional information. 

If you have the Purchased Shares issued to any trust, you will be required to sign a Stock Transfer Agreement in your capacity as trustee. Under the Stock
Transfer Agreement, the Purchased Shares remain subject to the Company’s right of first refusal and may remain subject to the Company’s right of repurchase at the exercise price, all in accordance with the applicable Notice of Stock Option
Grant and Stock Option Agreement. 
 THE COMPANY WILL NOT CHECK
TO DETERMINE WHETHER THE FORM OF OWNERSHIP THAT YOU ELECT IN YOUR
NOTICE OF STOCK OPTION EXERCISE IS APPROPRIATE. YOU SHOULD CONSULT YOUR
OWN ADVISERS ON THIS SUBJECT. IF AN INAPPROPRIATE ELECTION IS MADE,
THE FORM OF OWNERSHIP MAY NOT WITHSTAND LEGAL SCRUTINY OR MAY HAVE
ADVERSE TAX CONSEQUENCES. 

  
 6 








 EXPLANATION OF FEDERAL INCOME
TAX CONSEQUENCES 
 AND SECTION 83(b) ELECTION 

(Current as of June 2010) 

PURPOSE OF THIS EXPLANATION 

The purpose of this explanation is to provide you with a brief summary of the tax consequences of exercising your option. For a number of reasons, this
explanation is no substitute for personal tax advice: 
  

	 	•	 	To make the explanation short and readable, only the highlights are covered. Some tax rules are not addressed, even though they may be important in particular cases. 


 

	 	•	 	While the summary attempts to deal with the most common situations, your own tax situation may well be different from the norm. 

  

	 	•	 	State and foreign income taxes are not addressed at all, even though they could have a significant impact on your tax planning. Likewise, federal gift and estate taxes and state inheritance taxes are not discussed.


  

	 	•	 	Tax planning involving incentive stock options is exceedingly complex, in part because of the possible application of the alternative minimum tax. 


 

	 	•	 	The explanation assumes that you are paying the exercise price of your option in cash (or in the form of a full-recourse promissory note with an interest rate that meets IRS requirements). If you are paying the exercise
price in the form of stock, you become subject to special rules that are not addressed here. 

  

	 	•	 	This explanation assumes that your option is not subject to section 409A of the Internal Revenue Code. However, the Company cannot be certain that section 409A is inapplicable to your option. (Please refer to
the last segment of this summary for more information about section 409A.) 

  

	 	•	 	The tax rules change often, and the Company is not responsible for updating this summary. (Please refer to the date at the top of this page.) 


FOR THESE REASONS, THE COMPANY STRONGLY
ENCOURAGES YOU TO CONSULT YOUR OWN TAX ADVISER BEFORE EXERCISING YOUR
OPTION AND BEFORE MAKING A DECISION ABOUT FILING OR NOT FILING A
SECTION 83(b) ELECTION. 
 LIMIT ON ISO TREATMENT 

The Notice of Stock Option Grant indicates whether your option is a nonstatutory stock option (NSO) or an incentive stock option (ISO). The favorable tax
treatment for ISOs is limited, regardless of what the Notice of Stock Option Grant indicates. Of the options that become 

  
 7 








 
exercisable in any calendar year, only options covering the first $100,000 of stock are eligible for ISO treatment. The excess over $100,000 automatically receives NSO treatment. For this
purpose, stock is valued at the time of grant. This means that the value is generally equal to the exercise price. 
 For example, assume that you
hold an option to buy 50,000 shares for $4 per share. Assume further that the entire option is exercisable immediately after the date of grant. (It is irrelevant when the underlying stock vests.) Only the first 25,000 shares qualify for ISO
treatment. (25,000 times $4 equals $100,000.) The remaining 25,000 shares will be treated as if they had been acquired by exercising an NSO. This is true regardless of when the option is actually exercised; what matters is when it first
could have been exercised. 
 EXERCISE OF NSO TO PURCHASE VESTED
SHARES 
 The Notice of Stock Option Grant indicates whether your Purchased Shares are already vested. Vested shares are no longer subject
to the Company’s right to repurchase them at the exercise price, although they are still subject to the Company’s right of first refusal. If you know that your Purchased Shares are already vested, there is no need to file a
section 83(b) election. 
 If you are exercising an NSO to purchase vested shares, you will be taxed now. You will recognize ordinary income in an
amount equal to the excess of (a) the fair market value of the Purchased Shares on the date of exercise over (b) the exercise price you are paying. If you are an employee or former employee of the Company, this amount is subject to
withholding for income and payroll taxes. Your tax basis in the Purchased Shares (to calculate capital gain when you sell the shares) is equal to their fair market value on the date of exercise. 

EXERCISE OF NSO TO PURCHASE NON-VESTED SHARES

 If you are exercising an NSO to purchase non-vested shares, and if you do not file a timely election under section 83(b) of the Internal Revenue
Code, then you will not be taxed now. Instead, you will be taxed whenever an increment of Purchased Shares vests—in other words, when the Company no longer has the right to repurchase those shares at the exercise price. The Notice of Stock
Option Grant indicates when this occurs, generally over a period of several years. Whenever an increment of Purchased Shares vests, you will recognize ordinary income in an amount equal to the excess of (a) the fair market value of those
Purchased Shares on the date of vesting over (b) the exercise price you are paying for those Purchased Shares. If you are an employee or former employee of the Company, this amount will be subject to withholding for income and payroll taxes.
Your tax basis in the Purchased Shares (to calculate capital gain when you sell the shares) will be equal to their fair market value on the date of vesting. 

If you are exercising an NSO to purchase non-vested shares, and if you file a timely election under section 83(b) of the Internal Revenue Code, then you
will be taxed now. You will recognize ordinary income in an amount equal to the excess of (a) the fair market value of the Purchased Shares on the date of exercise over (b) the exercise price you are paying. If you are an employee or
former employee of the Company, this amount is subject to withholding for income and payroll taxes. Your tax basis in the Purchased Shares (to calculate capital gain when you sell the shares) is equal to their fair market value on the date of
exercise. Even if the fair market value of the Purchased Shares on the date of exercise equals the exercise price (and thus no tax is payable), the section 83(b) election must be made in order to avoid having any subsequent appreciation taxed
as ordinary income at the time of vesting. 

  
 8 








 YOU MUST FILE A SECTION 83(b)
ELECTION WITH THE INTERNAL REVENUE SERVICE WITHIN 30 DAYS AFTER THE NOTICE
OF STOCK OPTION EXERCISE IS SIGNED. The 30-day filing period cannot be extended. If you miss the deadline, you
will be taxed as the Purchased Shares vest, based on the value of the shares at that time. (See above.) The form for making the 83(b) election is attached. Additional copies of the form must be filed with the Company and with your tax return for the
year in which you make the election. 
 DISPOSITION OF NSO SHARES 

When you dispose of the Purchased Shares, you will recognize a capital gain equal to the excess of (a) the sale proceeds over (b) your tax basis in
the Purchased Shares. As described above, your tax basis in the Purchased Shares is equal to their fair market value on the date of exercise (or on the date of vesting if you exercised an NSO for non-vested shares and did not file a timely election
under section 83(b) of the Internal Revenue Code). If the sale proceeds are less than your tax basis, you will recognize a capital loss. The capital gain or loss will be long-term if you held the Purchased Shares more than 12 months. The
holding period normally starts when you exercise your NSO. In general, the maximum marginal federal income tax rate on long-term capital gains is 15% under current law. 

EXERCISE OF ISO AND ISO HOLDING PERIODS 

If you are exercising an ISO, you will not be taxed under the regular tax rules until you dispose of the Purchased Shares.1 (The alternative minimum tax rules are described below.) The tax treatment at the time of disposition depends on how long you hold the shares. You will satisfy the ISO holding periods if you hold the
Purchased Shares until the later of the following dates: 
  

	 	•	 	The date two years after the ISO was granted, and 

  

	 	•	 	The date one year after the ISO is exercised. 

 DISPOSITION OF ISO
SHARES 
 If you dispose of the Purchased Shares after satisfying both of the ISO holding periods, then you will recognize
only a long-term capital gain at the time of disposition. The amount of the capital gain is equal to the excess of (a) the sale proceeds over (b) the exercise price. In general, the maximum marginal federal income tax rate on long-term
capital gains is 15% under current law. 
  

	1 	Generally, a “disposition” of shares purchased under an ISO encompasses any transfer of legal title, such as a transfer by sale, exchange or gift. It generally does not include a transfer to your spouse, a
transfer into joint ownership with right of survivorship (if you remain one of the joint owners), a pledge, a transfer by bequest or inheritance, or certain tax-free exchanges permitted under the Internal Revenue Code. A transfer to a trust is a
“disposition” unless the trust is an eligible revocable trust, as described in the attached explanation. 


  
 9 








 If you dispose of the Purchased Shares before either or both of the ISO holding periods are met, then you will
recognize ordinary income at the time of disposition. The calculation of the ordinary income amount depends on whether the shares are vested at the time of exercise. 
  

	 	•	 	Shares Vested. If the shares are vested at the time of exercise, the amount of ordinary income will be equal to the excess of (a) the fair market value of the Purchased Shares on the date of exercise
over (b) the exercise price. But if the disposition is an arm’s length sale to an unrelated party, the amount of ordinary income will not exceed the total gain from the sale. Under current IRS rules, the ordinary income amount will not be
subject to withholding for income or payroll taxes. Your tax basis in the Purchased Shares will be equal to their fair market value on the date of exercise. Any gain in excess of your basis will be taxed as a capital gain—either long-term or
short-term, depending on how long you held the Purchased Shares after the date of exercise. 

  

	 	•	 	Shares Not Vested. If the Purchased Shares are not vested at the time of exercise, then the amount of ordinary income will be equal to the excess of (a) the fair market value of the Purchased Shares
on the date of vesting over (b) the exercise price. But if the disposition is an arm’s length sale to an unrelated party, the amount of ordinary income will not exceed the total gain from the sale. Under current IRS
rules, the ordinary income amount will not be subject to withholding for income or payroll taxes. Your tax basis in the Purchased Shares will be equal to their fair market value on the date of vesting. Any gain in excess of your basis will be taxed
as a capital gain—either long-term or short-term, depending on how long you held the Purchased Shares after the date of vesting. Please note that it makes no difference under the regular tax rules whether or not you filed a
section 83(b) election at the time you exercised your ISO. In either case, your regular taxable income is measured as of the time of vesting rather than the time of exercise. 


SUMMARY OF ALTERNATIVE MINIMUM TAX 

The alternative minimum tax (AMT) must be paid if it exceeds your regular income tax. The AMT is equal to 26% of your alternative minimum tax base up to
$175,000 and 28% of the excess over $175,000. (In the case of married individuals filing separately, the breakpoint is $87,500 rather than $175,000.) Your alternative minimum tax base is equal to your alternative minimum taxable income (AMTI) minus
your exemption amount. 
  

	 	•	 	Alternative Minimum Taxable Income. Your AMTI is equal to your regular taxable income, subject to certain adjustments and increased by items of tax preference. Among the many adjustments made in computing
AMTI are the following: 

  

	 	•	 	State and local income and property taxes are not allowed as a deduction. 

  

	 	•	 	Miscellaneous itemized deductions are not allowed. 

  

	 	•	 	Medical expenses are not allowed as a deduction until they exceed 10% of adjusted gross income (as opposed to the 7.5% floor that applies to regular income taxes). 


 

	 	•	 	Certain interest deductions are not allowed. 

  

	 	•	 	The standard deduction and personal exemptions are not allowed. 


  
 10 









	 	•	 	When an ISO is exercised, the spread is treated as if the option were an NSO. (See discussion below.) 

  

	 	•	 	Exemption Amount. Before AMT is calculated, AMTI is reduced by the exemption amount. Under current law, the exemption amount is as follows: 


 

													
	 Year:
	  	Joint Returns:	 	  	Single Returns:	 	  	Separate Returns:	 
	 2010 and thereafter2
	  	$	45,000	  	  	$	33,750	  	  	$	22,500	  

 The exemption amount is phased out by 25 cents for each $1 by which AMTI exceeds the following levels: 

 

									
	 Joint Returns: $150,000
	  	Single Returns: $	112,500	  	  	Separate Returns: $	75,000	  

 This means, for example, that the entire $45,000 exemption amount disappears for married individuals filing
joint returns when AMTI reaches $330,000. 
 APPLICATION OF AMT WHEN ISO IS
EXERCISED 
 As noted above, when an ISO is exercised, the spread is treated for AMT purposes as if the option were an NSO. In other
words, the spread is included in AMTI at the time of exercise, unless the Purchased Shares are not yet vested at the time of exercise. If the Purchased Shares are not yet vested, the value of the shares minus the exercise price is included in AMTI
when the shares vest. However, if you make an election under section 83(b) within 30 days after exercise, then the spread is included in AMTI at the time of exercise. YOU MUST FILE
AN 83(b) ELECTION WITH THE INTERNAL REVENUE SERVICE WITHIN 30 DAYS AFTER THE
NOTICE OF STOCK OPTION EXERCISE IS SIGNED. THE 30-DAY FILING
PERIOD CANNOT BE EXTENDED. 
 A special rule
applies if you dispose of the Purchased Shares in the same year in which you exercised the ISO. If the amount you realize on the sale is less than the value of the stock at the time of exercise, then the amount includible in AMTI on account of the
ISO exercise is limited to the gain realized on the sale.3 
 To the extent that your AMT is
attributable to the spread on exercising an ISO (and certain other items), you may be able to apply the AMT that you paid as a credit against your income tax liability in future years. But the rules on calculating the available tax credits were
amended frequently in recent years and have become extraordinarily complex. On this issue in particular, you must consult your own tax adviser. 

 

	2 	This assumes that Congress does not extend AMT relief, as it has done annually in prior years. 


	3 	This is similar to the rule that applies under the regular tax system in the event of a disqualifying disposition of ISO stock. The amount of ordinary income that must be recognized in that case generally does not
exceed the amount of the gain realized in the disposition. 


  
 11 








 When Purchased Shares are sold, your basis for purposes of computing the capital gain or loss under the
AMT system is increased by the option spread that exists at the time of exercise. Again, an ISO is treated under the AMT system much like an NSO is treated under the regular tax system. But your basis in the ISO shares for purposes of computing gain
or loss under the regular tax system is equal to the exercise price; it does not reflect any AMT that you pay on the spread at exercise. Therefore, if you pay AMT in the year of the ISO exercise and regular income tax in the year of selling
the Purchased Shares, you could pay tax twice on the same gain (except to the extent that you can use the AMT credit described above). 

SECTION 409A OF THE INTERNAL REVENUE CODE 

The preceding summary assumes that section 409A of the Internal Revenue Code does not apply to your option. In general, your option is exempt from
section 409A if the exercise price per share is at least equal to the fair market value per share of the Company’s Common Stock at the time the option was granted by the Board of Directors. Since shares of Common Stock are not traded on an
established securities market, the determination of their fair market value generally is made by the Board of Directors or by an independent appraisal firm retained by the Company. In either case, there is no guarantee that the Internal Revenue
Service will agree with the valuation. 
 If your option were found to be subject to section 409A, then you would be required to recognize
ordinary income whenever shares subject to your option vest (until the option is exercised). The amount of ordinary income would be equal to the fair market value of the shares at the time of vesting minus the exercise price of the shares. This
amount would also be subject to a 20% federal tax in addition to the federal income tax at your usual marginal rate for ordinary income. 

DISCLAIMER UNDER IRS CIRCULAR 230 

To comply with IRS rules, you are hereby notified that the foregoing summary was not intended or written in order to be used, and it cannot be
used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. In addition, if the foregoing summary would otherwise be considered a “marketed opinion” under the IRS rules, you are hereby notified that the
advice was written to support the promotion or marketing of the transactions or matters addressed by the summary. The tax consequences of options will vary depending on the specific circumstances of each taxpayer. Therefore, each taxpayer should
seek advice from an independent tax adviser. 

  
 12 








 SECTION 83(b) ELECTION 

This statement is made under Sections 55 and 83(b) of the Internal Revenue Code of 1986, as amended, pursuant to Treasury Regulations
Section 1.83-2. 
  

	 	A.	The taxpayer who performed the services is: 

  

									
		  	Name:	  	  
	  	
				
		  	Address:	  	  
	  	
				
		  		  	  
	  	
				
		  	Social Security No.:	  	  
	  	

  
  
  

	 	B.	The property with respect to which the election is made is             shares of the common stock of Tobira Therapeutics, Inc. 


 

	 	C.	The property was transferred on                  ,         . 


 

	 	D.	The taxable year for which the election is made is the calendar year         . 

  

	 	E.	The property is subject to a repurchase right pursuant to which the issuer has the right to acquire the property at the original purchase price if for any reason taxpayer’s service with the issuer terminates. The
issuer’s repurchase right lapses in a series of installments over a             -year period ending on             
    ,         . 

  

	 	F.	The fair market value of such property at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) is
$            per share. 

  

	 	G.	The amount paid for such property is $            per share. 

  

	 	H.	A copy of this statement was furnished to Tobira Therapeutics, Inc., for whom taxpayer rendered the services underlying the transfer of such property. 


 

	 	I.	This statement is executed on                  ,         . 


 

									
	  
	 		 	  

	Signature of Spouse (if any)	 		 	Signature of Taxpayer

 Within 30 days after the date of exercise, this election must be filed with the Internal Revenue Service Center where
the Optionee files his or her federal income tax returns. The filing should be made by registered or certified mail, return receipt requested. The Optionee must (a) file a copy of the completed form with his or her federal tax return for the
current tax year and (b) deliver an additional copy to the Company. 







 QUESTIONS AND ANSWERS ABOUT
OPTION GRANTS UNDER THE 
 TOBIRA
THERAPEUTICS, INC. 2010 STOCK PLAN (EARLY EXERCISE) 
  

	1.	What is a stock option? 

 A stock option gives you the right to purchase a specific
number of shares of the Company’s common stock at a price (the “exercise price”) that is based on the market value of the common stock on the day your option is granted. When you purchase the common stock, you have
“exercised” the option. If the value of the stock has increased since the grant, you have the opportunity to realize a gain. 
  

	2.	What is the 2010 Stock Plan? 

 The Company’s stock options are granted under the
2010 Stock Plan (the “Plan”). The Plan was adopted by the Company to provide its employees, directors and consultants with an opportunity to acquire an interest in the Company through ownership of the Company’s common stock. 

It is important to read and understand the terms of the Plan and the Stock Option Agreement included in your stock option package. Your option
plan administrator will help you with any questions you may have. 
  

	3.	How are options granted? 

 Only the Company’s Board of Directors (the
“Board”) or a committee of the Board may grant stock options. The Board grants stock options based on the recommendations of the Company’s Chief Executive Officer and guidelines established by the Board. After the Board approves the
option grants, stock option packages are prepared and forwarded to the individuals to whom grants have been made (the “Optionees”). 
  

	4.	Are there different types of stock options? 

 Two different types of options may be
granted under the Plan: incentive stock options (“ISOs”) and nonstatutory stock options (“NSOs”). ISOs are “qualified,” which means that they may receive preferential tax treatment under the Internal Revenue Code in
certain circumstances. NSOs are “not qualified” and are subject only to the terms and conditions of the Plan. Please refer to your Notice of Stock Option Grant to determine what type of option you hold. 

 

	5.	How do I know how many options I have? 

 After the Board grants your option, you
will receive at least two copies of a Notice of Stock Option Grant and Stock Option Agreement indicating the type of option you are receiving and its exact terms, including (1) the number of shares available to you, (2) the
exercise price per share (which generally is intended to be equal to the “fair market value” of the Company’s common stock on the day you are granted the option), (3) your vesting schedule and (4) the expiration date. You
should sign all copies of the Notice of Stock Option Grant and return them to your option plan administrator. 







 An officer of the Company will also sign the Notice of Stock Option Grant and will return a fully
executed copy to you for your files. Please be aware that your stock option documentation is valuable and should be kept in a safe place with your other important papers. You may not exercise your option unless you have signed and returned the
Notice of Stock Option Grant or have otherwise agreed to be bound by the Stock Option Agreement. 
  

	6.	How is the exercise price determined? 

 Due to legal and tax restrictions,
the exercise price per share of an option may not be less than the fair market value per share of the Company’s common stock on the day the option is granted. You will be told the exercise price of your option at the time the
option is granted. The exercise price is fixed for the life of the option, even if the Company’s common stock can be sold for a higher amount in the future. 

 

	7.	What is the fair market value? 

 The “fair market value” of the Company’s
common stock is the price that a reasonable person could be expected to pay for the stock. Currently, because the Company has not “gone public,” the Board determines the fair market value. The Board may or may not base its determination on
an independent valuation report. 
  

	8.	What does “exercise” mean? 

 When you “exercise” an option, you
purchase from the Company all or part of the shares of common stock subject to the option. 
  

	9.	When may I purchase the stock? 

 You may purchase the common stock subject to your option
at any time before the option expires. If you purchase unvested shares, however, those shares will be subject to repurchase by the Company, at the exercise price paid per share, should you leave the Company for any reason before those shares have
vested. 
 If you purchase unvested shares, you should consult your tax advisor about making an election under
Section 83(b) of the Internal Revenue Code. Such an election may be made only within 30 days after the option exercise. 

The option expires on the date specified in your Notice of Stock Option Grant, and it may expire earlier if your service
terminates. It is your responsibility to monitor the expiration date of your option. 

  
 2 









	10.	What is vesting? 

 The common stock purchasable under your option is subject to
“vesting.” This means that you have to remain in the Company’s service for a certain period of time before you fully own the stock purchased under your option. The stock subject to your option vests in installments over a period of
several years. 
 Remember, you may at any time exercise your option for unvested shares, but the Company may repurchase unvested shares at
the exercise price if your service ends for any reason. Alternatively, you may wait until your shares have vested before exercising your option. The choice is yours. However, your choice may have important tax implications, and you should consult
your tax advisor before making a decision. 
  

	11.	An example to illustrate vesting. 

 Mary Brown is granted an option on October 1,
2010, to purchase 2,400 shares of the Company’s stock at $.25 per share (the fair market value of the common stock on that date). According to her Stock Option Agreement, the option is immediately exercisable for all 2,400 shares, but the
shares purchasable under the option are to vest as follows: 25% of the shares will vest one year after the grant date, and the balance will vest in equal monthly installments over the next 36 months, provided she remains with the Company.
Accordingly, the vesting schedule is as follows: 
  

			
	No. of Shares Vested:	  	On and After:
	 600
	  	October 1, 2011
	 650
	  	November 1, 2011
	 700
	  	December 1, 2011
	 750
	  	January 1, 2012

 The shares will continue to vest at the rate of 50 per month until they are all vested on October 1,
2014. 
 If Mary exercises her option for all 2,400 shares on October 1, 2011, and then leaves the Company on January 2, 2012, she
will have vested in 750 shares. The Company will have the right to repurchase the 1,650 unvested shares at a price of $.25 per share, the amount she paid for those shares. The 750 vested shares will not be subject to repurchase. 

 

	12.	What if I leave the Company? 

 If you leave the Company, you will generally
have three months to exercise your option for any shares that are vested on your last day of service. You may not purchase unvested shares after your service has ended. It is your responsibility to monitor the expiration date of your
option. 

  
 3 









	13.	How do I exercise an option? 

 If you want to exercise an option, obtain from the Company
a copy of the Notice of Stock Option Exercise form. Complete and sign this form and send it to your option plan administrator, along with your payment for the total purchase price. 

 

	14.	What is the effective date of exercise? 

 The “effective date” of
the option exercise will be the date you deliver to the Company both your payment for the purchase price of the option shares and the signed Notice of Stock Option Exercise form. 

 

	15.	When will I receive the stock certificate? 

 Within a few weeks after the date of
exercise, one stock certificate for the shares that you have purchased will be prepared by our stock transfer agent. If you have purchased any unvested shares, the Company will typically hold the entire stock certificate for the vested and unvested
shares in escrow until you leave employment. 
  

	16.	When may I sell the stock? 

 Unless the Company goes public, there is no market for the
stock. If the Company goes public, there are many complicated rules of the Securities and Exchange Commission regarding the sale of stock. However, if the Company is public and the “market stand-off” or “lock-up” has been
released (usually about six months after the IPO), you will generally be able to sell your vested shares shortly after you exercise the option. 

Attached to this document is additional information regarding the securities laws applicable to the resale of the Company’s stock. 

 

	17.	What taxes do I pay when I exercise an option? 

 If you exercise an NSO and make an
“83(b) election,” as described in Q&A No. 9 above, then you pay tax at ordinary-income rates on the difference (if any) between the value of the stock at the time of exercise and the option exercise price. 

You do not pay any tax upon exercise of an ISO (unless you are subject to the “alternative minimum tax” described below). Tax will be
due on the gain you realize when you sell your stock. 
  

	18.	What taxes do I pay when I sell the stock? 

 In the case of an NSO, the difference
between the selling price and the value of the stock at the time of exercise is taxed as capital gain at the time of sale. The capital gain may be long- or short-term, depending on how long you held the shares before selling them. 

  
 4 








 In the case of an ISO, the difference between the selling price and the option exercise price
(“cost”) is taxed at the time of sale. 
  

	19.	An example of tax liability. 

 Continuing with the example discussed earlier, suppose
that on October 1, 2011, Mary Brown exercises her option for 600 fully vested shares of common stock. Mary’s exercise price is $.25 per share. At the time of exercise, the common stock is assumed to have a fair market value of $1.00 per
share. Because Mary has paid $150.00 for stock that now has a fair market value of $600.00, Mary has theoretically made a $450.00 profit by exercising her option. 

If Mary’s option is an NSO, she is taxable on the $450.00 “profit” when she exercises her option. This amount is treated as
ordinary income. 
 If Mary then sells the 600 shares for $2.00 per share in early 2012, she will have a short-term capital gain of $600.00
(the difference between the $1,200.00 she received from the sale and the $600.00 value of the shares at the time of exercise). 
 It is
important to remember that the values used in these examples are only hypothetical, and the Company cannot predict whether its stock value will increase or decline in the future. 

 

	20.	What is the alternative minimum tax? 

 “Alternative minimum tax” is a special
tax computation that certain taxpayers have to perform. You should consult your tax adviser to see if it applies to you. 
 In general, when
you exercise an ISO, you must include in your alternative minimum taxable income the difference between your exercise price and the fair market value of the purchased shares on the exercise date. When you prepare your tax return, you may have to
calculate your taxes two different ways. Under the regular calculation, this spread on your option is not added to your income at all; it’s not taxed until the shares are sold or otherwise transferred. But you may also have to perform a
separate, alternative calculation that includes as part of your income the ISO spread as well as other “tax preference” items. You may end up paying higher taxes as a result of this alternative calculation. If the alternative minimum tax
does apply to you, you may be able to time your ISO exercises to minimize the alternative minimum tax liability. 
 Exercising your ISO as
soon as possible and making an “83(b) election,” as described in Q&A No. 9 above, may reduce your alternative minimum tax liability. 
  

	21.	What should I say if someone asks me about the value of my stock option or the Company’s financial status? 


All inquiries about the Company’s financial condition or prospects, and any questions from anyone who is interested in the Company from
the perspective of an investor (rather than a customer or prospective employee), should be directed to the Chief Financial Officer or the Chief Executive Officer. This includes all inquiries from the financial community and the financial press. 


  
 5 








 DISCLAIMER UNDER IRS CIRCULAR 230 

To comply with IRS rules, you are hereby notified that the foregoing summary was not intended or written in order to be used, and it cannot be used by any
taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. In addition, if the foregoing summary would otherwise be considered a “marketed opinion” under the IRS rules, you are hereby notified that the advice was
written to support the promotion or marketing of the transactions or matters addressed by the summary. The tax consequences of options will vary depending on the specific circumstances of each taxpayer. Therefore, each taxpayer should seek advice
from an independent tax adviser. 

  
 6 








 ADDITIONAL INFORMATION ABOUT
SECURITIES LAWS AND 
 THE RESALE OF
RESTRICTED SECURITIES 
 Your option will by its terms not be transferable, other than upon your death.
Your option will, during your lifetime, be exercisable only by you. In addition to this restriction, your option and the common stock purchased by exercising your option may be subject to restrictions on transfer under federal, State or foreign
securities laws. 
 The Plan, the options and the shares have not been registered under the Securities Act of 1933, as amended
(the “Act”). The Act is a federal law regulating the issuance of securities. Rather, the options and shares will be issued in reliance on an exemption under the Act available for employee stock plans. A restrictive legend will be
placed on the stock certificate stating that no sale or other disposition of the stock may be made without meeting certain conditions. You are advised that because the Company’s securities have not been registered under the Act, any
shares purchased upon exercise of your option are “restricted securities” and must be held indefinitely, unless they are subsequently registered for sale under the Act or an exemption from registration is available. Moreover, the Company
is under no obligation to register the shares issued under the Plan. There currently is no public market for any of the Company’s securities, and it is unlikely that a market will develop in the foreseeable future. 

If the Company should subsequently register some of its stock with the Securities and Exchange Commission (the “SEC”), Rule 144
may be available as an exemption for resales of any unregistered shares of common stock that you may have purchased by exercising an option. SEC Rule 144 allows the resale of unregistered shares if all of the following conditions are satisfied:

 (a) The Company must at the time of the sale be subject to the periodic reporting requirements of the federal securities
laws. In general, the Company would become subject to these requirements immediately after the initial public offering of its securities. 

(b) The shares must have been held for at least one year, although under SEC Rule 701 this holding period requirement will
automatically lapse 90 days after the initial public offering. 
 (c) The number of shares that may be sold pursuant to the
Rule 144 exemption in any three-month period is limited to the greater of (i) 1% of the total outstanding shares of the Company’s common stock at that time or (ii) the average weekly trading volume in such shares for the four
weeks immediately preceding the date of sale. Under Rule 701, this restriction applies only to officers and directors of the Company. 

(d) The sale must be effected in a broker’s transaction or to the market maker in the shares. 







 (e) In general, notice of the sale must be given contemporaneously to the SEC by
filing Form 144. Under Rule 701, this requirement applies only to officers and directors of the Company. 
 It is important to
understand that the Rule 144 holding period for your shares begins when the shares are purchased and does not include the period of time during which your option was outstanding. 

Should the Company effect an initial public offering of its shares, then, beginning 90 days later, shares may be sold under Rules 144
and 701 without compliance with the one-year holding period requirement as follows: 
 (a) Affiliates (generally,
“affiliates” include officers, directors or other individuals who have control over the Company) may sell their unregistered shares in compliance with the volume, manner of sale and notice requirements of Rule 144. 

(b) Any shares held by non-affiliates may be freely sold at any time, subject only to (i) the Rule 144 manner of sale
requirement and (ii) any lock-up obligations imposed by underwriters in connection with the initial public offering. 
 In practice, the lock-up
required by the Company’s underwriters may preclude sales for approximately 180 days (rather than 90 days) following an IPO. 

  
 2 








 INSTRUCTIONS FOR IRS SECTION 83(B) ELECTION 

A. What to File. The 83(b) election form is to be completed and executed by the purchaser at the time of purchase. The originally
executed 83(b) is to be filed with the Internal Revenue Service Center with which the purchaser files his or her Federal income tax return. A listing of the appropriate filing locations is found on the IRS website at http://www.irs.gov. Click
on “Individuals”, then “Where to File.” 
 The purchaser should include the originally signed 83(b) election, a copy of
the 83(b) election and a self-addressed stamped envelope. Please read the form letter addressed to the IRS (last page of these instructions) for the details. 

B. When to File. The 83(b) must be filed with the Internal Revenue Service within thirty (30) days of the date on
which the shares are purchased. The 30-day period is an absolute deadline that cannot be waived under any circumstances. As a general rule, the purchase date is the same date as the date on the check that you use to purchase the shares (but
please check with the Company for details). 
 The filing is deemed to have been made on the date the 83(b) is mailed from the post
office; i.e. the postmark date. Additional completed, signed copies of the 83(b) are to be filed with the purchaser’s Federal tax returns (and State tax returns, if appropriate) for the calendar year in which the purchase occurs. 

C. How to File. The filing with the Internal Revenue Service should be made by registered or certified mail, return receipt requested,
in order to maintain proof of a timely filing. Attached is a sample cover letter to the Internal Revenue Service to be used in filing the 83(b). The Company must receive a copy of the completed and executed 83(b) for its files. 







 [Date] 

VIA CERTIFIED MAIL 
 Return Receipt Requested

 Receipt [enter receipt # here] 
 Internal Revenue
Service Center 
 [Enter appropriate IRS center address] 
  

	 	Re:	Election Under Section 83(b) of the Internal Revenue Code 

 Ladies and Gentlemen: 

Enclosed please find an executed form of Election under Section 83(b) of the Internal Revenue Code of 1986, relating to the issuance of
            shares of the Common Stock of Tobira Therapeutics, Inc. 
 Also
enclosed is a copy of the 83(b) election and a stamped, self-addressed envelope. Please acknowledge receipt of these materials by stamping the enclosed copy of the 83(b) with the date of receipt and returning it to me. 

Thank you for your attention to this matter. 

Very truly yours, 
 Enclosures

  

	cc:	Tobira Therapeutics, Inc.