Exhibit 10.24


 


DATE OF PROSPECTUS: NOVEMBER 1, 2018


 





ARQULE, INC. 2014 EQUITY INCENTIVES PLAN
(“Plan”)


 


Incentive Stock Option Terms and Conditions


 


This document constitutes part of a
prospectus covering securities that may be issued under the Plan and registered under the Securities Act of 1933, as amended. 


 


Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or has passed upon the accuracy
or adequacy of this prospectus. Any representation to the contrary is a criminal offense.


 


You should rely only on the information
contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with information that is
different from what is contained or incorporated by reference in this prospectus. You should not assume that the information contained
in this prospectus is accurate as of any date other than the date of this prospectus, and neither the positing of this prospectus
nor the issuance of any securities under the Plan will create any implication to the contrary. This prospectus does not constitute
an offer to buy or sell any securities in any jurisdiction where it is unlawful to do so.


 


1.       About
these Terms and Conditions. ArQule, Inc. (the “Company”) is required to provide you with a “prospectus”
giving a general description of material information regarding the 2014 ArQule, Inc. Equity Incentives (the “Plan”)
and its operations and the shares of common stock that may be issued under the Plan. As used herein, “ this prospectus”
consists of the following, taken together:


		·	these terms and conditions;



		·	the Plan;



		·	the documents identified below as being incorporated by reference into this prospectus; and



		·	any other documents that the Company specifically identifies in the future as being part of this
prospectus.



 


You should read all of the documents constituting
part of this prospectus.


 


2.       Plan
Incorporated by Reference. Options are issued pursuant to the terms of the Plan and may be amended as provided in the Plan.
Capitalized terms used and not otherwise defined in these terms and conditions have the meanings given to them in the Plan. Unless
otherwise specified in the notice of an Award or other written agreement, these terms and conditions apply to all non-qualified
stock options issued under the Plan. These terms and conditions do not set forth all of the terms and conditions of the Plan, which
are incorporated herein by reference. The Committee administers the Plan and its determinations regarding the operation of the
Plan are final and binding.


 


3.       Plan
Qualifications. The Plan is not qualified under Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”).
The Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)
and is not subject to reporting and disclosure obligations under ERISA.


 


4.       Exercise
Price. The price to be paid for each share of Common Stock issued upon exercise of the whole or any part of the Option is the
Exercise Price specified in the notice of an Award.


 




     


     


    

 


DATE OF PROSPECTUS: NOVEMBER 1, 2018


 


5.       Vesting.
Unless otherwise specified in the notice of an Award or other written agreement, the Option will vest and become exercisable in
25% annual, cumulative installments beginning on the first anniversary of the Date of Grant. The Option may not be exercised as
to any shares after the Expiration Date.


 


6.       Method
of Exercise. To exercise the Option, the Option Holder shall deliver written notice of exercise to the Company specifying the
number of shares with respect to which the Option is being exercised accompanied by payment of the Option Price for such shares
in cash, by check, consideration received by the Company under a cashless exercise program approved by the Company, or
in such other form, including shares of Common Stock of the Company valued at their Fair Market Value on the date of delivery,
as the Committee may approve. Promptly following such notice, the Company will credit the Option Holder’s account with the
number of shares with respect to which the Option is being exercised.


 


7.       Rights
as a Stockholder or Employee. The Option Holder shall not have any rights in respect of shares as to which the Option shall
not have been exercised and payment made as provided above. The Option Holder shall not have any rights to continued employment
by the Company by virtue of the grant of the Option.


 


8.       Adjustments
to Reflect Certain Events. If the outstanding common stock changes as a result of a stock dividend, stock split, extraordinary
cash dividend, recapitalization, reorganization, split-up, spin-off, combination, exchange of shares, or the like, the 2014 Plan
permits the Committee to substitute or adjust: (a) the number and class of securities subject to outstanding awards or the type
of consideration to be received upon exercise or payment of an award, (b) the exercise price of options, (c) the aggregate number
and class of securities for which awards may be granted under the Plan, and/or (d) the maximum number of securities with respect
to which an employee may be granted awards during any calendar year. In the event of a merger or consolidation to which the Company
is a party or other specified transactions, the Plan authorizes the Committee to make such changes and adjustments to outstanding
Awards as it deems equitable including causing any Award to become vested in whole or in part, be assumed by a successor or acquirer,
or be cancelled in consideration of a cash payment equal to the fair value of the cancelled Award.


 


9.       Option
Not Transferable. The Option is not transferable by the Option Holder otherwise than by will or the laws of descent and distribution,
and is exercisable, during the Option Holder's lifetime, only by the Option Holder. The naming of a Designated Beneficiary does
not constitute a transfer.


 


10.     Exercise
of Option after Termination of Employment. Except as set forth in paragraph 11 or otherwise specified in the notice of an Award
or other written agreement, if the Option Holder’s employment with the Company is terminated for any reason other than by
disability (within the meaning of Section 22(e)(3) of the Code) or death, the Option Holder may exercise the rights which were
available to the Option Holder at the time of such termination only within three months from the date of termination. If Option
Holder’s employment is terminated as a result of disability, such rights may be exercised within twelve months from the date
of termination. Upon the death of the Option Holder, his or her Designated Beneficiary shall have the right, at any time within
twelve months after the date of death, to exercise in whole or in part any rights that were available to the Option Holder at the
time of death. Notwithstanding the foregoing, no rights under the Option may be exercised after the Expiration Date.


 




     


     


    

 


DATE OF PROSPECTUS: NOVEMBER 1, 2018


 


11.     Exercise
of Option upon Retirement. Upon Retirement, as defined below and notwithstanding the exercisability schedule set forth on the
face of these terms and conditions, the Option may be exercised in whole or part until the earlier of up to two years from the
date of Retirement or the Expiration Date. Unless otherwise determined by the Committee in its sole discretion, “Retirement”
as to any Option Holder shall mean such person’s leaving the employment of the Company after reaching age 55 with ten
(10) years of full-time continuous service with the Company; provided, that the sum of the Option Holder’s age plus
the number of years of continuous service equal or exceed seventy (70). The Committee’s determination of the reason for termination
of the Option Holder’s employment shall be conclusive and binding on the Option Holder and his or her representatives or
legatees.


 


12.    Compliance
with Securities Laws. It shall be a condition to the Option Holder's right to purchase shares of Common Stock hereunder that
the Company may, in its discretion, require (a) that the shares of Common Stock reserved for issue upon the exercise of the Option
shall have been duly listed, upon official notice of issuance, upon any national securities exchange or automated quotation system
on which the Company's Common Stock may then be listed or quoted, (b) that either (i) a registration statement under the Securities
Act of 1933 with respect to the shares shall be in effect, or (ii) in the opinion of counsel for the Company, the proposed purchase
shall be exempt from registration under that Act and the Option Holder shall have made such undertakings and agreements with the
Company as the Company may reasonably require, and (c) that such other steps, if any, as counsel for the Company shall consider
necessary to comply with any law applicable to the issue of such shares by the Company shall have been taken by the Company or
the Option Holder, or both. The certificates representing the shares purchased under the Option may contain such legends as counsel
for the Company shall consider necessary to comply with any applicable law.


 


13.     Payment
of Taxes. In general, no taxable income is realized by an Option Holder upon the grant of an incentive stock option. If stock
is issued to the Option Holder pursuant to the exercise of an incentive stock option, and if no Disqualifying Disposition (as defined
below) of such shares is made by the Option Holder within two years after the date of grant or within one year after the transfer
of such shares,, then upon the sale of such shares, any amount realized in excess of the option price will be taxed to the Option
Holder as a long-term capital gain and any loss sustained will be a long-term capital loss. However, if the Option Holder disposes
of the shares acquired on exercise before the later of the second anniversary of the date of grant or one year after the receipt
of the shares by the Option Holder (a “Disqualifying Disposition”), the Option Holder generally would include in ordinary
income in the year of the Disqualifying Disposition an amount equal to the excess of the fair market value of the shares at the
time of exercise (or, if less, the amount realized on the disposition of the shares), over the exercise price paid for the shares.
Subject to certain exceptions, an incentive stock option generally will not be treated as such if it is exercised more than three
months following termination of employment. If an incentive stock options is exercised at a time when it no longer qualifies as
an incentive stock option, it will be treated for tax purposes as a non-qualified stock option. The above discussion briefly
summarizes certain federal income tax consequences of incentive stock options under the Plan and does not attempt to describe all
possible federal or any foreign, state, local, or other tax consequences related to awards or tax consequences based upon particular
circumstances.


 


14.     Where
to Find More Information. The Company is subject to the information and reporting requirements of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), and in accordance therewith, files periodic reports, proxy statements
and other information with the SEC. Such reports, proxy statements and other information can be inspected and copied at the Public
Reference Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for
further information. Additionally, copies of reports, proxy statements and other information filed with the SEC electronically
by the Company may be inspected by accessing the SEC’s website at http://www.sec.gov or on the Company’s website at
http://www.arqule.com.


 




     


     


    

 


DATE OF PROSPECTUS: NOVEMBER 1, 2018 


 





 


The Company will furnish without charge
to each person who is eligible to participate in the Plan, upon such person’s written or oral request, a copy of these terms
and conditions and all of the documents incorporated by reference herein, other than exhibits to such documents (unless such exhibits
are specifically incorporated by reference into such documents). Requests for documentation, as well as any questions regarding
the Plan, should be directed to: Lee Colbert, Payroll Accountant.


 


15.    
Incorporation of Certain Documents by Reference. The following documents filed with the SEC by the Company are incorporated
in this Prospectus by reference:


 


		·	The Company’s Annual Report on Form 10-K for the year ended December 31, 2017 filed with
the Commission on March 5, 2018;



 


		·	The Company’s Current Reports on Form 8-K filed with the Commission on February 7, 2018,
February 22, 2018, April 17, 2018, May 10, 2018 and July 13, 2018;



 


		·	The Company’s Quarterly Report on Form 10-Q for the quarters ending March 31, 2018, June
30, 2018 and September 30, 2018 filed with the Commission on May 7, 2018, August 1, 2018, and October 31, 2018, respectively.



 


		·	The Company definitive Proxy Statement on Schedule 14A, filed with the Commission on March 29,
2018; and



 


		·	The description of the Company’s common stock contained in our Registration Statement on
Form 8-A, filed with the SEC on September 25, 1996, including any amendment or report filed for the purpose of updating such description.



 


All documents filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this prospectus and prior to the termination
of the offering of the common shares offered by this prospectus are deemed to be incorporated by reference into this prospectus
and to be a part hereof from the respective dates of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein is deemed to be modified or superseded for purposes of this prospectus to the
extent that a statement contained herein or in any other subsequently filed document which is also incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded is not deemed, except as so modified or superseded,
to constitute a part of this prospectus.