Document:

Exhibit 10.5(a)

 

CORVUS PHARMACEUTICALS, INC.
 2016 EQUITY INCENTIVE AWARD PLAN

 

ARTICLE 1.

 

PURPOSE

 

The purpose of the Corvus Pharmaceuticals, Inc. 2016 Equity Incentive Award Plan (as it may be amended from time to time, the “Plan”) is to promote the success and enhance the value of Corvus Pharmaceuticals, Inc. (the “Company”) by linking the individual interests of Directors, Employees and Consultants to those of the Company’s stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to the Company’s stockholders.  The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of Directors, Employees and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.

 

ARTICLE 2.

 

DEFINITIONS AND CONSTRUCTION

 

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise.  The singular pronoun shall include the plural where the context so indicates.

 

2.1                               “Administrator” shall mean the entity that conducts the general administration of the Plan as provided in Article 13 hereof.  With reference to the duties of the Administrator under the Plan which have been delegated to one or more persons pursuant to Section 13.6 hereof, or as to which the Board has assumed, the term “Administrator” shall refer to such person(s) unless the Committee or the Board has revoked such delegation or the Board has terminated the assumption of such duties.

 

2.2                               “Affiliate” shall mean any Parent or Subsidiary.

 

2.3                               “Applicable Accounting Standards” shall mean Generally Accepted Accounting Principles in the United States, International Financial Reporting Standards or such other accounting principles or standards as may apply to the Company’s financial statements under United States federal securities laws from time to time.

 

2.4                               “Applicable Law” shall mean any applicable law, including without limitation, (i) provisions of the Code, the Securities Act, the Exchange Act and any rules or regulations thereunder; (ii) corporate, securities, tax or other laws, statutes, rules, requirements or regulations, whether federal, state, local or foreign; and (iii) rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded.

 

2.5                               “Award” shall mean an Option, a Restricted Stock award, a Restricted Stock Unit award, a Performance Award, a Dividend Equivalent award, a Deferred Stock award, a

 

 

Deferred Stock Unit award, a Stock Payment award or a Stock Appreciation Right, in any case, which may be awarded or granted under the Plan.

 

2.6                               “Award Agreement” shall mean any written notice, agreement, terms and conditions, contract or other instrument or document evidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine consistent with the Plan.

 

2.7                               “Board” shall mean the Board of Directors of the Company.

 

2.8                               “Cause,” with respect to a Holder, shall mean “Cause” (or any term of similar effect) as defined in such Holder’s applicable Award Agreement or written employment or other agreement between a Holder and the Company or, if no such agreement exists or such agreement does not contain a definition of “Cause” (or term of similar effect), then “Cause” shall mean the occurrence of any of the following events: (i) the Holder’s gross negligence or willful misconduct in the performance of the duties and services with the Company, or breach of fiduciary duty involving personal profit; (ii) the Holder’s conviction of, or plea of guilty or nolo contendere to, a felony or crime involving moral turpitude (or any similar crime in any jurisdiction outside the United States); (iii) the Holder’s failure to satisfactorily perform the duties and responsibilities required of the Holder or as lawfully directed by the Company; (iv) the Holder’s breach of any employment confidentiality , intellectual property, non-disclosure, non-competition or other agreement with the Company, as may be amended from time to time; (v) the Holder’s material breach of a corporate code or policy, as such code or policy may be adopted from time to time; (vi) any act of fraud, embezzlement, material misappropriation or dishonesty committed by the Holder against the Company; or (vii) any acts, omissions or statements by the Holder which the Company determines to be materially detrimental or damaging to the reputation, operations, prospects or business relations of the Company. The determination by the Company that a Holder’s Termination of Service is either for Cause or without Cause shall be made by the Company in its sole discretion. Any determination by the Company that a Holder experienced a Termination of Service by reason of dismissal without Cause for the purposes of outstanding Awards held by such Holder shall have no effect upon any determination of the rights or obligations of the Company or such Holder for any other purpose.

 

2.9                               “Change in Control” shall mean the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

 

(a)                                 A transaction or series of transactions (other than an offering of Common Stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Subsidiaries, an employee benefit plan maintained by the Company or any of its Subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or

 

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(b)                                 During any period of two (2) consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new Director(s) (other than a Director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 2.9(a) or 2.9(c)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the Directors then still in office who either were Directors at the beginning of the two (2)-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or

 

(c)                                  The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:

 

(i)                                     which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

 

(ii)                                  after which no person or group beneficially owns voting securities representing fifty percent (50%) or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 2.9(c)(ii) as beneficially owning fifty percent (50%) or more of the combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction;  or

 

(d)                                 The Company’s stockholders approve a liquidation or dissolution of the Company.

 

Notwithstanding the foregoing, if a Change in Control constitutes a payment event or a toggle event with respect to any Award (or portion thereof) that provides for the deferral of compensation and is subject to Section 409A of the Code, to the extent required to avoid the imposition of additional taxes under Section 409A of the Code, the transaction or event described in subsection (a), (b), (c) or (d) with respect to such Award (or portion thereof) shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Section 409A of the Code.

 

The Committee shall have full and final authority, which shall be exercised in its sole discretion, to determine conclusively whether a Change in Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental

 

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matters relating thereto; provided that any exercise of authority in conjunction with a determination of whether a Change in Control is a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent with such regulation.

 

2.10                        “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, together with the regulations and official guidance promulgated thereunder.

 

2.11                        “Committee” shall mean the Compensation Committee of the Board, a subcommittee of the Compensation Committee of the Board or another committee or subcommittee of the Board, appointed as provided in Section 13.1 hereof.

 

2.12                        “Common Stock” shall mean the common stock of the Company, par value $0.0001 per share.

 

2.13                        “Company” shall have the meaning set forth in Article 1 hereof.

 

2.14                        “Consultant” shall mean any consultant or advisor engaged to provide services to the Company or any Affiliate who qualifies as a consultant or advisor under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8 Registration Statement or any successor Form thereto or, prior to the Public Trading Date, under Rule 701 of the Securities Act.

 

2.15                        “Covered Employee” shall mean any Employee who is, or could be, a “covered employee” within the meaning of Section 162(m) of the Code.

 

2.16                        “Deferred Stock” shall mean a right to receive Shares awarded under Section 10.4 hereof.

 

2.17                        “Deferred Stock Unit” shall mean a right to receive Shares awarded under Section 10.5 hereof.

 

2.18                        “Director” shall mean a member of the Board, as constituted from time to time.

 

2.19                        “Dividend Equivalent” shall mean a right to receive the equivalent value (in cash or Shares) of dividends paid on Shares, awarded under Section 10.2 hereof.

 

2.20                        “DRO” shall mean a “domestic relations order” as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended from time to time, or the rules thereunder.

 

2.21                        “Effective Date” shall mean immediately prior to the consummation of the Company’s initial public offering pursuant to its registration statement on Form S-1 filed January 4, 2016, provided that the Board has adopted the Plan prior to or on such date, subject to approval of the Plan by the Company’s stockholders.

 

2.22                        “Eligible Individual” shall mean any person who is an Employee, a Consultant or a Non-Employee Director, as determined by the Administrator.

 

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2.23                        “Employee” shall mean any officer or other employee (as determined in accordance with Section 3401(c) of the Code and the Treasury Regulations thereunder) of the Company or any Affiliate.

 

2.24                        “Equity Restructuring” shall mean a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of Shares (or other securities of the Company) or the share price of Common Stock (or other securities) and causes a change in the per share value of the Common Stock underlying outstanding stock-based Awards.

 

2.25                        “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

2.26                        “Fair Market Value” shall mean, as of any given date, the value of a Share determined as follows:

 

(a)                                 If the Common Stock is (i) listed on any established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) listed on any national market system or (iii) listed, quoted or traded on any automated quotation system, its Fair Market Value shall be the closing sales price for a Share as quoted on such exchange or system for such date or, if there is no closing sales price for a Share on the date in question, the closing sales price for a Share on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

 

(b)                                 If the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a Share on such date, the high bid and low asked prices for a Share on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

 

(c)                                  If the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Administrator in good faith.

 

Notwithstanding the foregoing, with respect to any Award granted after the effectiveness of the Company’s registration statement relating to its initial public offering and prior to the Public Trading Date, the Fair Market Value shall mean the initial public offering price of a Share as set forth in the Company’s final prospectus relating to its initial public offering filed with the Securities and Exchange Commission.

 

2.27                        “Good Reason,” with respect to a Holder, shall mean “Good Reason” (or any term of similar effect) as defined in such Holder’s applicable Award Agreement or written employment or other agreement between a Holder and the Company or, if no such agreement

 

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exists or such agreement does not contain a definition of “Good Reason” (or term of similar effect), then “Good Reason” shall mean, without the Holder’s prior written consent, (I) a material reduction of the Holder’s base salary; provided, however, that a material reduction in the Holder’s base salary pursuant to a salary reduction program affecting all or substantially all of the employees of the Company and that does not adversely affect Holder to a greater extent than other similarly situated employees shall not constitute Good Reason; or (II) the Holder being required to relocate the Holder’s primary work location to a facility or location that would increase the Holder’s one way commute distance by more than thirty-five (35) miles from the Holder’s primary work location as of immediately prior to such change. Notwithstanding the foregoing, a Holder’s Termination of Service shall not constitute a termination for “Good Reason” as a result of any event described in the preceding sentence unless (A) the Holder provides written notice outlining such conditions, acts or omissions to the Company within thirty (30) days after the first occurrence of such event, (B) to the extent correctable, the Company fails to remedy such circumstance or event within thirty (30) days following the Company’s receipt of such written notice and (C) the effective date of the Holder’s resignation for “Good Reason” is not later than thirty (30) days after the expiration of the Company’s cure period.

 

2.28                        “Greater Than 10% Stockholder” shall mean an individual then owning (within the meaning of Section 424(d) of the Code) more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any “parent corporation” or “subsidiary corporation” (as defined in Sections 424(e) and 424(f) of the Code, respectively).

 

2.29                        “Holder” shall mean a person who has been granted an Award.

 

2.30                        “Incentive Stock Option” shall mean an Option that is intended to qualify as an incentive stock option and conforms to the applicable provisions of Section 422 of the Code.

 

2.31                        “Non-Employee Director” shall mean a Director of the Company who is not an Employee.

 

2.32                        “Non-Employee Director Equity Compensation Policy” shall have the meaning set forth in Section 4.6 hereof.

 

2.33                        “Non-Qualified Stock Option” shall mean an Option that is not an Incentive Stock Option or which is designated as an Incentive Stock Option but does not meet the applicable requirements of Section 422 of the Code.

 

2.34                        “Option” shall mean a right to purchase Shares at a specified exercise price, granted under Article 6 hereof.  An Option shall be either a Non-Qualified Stock Option or an Incentive Stock Option; provided, however, that Options granted to Non-Employee Directors and Consultants shall only be Non-Qualified Stock Options.

 

2.35                        “Option Term” shall have the meaning set forth in Section 6.4 hereof.

 

2.36                        “Parent” shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities ending with the Company if each of the entities other than the Company beneficially owns, at the time of the determination, securities or interests

 

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representing more than fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

 

2.37                        “Performance Award” shall mean a cash bonus award, stock bonus award, performance award or incentive award that is paid in cash, Shares or a combination of both, awarded under Section 10.1 hereof.

 

2.38                        “Performance-Based Compensation” shall mean any compensation that is intended to qualify as “performance-based compensation” as described in Section 162(m)(4)(C) of the Code.

 

2.39                        “Performance Criteria” shall mean the criteria (and adjustments) that the Committee selects for an Award for purposes of establishing the Performance Goal or Performance Goals for a Performance Period, determined as follows:

 

(a)                                 The Performance Criteria that shall be used to establish Performance Goals are limited to the following:  (i) net earnings or losses (either before or after one or more of the following: (A) interest, (B) taxes, (C) depreciation, (D) amortization and (E) non-cash equity-based compensation expense); (ii) gross or net sales or revenue or sales or revenue growth; (iii) net income (either before or after taxes); (iv) adjusted net income; (v) operating income, earnings or profit (either before or after taxes); (vi) cash flow (including, but not limited to, cash flow return on investments, operating cash flow and free cash flow); (vii) return on assets; (viii) return on capital (or invested capital) and cost of capital; (ix) return on stockholders’ equity; (x) total stockholder return; (xi) return on sales; (xii) gross or net profit or operating margin; (xiii) costs, reductions in costs and cost control measures,; (xiv) funds from operations; (xv) expenses; (xvi) working capital; (xvii) earnings or loss per Share; (xviii) adjusted earnings or loss per share; (xix) price per Share or dividends per share (or apperciation in and/or maintenance of such price of dividends); (xx) regulatory body approval for commercialization of a product; (xxi) implementation or completion of critical projects; (xxii) market share; (xxiii) economic value; (xxiv) debt levels or reduction; (xxv) customer retention; (xxvi) sales-related goals; (xxvii) comparisons with other stock market indices; (xxviii) operating efficiency; (xxix) customer satisfaction and/or growth; (xxx) employee satisfaction; (xxxi) research and development achievements; (xxxii) financing and other capital raising transactions; (xxxiii) recruiting and maintaining personnel; and (xxxiv) year-end cash, any of which may be measured either in absolute terms for the Company or any department or operating unit of the Company or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices.

 

(b)                                 The Administrator may, in its sole discretion, provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Goals.  Such adjustments may include, but are not limited to, one or more of the following:  (i) items related to a change in accounting principle; (ii) items relating to financing activities; (iii) expenses for restructuring or productivity initiatives; (iv) other non-operating items; (v) items related to acquisitions; (vi) items attributable to the business operations of any entity acquired by the Company during the Performance Period; (vii) items related to the sale or disposition of a business or segment of a business; (viii) items related to discontinued operations that do not qualify as a segment of a business under Applicable Accounting Standards; (ix) items

 

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attributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period; (x) any other items of significant income or expense which are determined to be appropriate adjustments; (xi) items relating to unusual or extraordinary corporate transactions, events or developments, (xii)  items related to amortization of acquired intangible assets; (xiii) items that are outside the scope of the Company’s core, on-going business activities; (xiv) items related to acquired in-process research and development; (xv) items relating to changes in tax laws; (xvi) items relating to major licensing or partnership arrangements; (xvii) items relating to asset impairment charges; (xviii) items relating to gains or losses for litigation, arbitration and contractual settlements; or (xix) items relating to any other unusual or nonrecurring events or changes in Applicable Laws, accounting principles or business conditions.  For all Awards intended to qualify as Performance-Based Compensation, such determinations shall be made within the time prescribed by, and otherwise in compliance with, Section 162(m) of the Code.

 

2.40                        “Performance Goals” shall mean, with respect to a Performance Period, one or more goals established in writing by the Administrator for the Performance Period based upon one or more Performance Criteria.  Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of an Affiliate, a division, business unit or one or more individuals.  The achievement of each Performance Goal shall be determined, to the extent applicable, with reference to Applicable Accounting Standards.

 

2.41                        “Performance Period” shall mean one or more periods of time, which may be of varying and overlapping durations, as the Administrator may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Holder’s right to, and the payment of, a Performance Award.

 

2.42                        “Performance Stock Unit” shall mean a Performance Award awarded under Section 10.1 hereof which is denominated in units of value including dollar value of Shares.

 

2.43                        “Permitted Transferee” shall mean, with respect to a Holder, (a) prior to the Public Trading Date, any “family member” of the Holder, as defined under Rule 701 of the Securities Act and (b) on or after the Public Trading Date, any “family member” of the Holder, as defined under the General Instructions to Form S-8 Registration Statement under the Securities Act or any successor Form thereto, or any other transferee specifically approved by the Administrator, after taking into account Applicable Law.

 

2.44                        “Plan” shall have the meaning set forth in Article 1 hereof.

 

2.45                        “Prior Plan” shall mean the Corvus Pharmaceuticals 2014 Equity Incentive Plan, as such plan may be amended from time to time.

 

2.46                        “Program” shall mean any program adopted by the Administrator pursuant to the Plan containing the terms and conditions intended to govern a specified type of Award granted under the Plan and pursuant to which such type of Award may be granted under the Plan.

 

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2.47                        “Public Trading Date” shall mean the first date upon which the Common Stock is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system.

 

2.48                        “Restricted Stock” shall mean an award of Shares made under Article 8 hereof that is subject to certain restrictions and may be subject to risk of forfeiture or repurchase.

 

2.49                        “Restricted Stock Unit” shall mean a contractual right awarded under Article 9 hereof to receive a Share or the Fair Market Value thereof in cash.

 

2.50                        “Securities Act” shall mean the Securities Act of 1933, as amended.

 

2.51                        “Shares” shall mean shares of Common Stock.

 

2.52                        “Share Limit” shall have the meaning set forth in Section 3.1(a) hereof.

 

2.53                        “Stock Appreciation Right” shall mean a stock appreciation right granted under Article 11 hereof.

 

2.54                        “Stock Appreciation Right Term” shall have the meaning set forth in Section 11.4 hereof.

 

2.55                        “Stock Payment” shall mean (a) a payment in the form of Shares, or (b) an option or other right to purchase Shares, as part of a bonus, deferred compensation or other arrangement, awarded under Section 10.3 hereof.

 

2.56                        “Subsidiary” shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing more than fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

 

2.57                        “Substitute Award” shall mean an Award granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right.

 

2.58                        “Termination of Service” shall mean:

 

(a)                                 As to a Consultant, the time when the engagement of a Holder as a Consultant to the Company or an Affiliate is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the Company or any Affiliate.

 

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(b)                                 As to a Non-Employee Director, the time when a Holder who is a Non-Employee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Affiliate.

 

(c)                                  As to an Employee, the time when the employee-employer relationship between a Holder and the Company or any Affiliate is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Holder simultaneously commences or remains in employment or service with the Company or any Affiliate.

 

The Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to any Termination of Service, including, without limitation, the question of whether a Termination of Service resulted from a discharge for cause and all questions of whether particular leaves of absence constitute a Termination of Service; provided, however, that, with respect to Incentive Stock Options, unless the Administrator otherwise provides in the terms of any Program, the Award Agreement or otherwise, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Service only if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section.   For purposes of the Plan, a Holder’s employee-employer relationship or consultancy relations shall be deemed to be terminated in the event that the Affiliate employing or contracting with such Holder ceases to remain an Affiliate following any merger, sale of stock or other corporate transaction or event (including, without limitation, a spin-off).

 

ARTICLE 3.

 

SHARES SUBJECT TO THE PLAN

 

3.1                               Number of Shares.

 

(a)                                 Subject to Sections 14.1, 14.2 and 3.1(b) hereof, the aggregate number of Shares which may be issued or transferred pursuant to Awards under the Plan shall be equal to the sum of (i) three million, fifty-one thousand, seven hundred fifty (3,051,750) Shares, (ii) any of the Shares which as of the Effective Date are subject to awards under the Prior Plan that, on or after the Effective Date, terminate, expire or lapse for any reason without the delivery of Shares to the holder thereof (or with the repurchase of any Shares delivered at the original purchase price thereof), up to a maximum of one million, one hundred thirty-six thousand, two hundred twenty-nine (1,136,229) Shares, and (iii) an annual increase on the first day of each year beginning in 2017 and ending in 2026 equal to the lesser of (A) four percent (4%) of the Shares outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of Shares as determined by the Board (such sum, the “Share Limit”); provided, however, no more than 15,000,000 Shares may be issued upon the exercise of Incentive Stock Options.  Notwithstanding the foregoing, Shares added to the Share Limit pursuant to Section 3.1(a)(ii) or Section 3.1(a)(iii) hereof shall be available for issuance as Incentive Stock Options only to the extent that making

 

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such Shares available for issuance as Incentive Stock Options would not cause any Incentive Stock Option to cease to qualify as such.  Notwithstanding the foregoing, to the extent permitted under Applicable Law, Awards that provide for the delivery of Shares subsequent to the applicable grant date may be granted in excess of the Share Limit if such Awards provide for the forfeiture or cash settlement of such Awards to the extent that insufficient Shares remain under the Share Limit in this Section 3.1(a) at the time that Shares would otherwise be issued in respect of such Award.  As of the Effective Date, no further awards may be granted under the Prior Plan; however, any awards under the Prior Plan that are outstanding as of the Effective Date shall continue to be subject to the terms and conditions of the Prior Plan.

 

(b)                                 If any Shares subject to an Award are forfeited or expire or such Award is settled for cash (in whole or in part), the Shares subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future grants of Awards under the Plan. In addition, the following Shares shall be available for future grants of Awards under the Plan: (i) Shares tendered by a Holder or withheld by the Company in payment of the exercise price of an Option; (ii) Shares tendered by the Holder or withheld by the Company to satisfy any tax withholding obligation with respect to an Award; and (iii) Shares subject to Stock Appreciation Rights that are not issued in connection with the stock settlement of the Stock Appreciation Rights on exercise thereof. Notwithstanding anything to the contrary contained herein, Shares purchased on the open market with the cash proceeds from the exercise of Options shall not be available for future grants of Awards.  Any Shares repurchased by the Company under Section 8.4 hereof at the same price paid by the Holder or a lower price so that such Shares are returned to the Company will again be available for Awards.  The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the Shares available for issuance under the Plan.  Notwithstanding the provisions of this Section 3.1(b), no Shares may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive stock option under Section 422 of the Code.

 

(c)                                  Substitute Awards shall not reduce the Shares authorized for grant under the Plan.  Additionally, in the event that a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines has shares available under a pre-existing plan approved by its stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan; provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its Affiliates immediately prior to such acquisition or combination.

 

3.2                               Stock Distributed.  Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Common Stock, treasury Common Stock or Common Stock purchased on the open market.

 

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3.3                               Limitation on Number of Shares Subject to Awards to Non-Employee Directors. The maximum aggregate value of Awards (with such value determined as of the date of grant under Applicable Accounting Standards) that may be granted to any Non-Employee Director during any calendar year shall be $750,000.

 

ARTICLE 4.

 

GRANTING OF AWARDS

 

4.1                               Participation.  The Administrator may, from time to time, select from among all Eligible Individuals, those to whom an Award shall be granted and shall determine the nature and amount of each Award, which shall not be inconsistent with the requirements of the Plan.  Except as provided in Section 4.6 hereof regarding the grant of Awards pursuant to the Non-Employee Director Equity Compensation Policy, no Eligible Individual shall have any right to be granted an Award pursuant to the Plan.

 

4.2                               Award Agreement.  Each Award shall be evidenced by an Award Agreement that sets forth the terms, conditions and limitations for such Award, which may include the term of the Award, the provisions applicable in the event of the Holder’s Termination of Service, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.  Award Agreements evidencing Awards intended to qualify as Performance-Based Compensation shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 162(m) of the Code.  Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to meet the applicable provisions of Section 422 of the Code.

 

4.3                               Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan, the Plan, and any Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3 of the Exchange Act and any amendments thereto) that are requirements for the application of such exemptive rule.  To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

 

4.4                               At-Will Employment; Voluntary Participation.  Nothing in the Plan or in any Program or Award Agreement hereunder shall confer upon any Holder any right to continue as an Employee, Director or Consultant of the Company or any Affiliate, or shall interfere with or restrict in any way the rights of the Company and any Affiliate, which rights are hereby expressly reserved, to discharge any Holder at any time for any reason whatsoever, with or without cause, and with or without notice, or to terminate or change all other terms and conditions of employment or engagement, except to the extent expressly provided otherwise in a written agreement between the Holder and the Company or any Affiliate.  Participation by each Holder in the Plan shall be voluntary and nothing in the Plan shall be construed as mandating that any Eligible Individual participate in the Plan.

 

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4.5                               Foreign Holders.  Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in countries other than the United States in which the Company and its Affiliates operate or have Employees, Non-Employee Directors or Consultants, or in order to comply with the requirements of any foreign securities exchange, the Administrator, in its sole discretion, shall have the power and authority to: (a) determine which Affiliates shall be covered by the Plan; (b) determine which Eligible Individuals outside the United States are eligible to participate in the Plan; (c) modify the terms and conditions of any Award granted to Eligible Individuals outside the United States to comply with applicable foreign laws or listing requirements of any such foreign securities exchange; (d) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modifications may be attached to the Plan as appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Sections 3.1 and 3.3 hereof; and (e) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals or listing requirements of any such foreign securities exchange.  Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate Applicable Law.  For purposes of the Plan, all references to foreign laws, rules, regulations or taxes shall be references to the laws, rules, regulations and taxes of any applicable jurisdiction other than the United States or a political subdivision thereof.

 

4.6                               Non-Employee Director Awards.  The Administrator may, in its discretion, provide that Awards granted to Non-Employee Directors shall be granted pursuant to a written non-discretionary formula established by the Administrator (the “Non-Employee Director Equity Compensation Policy”), subject to the limitations of the Plan.  The Non-Employee Director Equity Compensation Policy shall set forth the type of Award(s) to be granted to Non-Employee Directors, the number of Shares to be subject to Non-Employee Director Awards, the conditions on which such Awards shall be granted, become exercisable and/or payable and expire, and such other terms and conditions as the Administrator shall determine in its discretion.  The Non-Employee Director Equity Compensation Policy may be modified or terminated by the Administrator from time to time in its discretion.

 

4.7                               Stand-Alone and Tandem Awards.  Awards granted pursuant to the Plan may, in the sole discretion of the Administrator, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan.  Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant of such other Awards.

 

ARTICLE 5.

 

PROVISIONS APPLICABLE TO AWARDS INTENDED TO QUALIFY AS PERFORMANCE-BASED COMPENSATION.

 

5.1                               Purpose.  The Committee, in its sole discretion, may determine at the time an Award is granted or at any time thereafter whether any Award is intended to qualify as Performance-Based Compensation. If the Committee, in its sole discretion, decides to grant such an Award to an Eligible Individual that is intended to qualify as Performance-Based

 

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Compensation, then the provisions of this Article 5 shall control over any contrary provision contained in the Plan.  The Administrator may in its sole discretion grant Awards to other Eligible Individuals that are based on Performance Criteria or Performance Goals but that do not satisfy the requirements of this Article 5 and that are not intended to qualify as Performance-Based Compensation.  Unless otherwise specified by the Committee at the time of grant, the Performance Criteria with respect to an Award intended to be Performance-Based Compensation payable to a Covered Employee shall be determined on the basis of Applicable Accounting Standards.

 

5.2                               Applicability.  The grant of an Award to an Eligible Individual for a particular Performance Period shall not require the grant of an Award to such Eligible Individual in any subsequent Performance Period and the grant of an Award to any one Eligible Individual shall not require the grant of an Award to any other Eligible Individual in such period or in any other period.

 

5.3                               Types of Awards.  Notwithstanding anything in the Plan to the contrary, the Committee may grant any Award to an Eligible Individual intended to qualify as Performance-Based Compensation, including, without limitation, Restricted Stock the restrictions with respect to which lapse upon the attainment of specified Performance Goals, Restricted Stock Units that vest and become payable upon the attainment of specified Performance Goals and any Performance Awards that vest or become exercisable or payable upon the attainment of one or more specified Performance Goals.

 

5.4                               Procedures with Respect to Performance-Based Awards.  To the extent necessary to comply with the requirements of Section 162(m)(4)(C) of the Code, with respect to any Award granted to one or more Eligible Individuals which is intended to qualify as Performance-Based Compensation, no later than ninety (90) days following the commencement of any Performance Period or any designated fiscal period or period of service (or such earlier time as may be required under Section 162(m) of the Code), the Committee shall, in writing, (a) designate one or more Eligible Individuals, (b) select the Performance Criteria applicable to the Performance Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period based on the Performance Criteria, and (d) specify the relationship between the Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be earned by each Covered Employee for such Performance Period.  Following the completion of each Performance Period, the Committee shall certify in writing whether and the extent to which the applicable Performance Goals have been achieved for such Performance Period.  In determining the amount earned under such Awards, unless otherwise provided in an applicable Program or Award Agreement, the Committee shall have the right to reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant, including the assessment of individual or corporate performance for the Performance Period.

 

5.5                               Payment of Performance-Based Awards.  Unless otherwise provided in the applicable Program or Award Agreement or pursuant to Section 14.2 hereof and only to the extent otherwise permitted by Section 162(m)(4)(C) of the Code, as to an Award that is intended to qualify as Performance-Based Compensation, the Holder must be employed by the

 

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Company or an Affiliate throughout the applicable Performance Period.  Unless otherwise provided in the applicable Performance Goals, Program or Award Agreement, a Holder shall be eligible to receive payment pursuant to such Awards for a Performance Period only if and to the extent the Performance Goals for such applicable Performance Period are achieved.

 

5.6                               Additional Limitations.  Notwithstanding any other provision of the Plan and except as otherwise determined by the Administrator, any Award which is granted to an Eligible Individual and is intended to qualify as Performance-Based Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code or any regulations or rulings issued thereunder that are requirements for qualification as Performance-Based Compensation, and the Plan and any applicable Program and Award Agreement shall be deemed amended to the extent necessary to conform to such requirements.

 

ARTICLE 6.

 

GRANTING OF OPTIONS

 

6.1                               Granting of Options to Eligible Individuals.  The Administrator is authorized to grant Options to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine which shall not be inconsistent with the Plan.

 

6.2                               Qualification of Incentive Stock Options.  No Incentive Stock Option shall be granted to any person who is not an Employee of the Company or any subsidiary corporation or parent corporation (as defined in Section 424(f) and (e), respectively, of the Code) of the Company.  No person who qualifies as a Greater Than 10% Stockholder may be granted an Incentive Stock Option unless such Incentive Stock Option conforms to the applicable provisions of Section 422 of the Code.  Any Incentive Stock Option granted under the Plan may be modified by the Administrator, with the consent of the Holder, to disqualify such Option from treatment as an “incentive stock option” under Section 422 of the Code.  To the extent that the aggregate fair market value of stock with respect to which “incentive stock options” (within the meaning of Section 422 of the Code, but without regard to Section 422(d) of the Code) are exercisable for the first time by a Holder during any calendar year under the Plan, and all other plans of the Company and any subsidiary or parent corporation thereof (each as defined in Section 424(f) and (e), respectively, of the Code), exceeds $100,000, the Options shall be treated as Non-Qualified Stock Options to the extent required by Section 422 of the Code.  The rule set forth in the preceding sentence shall be applied by taking Options and other “incentive stock options” into account in the order in which they were granted and the Fair Market Value of stock shall be determined as of the time the respective options were granted.  In addition, to the extent that any Options otherwise fail to qualify as Incentive Stock Options, such Options shall be treated as Nonqualified Stock Options.

 

6.3                               Option Exercise Price.  Except as provided in Article 14 hereof, the exercise price per Share subject to each Option shall be set by the Administrator, but shall not be less than one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted (or, as to Incentive Stock Options, on the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).  In addition, in the case of Incentive Stock Options granted to a Greater Than 10% Stockholder, such price shall not be less than one

 

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hundred ten percent (110%) of the Fair Market Value of a Share on the date the Option is granted (or the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).

 

6.4                               Option Term.  The term of each Option (the “Option Term”) shall be set by the Administrator in its sole discretion; provided, however, that the Option Term shall not be more than ten (10) years from the date the Option is granted, or five (5) years from the date an Incentive Stock Option is granted to a Greater Than 10% Stockholder.  The Administrator shall determine the time period, including the time period following a Termination of Service, during which the Holder has the right to exercise the vested Options, which time period may not extend beyond the last day of the Option Term.  Except as limited by the requirements of Section 409A or Section 422 of the Code and regulations and rulings thereunder, the Administrator may extend the Option Term of any outstanding Option, may extend the time period during which vested Options may be exercised following any Termination of Service of the Holder, and may amend, subject to Section 14.1, any other term or condition of such Option relating to such a Termination of Service.

 

6.5                               Option Vesting.

 

(a)                                 The period during which the right to exercise, in whole or in part, an Option vests in the Holder shall be set by the Administrator and the Administrator may determine that an Option may not be exercised in whole or in part for a specified period after it is granted.  Such vesting may be based on service with the Company or any Affiliate, any of the Performance Criteria, or any other criteria selected by the Administrator.  At any time after the grant of an Option, the Administrator may, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the vesting of the Option, including following a Termination of Service; provided, that in no event shall an Option become exercisable following its expiration, termination or forfeiture.

 

(b)                                 No portion of an Option which is unexercisable at a Holder’s Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator either in a Program, an Award Agreement or by action of the Administrator following the grant of the Option.

 

6.6                               Substitute Awards.  Notwithstanding the foregoing provisions of this Article 6 to the contrary, in the case of an Option that is a Substitute Award, the price per share of the shares subject to such Option may be less than the Fair Market Value per share on the date of grant; provided that the excess of:  (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate exercise price thereof does not exceed the excess of:  (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares.

 

6.7                               Substitution of Stock Appreciation Rights.  The Administrator may provide in an applicable Program or Award Agreement evidencing the grant of an Option that the

 

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Administrator, in its sole discretion, shall have the right to substitute a Stock Appreciation Right for such Option at any time prior to or upon exercise of such Option; provided that such Stock Appreciation Right shall be exercisable with respect to the same number of Shares for which such substituted Option would have been exercisable, and shall also have the same exercise price, vesting schedule and remaining Option Term as the substituted Option.

 

ARTICLE 7.

 

EXERCISE OF OPTIONS

 

7.1                               Partial Exercise.  An exercisable Option may be exercised in whole or in part.  However, an Option shall not be exercisable with respect to fractional Shares and the Administrator may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number of Shares.

 

7.2                               Manner of Exercise.  All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the Company, or such other person or entity designated by the Administrator, or his, her or its office, as applicable:

 

(a)                                 A written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised.  The notice shall be signed by the Holder or other person then entitled to exercise the Option or such portion of the Option;

 

(b)                                 Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with all Applicable Laws.  The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars;

 

(c)                                  In the event that the Option shall be exercised pursuant to Section 12.3 hereof by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Option, as determined in the sole discretion of the Administrator; and

 

(d)                                 Full payment of the exercise price and applicable withholding taxes to the stock administrator of the Company for the Shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by Section 12.1 and 12.2 hereof.

 

7.3                               Notification Regarding Disposition.  The Holder shall give the Company prompt written or electronic notice of any disposition of Shares acquired by exercise of an Incentive Stock Option which occurs within (a) two (2) years from the date of grant (including the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code) of such Option to such Holder, or (b) one (1) year after the transfer of such Shares to such Holder.

 

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ARTICLE 8.

 

AWARD OF RESTRICTED STOCK

 

8.1                               Award of Restricted Stock.

 

(a)                                 The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determine the terms and conditions, including the restrictions applicable to each award of Restricted Stock, which terms and conditions shall not be inconsistent with the Plan, and may impose such conditions on the issuance of such Restricted Stock as it deems appropriate.

 

(b)                                 The Administrator shall establish the purchase price, if any, and form of payment for Restricted Stock; provided, however, that if a purchase price is charged, such purchase price shall be no less than the par value, if any, of the Shares to be purchased, unless otherwise permitted by Applicable Law.  In all cases, legal consideration shall be required for each issuance of Restricted Stock to the extent required by Applicable Law.

 

8.2                               Rights as Stockholders.  Subject to Section 8.4 hereof, upon issuance of Restricted Stock, the Holder shall have, unless otherwise provided by the Administrator, all the rights of a stockholder with respect to said Shares, subject to the restrictions in the applicable Program or in each individual Award Agreement, including the right to receive all dividends and other distributions paid or made with respect to the Shares; provided, however, that, in the sole discretion of the Administrator, any extraordinary distributions with respect to the Shares shall be subject to the restrictions set forth in Section 8.3 hereof.  In addition, with respect to a share of Restricted Stock with performance-based vesting, dividends which are paid prior to vesting shall only be paid out to the Holder to the extent that the performance-based vesting conditions are subsequently satisfied and the share of Restricted Stock vests.

 

8.3                               Restrictions.  All shares of Restricted Stock (including any shares received by Holders thereof with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall, in the terms of the applicable Program or Award Agreement, be subject to such restrictions and vesting requirements as the Administrator shall provide.  Such restrictions may include, without limitation, restrictions concerning voting rights and transferability and such restrictions may lapse separately or in combination at such times and pursuant to such circumstances or based on such criteria as selected by the Administrator, including, without limitation, criteria based on the Holder’s duration of employment, directorship or consultancy with the Company, the Performance Criteria, Company or Affiliate performance, individual performance or other criteria selected by the Administrator.  By action taken after the Restricted Stock is issued, the Administrator may, on such terms and conditions as it may determine to be appropriate, accelerate the vesting of such Restricted Stock by removing any or all of the restrictions imposed by the terms of any applicable Program and/or the Award Agreement.  Restricted Stock may not be sold or encumbered until all restrictions are terminated, lapse or expire.

 

8.4                               Repurchase or Forfeiture of Restricted Stock.  Except as otherwise determined by the Administrator at the time of the grant of the Award or thereafter, if no price was paid by

 

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the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Holder’s rights in unvested Restricted Stock then subject to restrictions shall lapse and such Restricted Stock shall be surrendered to the Company and cancelled without consideration. If a price was paid by the Holder for the Restricted Stock, upon a Termination of Service during the applicable restriction period, the Company shall have the right to repurchase from the Holder the unvested Restricted Stock then subject to restrictions at a cash price per Share equal to the price paid by the Holder for such Restricted Stock or such other amount as may be specified in an applicable Program or the Award Agreement.  Notwithstanding the foregoing, the Administrator in its sole discretion may provide that in the event of certain events, including a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service or any other event, the Holder’s rights in unvested Restricted Stock shall not lapse, such Restricted Stock shall vest and, if applicable, the Company shall not have a right of repurchase.

 

8.5                               Certificates for Restricted Stock.  Restricted Stock may be evidenced in such manner as the Administrator shall determine.  Certificates or book entries evidencing shares of Restricted Stock must include an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock.  The Company may, in its sole discretion, (a) retain physical possession of any stock certificate evidencing shares of Restricted Stock until the restrictions thereon shall have lapsed and/or (b) require that the stock certificates evidencing shares of Restricted Stock be held in custody by a designated escrow agent (which may but need not be the Company) until the restrictions thereon shall have lapsed, and that the Holder deliver a stock power, endorsed in blank, relating to such Restricted Stock.

 

8.6                               Section 83(b) Election.  If a Holder makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Holder would otherwise be taxable under Section 83(a) of the Code, the Holder shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service.

 

ARTICLE 9.
 AWARD OF RESTRICTED STOCK UNITS

 

9.1                               Grant of Restricted Stock Units.  The Administrator is authorized to grant Awards of Restricted Stock Units to any Eligible Individual selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator.

 

9.2                               Term.  Except as otherwise provided herein, the term, if any, of a Restricted Stock Unit award shall be set by the Administrator in its sole discretion.

 

9.3                               Purchase Price.  The Administrator shall specify the purchase price, if any, to be paid by the Holder to the Company with respect to any Restricted Stock Unit award; provided, however, that value of the consideration shall not be less than the par value of a Share, unless otherwise permitted by Applicable Law.

 

9.4                               Vesting of Restricted Stock Units.  At the time of grant, the Administrator shall specify the date or dates on which the Restricted Stock Units shall become fully vested and

 

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nonforfeitable, and may specify such conditions to vesting as it deems appropriate, including, without limitation, vesting based upon the Holder’s duration of service to the Company or any Affiliate, one or more Performance Criteria, Company or Affiliate performance, individual performance or other specific criteria, in each case on a specified date or dates or over any period or periods, as determined by the Administrator.

 

9.5                               Maturity and Payment.  At the time of grant, the Administrator shall specify the maturity date applicable to each grant of Restricted Stock Units which shall be no earlier than the vesting date or dates of the Award and may be determined at the election of the Holder (if permitted by the applicable Award Agreement); provided that, except as otherwise determined by the Administrator and set forth in any applicable Award Agreement, and subject to compliance with Section 409A of the Code, in no event shall the maturity date relating to each Restricted Stock Unit occur following the later of (a) the fifteenth (15th) day of the third (3rd) month following the end of calendar year in which the Restricted Stock Unit vests; or (b) the fifteenth (15th) day of the third (3rd) month following the end of the Company’s fiscal year in which the Restricted Stock Unit vests.  On the maturity date, the Company shall, subject to Section 12.4(e) hereof, transfer to the Holder one unrestricted, fully transferable Share for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited, or, in the sole discretion of the Administrator, an amount in cash equal to the Fair Market Value of such Shares on the maturity date or a combination of cash and Shares as determined by the Administrator.

 

9.6                               Payment upon Termination of Service.  An Award of Restricted Stock Units shall only be payable while the Holder is an Employee, a Consultant or a member of the Board, as applicable; provided, however, that the Administrator, in its sole and absolute discretion may provide (in an Award Agreement or otherwise) that a Restricted Stock Unit award may be paid subsequent to a Termination of Service in certain events, including a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service.

 

9.7                               No Rights as a Stockholder.  Unless otherwise determined by the Administrator,  a Holder of Restricted Stock Units shall possess no incidents of ownership with respect to the Shares represented by such Restricted Stock Units, unless and until such Shares are transferred to the Holder pursuant to the terms of this Plan and the Award Agreement.

 

9.8                               Dividend Equivalents.  Subject to Section 10.2 hereof, the Administrator may, in its sole discretion, provide that Dividend Equivalents shall be earned by a Holder of Restricted Stock Units based on dividends declared on the Common Stock, to be credited as of dividend payment dates with respect to dividends with record dates that occur during the period between the date an Award of Restricted Stock Units is granted to a Holder and the maturity date of such Award.

 

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ARTICLE 10.

 

AWARD OF PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, STOCK PAYMENTS, DEFERRED STOCK, DEFERRED STOCK UNITS

 

10.1                        Performance Awards.

 

(a)                                 The Administrator is authorized to grant Performance Awards, including Awards of Performance Stock Units, to any Eligible Individual and to determine whether such Performance Awards shall be Performance-Based Compensation.  The value of Performance Awards, including Performance Stock Units, may be linked to any one or more of the Performance Criteria or other specific criteria determined by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator.  Performance Awards, including Performance Stock Unit awards may be paid in cash, Shares, or a combination of cash and Shares, as determined by the Administrator.

 

(b)                                 Without limiting Section 10.1(a) hereof, the Administrator may grant Performance Awards to any Eligible Individual in the form of a cash bonus payable upon the attainment of objective Performance Goals, or such other criteria, whether or not objective, which are established by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator.  Any such bonuses paid to a Holder which are intended to be Performance-Based Compensation shall be based upon objectively determinable bonus formulas established in accordance with the provisions of Article 5 hereof.

 

10.2                        Dividend Equivalents.

 

(a)                                 Dividend Equivalents may be granted by the Administrator based on dividends declared on the Common Stock, to be credited as of dividend payment dates with respect to dividends with record dates that occur during the period between the date an Award is granted to a Holder and the date such Award vests, is exercised, is distributed or expires, as determined by the Administrator.  Such Dividend Equivalents shall be converted to cash or additional Shares by such formula and at such time and subject to such limitations as may be determined by the Administrator.  In addition, Dividend Equivalents with respect to Awards with performance-based vesting that are based on dividends which are paid prior to the vesting of such Award shall only be paid out to the Holder to the extent that the performance-based vesting conditions are subsequently satisfied and the Award vests.

 

(b)                                 Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights.

 

10.3                        Stock Payments.  The Administrator is authorized to make Stock Payments to any Eligible Individual.  The number or value of Shares of any Stock Payment shall be determined by the Administrator and may be based upon one or more Performance Criteria or any other specific criteria, including service to the Company or any Affiliate, determined by the Administrator.  Shares underlying a Stock Payment which is subject to a vesting schedule or other conditions or criteria set by the Administrator will not be issued until those conditions have been satisfied.  Unless otherwise provided by the Administrator, a Holder of a Stock Payment shall have no rights as a Company stockholder with respect to such Stock Payment

 

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until such time as the Stock Payment has vested (if applicable) and the Shares underlying the Award have been issued to the Holder.  Stock Payments may, but are not required to, be made in lieu of base salary, bonus, fees or other cash compensation otherwise payable to such Eligible Individual.

 

10.4                        Deferred Stock.  The Administrator is authorized to grant Deferred Stock to any Eligible Individual.  The number of shares of Deferred Stock shall be determined by the Administrator and may (but is not required to) be based on one or more Performance Criteria or other specific criteria, including service to the Company or any Affiliate, as the Administrator determines, in each case on a specified date or dates or over any period or periods determined by the Administrator.  Shares underlying a Deferred Stock award which is subject to a vesting schedule or other conditions or criteria set by the Administrator will be issued on the vesting date(s) or date(s) that those conditions and criteria have been satisfied, as applicable.  Unless otherwise provided by the Administrator, a Holder of Deferred Stock shall have no rights as a Company stockholder with respect to such Deferred Stock until such time as the Award has vested and any other applicable conditions and/or criteria have been satisfied and the Shares underlying the Award have been issued to the Holder.

 

10.5                        Deferred Stock Units.  The Administrator is authorized to grant Deferred Stock Units to any Eligible Individual.  The number of Deferred Stock Units shall be determined by the Administrator and may (but is not required to) be based on one or more Performance Criteria or other specific criteria, including service to the Company or any Affiliate, as the Administrator determines, in each case on a specified date or dates or over any period or periods determined by the Administrator.  Each Deferred Stock Unit shall entitle the Holder thereof to receive one Share on the date the Deferred Stock Unit becomes vested or upon a specified settlement date thereafter (which settlement date may (but is not required to) be the date of the Holder’s Termination of Service).  Shares underlying a Deferred Stock Unit award which is subject to a vesting schedule or other conditions or criteria set by the Administrator will not be issued until on or following the date that those conditions and criteria have been satisfied.  Unless otherwise provided by the Administrator, a Holder of Deferred Stock Units shall have no rights as a Company stockholder with respect to such Deferred Stock Units until such time as the Award has vested and any other applicable conditions and/or criteria have been satisfied and the Shares underlying the Award have been issued to the Holder.

 

10.6                        Term.  The term, if any, of a Performance Award, Dividend Equivalent award, Stock Payment award, Deferred Stock award and/or Deferred Stock Unit award shall be set by the Administrator in its sole discretion.

 

10.7                        Purchase Price.  The Administrator may establish the purchase price of a Performance Award, Shares distributed as a Stock Payment award, shares of Deferred Stock or Shares distributed pursuant to a Deferred Stock Unit award; provided, however, that value of the consideration shall not be less than the par value of a Share, unless otherwise permitted by Applicable Law.

 

10.8                        Termination of Service.  A Performance Award, Stock Payment award, Dividend Equivalent award, Deferred Stock award and/or Deferred Stock Unit award is distributable only while the Holder is an Employee, Director or Consultant, as applicable.  The

 

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Administrator, however, in its sole discretion may provide that the Performance Award, Dividend Equivalent award, Stock Payment award, Deferred Stock award and/or Deferred Stock Unit award may be distributed subsequent to a Termination of Service in certain events, including a Change in Control, the Holder’s death, retirement or disability or any other specified Termination of Service.

 

ARTICLE 11.

 

AWARD OF STOCK APPRECIATION RIGHTS

 

11.1                        Grant of Stock Appreciation Rights.

 

(a)                                 The Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine consistent with the Plan.

 

(b)                                 A Stock Appreciation Right shall entitle the Holder (or other person entitled to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference obtained by subtracting the exercise price per Share of the Stock Appreciation Right from the Fair Market Value on the date of exercise of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right shall have been exercised, subject to any limitations the Administrator may impose.  Except as described in (c) below or in Section 14.2 hereof, the exercise price per Share subject to each Stock Appreciation Right shall be set by the Administrator, but shall not be less than one hundred percent (100%) of the Fair Market Value on the date the Stock Appreciation Right is granted.

 

(c)                                  Notwithstanding the foregoing provisions of Section 11.1(b) hereof to the contrary, in the case of a Stock Appreciation Right that is a Substitute Award, the price per Share of the Shares subject to such Stock Appreciation Right may be less than one hundred percent (100%) of the Fair Market Value per share on the date of grant; provided that the excess of:  (i) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (ii) the aggregate exercise price thereof does not exceed the excess of:  (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares.

 

11.2                        Stock Appreciation Right Vesting.

 

(a)                                 The period during which the right to exercise, in whole or in part, a Stock Appreciation Right vests in the Holder shall be set by the Administrator and the Administrator may determine that a Stock Appreciation Right may not be exercised in whole or in part for a specified period after it is granted.  Such vesting may be based on service with the Company or any Affiliate, any of the Performance Criteria or any other criteria selected by the Administrator.  At any time after grant of a Stock Appreciation Right, the Administrator may, in its sole

 

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discretion and subject to whatever terms and conditions it selects, accelerate the period during which a Stock Appreciation Right vests.

 

(b)                                 No portion of a Stock Appreciation Right which is unexercisable at a Holder’s Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator either in the applicable Program or Award Agreement or by action of the Administrator following the grant of the Stock Appreciation Right, including following a Termination of Service; provided, that in no event shall a Stock Appreciation Right become exercisable following its expiration, termination or forfeiture.

 

11.3                        Manner of Exercise.  All or a portion of an exercisable Stock Appreciation Right shall be deemed exercised upon delivery of all of the following to the stock administrator of the Company, or such other person or entity designated by the Administrator, or his, her or its office, as applicable:

 

(a)                                 A written or electronic notice complying with the applicable rules established by the Administrator stating that the Stock Appreciation Right, or a portion thereof, is exercised.  The notice shall be signed by the Holder or other person then entitled to exercise the Stock Appreciation Right or such portion of the Stock Appreciation Right;

 

(b)                                 Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with all Applicable Laws.  The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance; and

 

(c)                                  In the event that the Stock Appreciation Right shall be exercised pursuant to this Section 11.3 hereof by any person or persons other than the Holder, appropriate proof of the right of such person or persons to exercise the Stock Appreciation Right.

 

11.4                        Stock Appreciation Right Term.  The term of each Stock Appreciation Right (the “Stock Appreciation Right Term”) shall be set by the Administrator in its sole discretion; provided, however, that the term shall not be more than ten (10) years from the date the Stock Appreciation Right is granted.  The Administrator shall determine the time period, including the time period following a Termination of Service, during which the Holder has the right to exercise the vested Stock Appreciation Rights, which time period may not extend beyond the expiration date of the Stock Appreciation Right Term.  Except as limited by the requirements of Section 409A of the Code and regulations and rulings thereunder or the first sentence of this Section 11.4, the Administrator may extend the Stock Appreciation Right Term of any outstanding Stock Appreciation Right, may extend the time period during which vested Stock Appreciation Rights may be exercised following any Termination of Service of the Holder, and may amend, subject to Section 14.1, any other term or condition of such Stock Appreciation Right relating to such a Termination of Service.

 

11.5                        Payment.  Payment of the amounts payable with respect to Stock Appreciation Rights pursuant to this Article 11 shall be in cash, Shares (based on its Fair Market Value as of the date the Stock Appreciation Right is exercised), or a combination of both, as determined by the Administrator.

 

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ARTICLE 12.

 

ADDITIONAL TERMS OF AWARDS

 

12.1                        Payment.  The Administrator shall determine the methods by which payments by any Holder with respect to any Awards granted under the Plan shall be made, including, without limitation: (a) cash or check, (b) Shares (including, in the case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the Award) or Shares held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences, in each case, having a Fair Market Value on the date of delivery equal to the aggregate payments required, (c) delivery of a written or electronic notice that the Holder has placed a market sell order with a broker with respect to Shares then issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate payments required; provided that payment of such proceeds is then made to the Company upon settlement of such sale, or (d) other form of legal consideration acceptable to the Administrator.  The Administrator shall also determine the methods by which Shares shall be delivered or deemed to be delivered to Holders.  Notwithstanding any other provision of the Plan to the contrary, no Holder who is a Director or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment, with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.

 

12.2                        Tax Withholding.  The Company or any Affiliate shall have the authority and the right to deduct or withhold, or require a Holder to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Holder’s FICA or employment tax or other social security contribution obligation) required by law to be withheld with respect to any taxable event concerning a Holder arising as a result of the Plan.  The Administrator may in its sole discretion and in satisfaction of the foregoing requirement determine to satisfy, or allow a Holder to satisfy, such obligations by any payment means described in Section 12.1 hereof, including without limitation, by withholding Shares, or allowing such Holder to elect to have the Company withhold Shares, otherwise issuable under an Award (or providing for the surrender of Shares). The number of Shares which may be so withheld or surrendered shall be limited to the number of Shares which have a fair market value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income.  The Administrator shall determine the fair market value of the Shares, consistent with applicable provisions of the Code, for tax withholding obligations due in connection with a broker-assisted cashless Option or Stock Appreciation Right exercise involving the sale of Shares to pay the Option or Stock Appreciation Right exercise price or any tax withholding obligation.

 

12.3                        Transferability of Awards.

 

(a)                                 Except as otherwise provided in Sections 12.3(b) and 12.3(c) hereof:

 

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(i)                                     No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares have lapsed;

 

(ii)                                  No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Holder or the Holder’s successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) unless and until such Award has been exercised, or the Shares underlying such Award have been issued, and all restrictions applicable to such Shares have lapsed, and any attempted disposition of an Award prior to the satisfaction of these conditions shall be null and void and of no effect, except to the extent that such disposition is permitted by clause (i) of this Section 12.3(a); and

 

(iii)                               During the lifetime of the Holder, only the Holder may exercise an Award (or any portion thereof) granted to such Holder under the Plan, unless it has been disposed of pursuant to a DRO; after the death of the Holder, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Program or Award Agreement, be exercised by the Holder’s personal representative or by any person empowered to do so under the deceased Holder’s will or under the then applicable laws of descent and distribution.

 

(b)                                 Notwithstanding Section 12.3(a) hereof, the Administrator, in its sole discretion, may determine to permit a Holder or a Permitted Transferee of such Holder to transfer an Award other than an Incentive Stock Option (unless such Incentive Stock Option is to become a Non-Qualified Stock Option) to any one or more Permitted Transferees, subject to the following terms and conditions:  (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee (other than to another Permitted Transferee of the applicable Holder) other than by will or the laws of descent and distribution or pursuant to a DRO; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Holder (other than the ability to further transfer the Award); and (iii) the Holder (or transferring Permitted Transferee) and the Permitted Transferee shall execute any and all documents requested by the Administrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under Applicable Law and (C) evidence the transfer.

 

(c)                                  Notwithstanding Section 12.3(a) hereof, a Holder may, in the manner determined by the Administrator, designate a beneficiary to exercise the rights of the Holder and to receive any distribution with respect to any Award upon the Holder’s death.  A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Program and/or Award Agreement applicable to the Holder, except to the extent the Plan, an applicable Program and/or the Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate

 

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by the Administrator.  If the Holder is married or a domestic partner in a domestic partnership qualified under Applicable Law and resides in a community property state, a designation of a person other than the Holder’s spouse or domestic partner, as applicable, as the Holder’s beneficiary with respect to more than fifty percent (50%) of the Holder’s interest in the Award shall not be effective without the prior written or electronic consent of the Holder’s spouse or domestic partner, as applicable.  If no beneficiary has been designated or survives the Holder, payment shall be made to the person entitled thereto pursuant to the Holder’s will or the laws of descent and distribution.  Subject to the foregoing, a beneficiary designation may be changed or revoked by a Holder at any time; provided that the change or revocation is filed with the Administrator prior to the Holder’s death.

 

12.4                        Conditions to Issuance of Shares.

 

(a)                                 Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates or make any book entries evidencing Shares pursuant to the exercise of any Award, unless and until the Board or the Committee has determined, with advice of counsel, that the issuance of such Shares is in compliance with all Applicable Laws, and the Shares are covered by an effective registration statement or applicable exemption from registration.  In addition to the terms and conditions provided herein, the Board or the Committee may require that a Holder make such reasonable covenants, agreements, and representations as the Board or the Committee, in its discretion, deems advisable in order to comply with any such Applicable Law.

 

(b)                                 All Share certificates delivered pursuant to the Plan and all Shares issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with Applicable Law.  The Administrator may place legends on any Share certificate or book entry to reference restrictions applicable to the Shares.

 

(c)                                  The Administrator shall have the right to require any Holder to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the sole discretion of the Administrator.

 

(d)                                 No fractional Shares shall be issued and the Administrator shall determine, in its sole discretion, whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding down.

 

(e)                                  Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by any Applicable Law, the Company shall not deliver to any Holder certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).

 

12.5                        Forfeiture and Claw-Back Provisions.  Pursuant to its general authority to determine the terms and conditions applicable to Awards under the Plan, the Administrator

 

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shall have the right to provide, in an Award Agreement or otherwise, or to require a Holder to agree by separate written or electronic instrument, that:

 

(a)                                 (i) Any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of the Award, or upon the receipt or resale of any Shares underlying the Award, must be paid to the Company, and (ii) the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall be forfeited, if (x) a Termination of Service occurs prior to a specified date, or within a specified time period following receipt or exercise of the Award, or (y) the Holder at any time, or during a specified time period, engages in any activity in competition with the Company, or which is inimical, contrary or harmful to the interests of the Company, as further defined by the Administrator or (z) the Holder incurs a Termination of Service for “cause” (as such term is defined in the sole discretion of the Administrator, or as set forth in a written agreement relating to such Award between the Company and the Holder); and

 

(b)                                 All Awards (including any proceeds, gains or other economic benefit actually or constructively received by the Holder upon any receipt or exercise of any Award or upon the receipt or resale of any Shares underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, including, without limitation, any claw-back policy adopted to comply with the requirements of Applicable Law, including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy and/or in the applicable Award Agreement.

 

12.6                        Repricing.  Subject to Section 14.2 hereof, the Administrator shall, without the approval of the stockholders of the Company, have the authority to (i) amend any outstanding Option or Stock Appreciation Right to reduce its price per Share, or (ii) cancel any Option or Stock Appreciation Right in exchange for cash or another Award when the Option or Stock Appreciation Right price per Share exceeds the Fair Market Value of the underlying Shares, in its sole discretion.

 

12.7                        Leave of Absence.  Unless the Administrator provides otherwise, vesting of Awards granted hereunder shall be suspended during any unpaid leave of absence.  A Holder shall not cease to be considered an Employee, Non-Employee Director or Consultant, as applicable, in the case of any (a) leave of absence approved by the Company, (b) transfer between locations of the Company or between the Company and any of its Affiliates or any successor thereof, or (c) change in status (Employee to Director, Employee to Consultant, etc.), provided that such change does not affect the specific terms applying to the Holder’s Award.

 

ARTICLE 13.

 

ADMINISTRATION

 

13.1                        Administrator.  The Committee (or another committee or a subcommittee of the Board or the Compensation Committee of the Board assuming the functions of the Committee under the Plan) shall administer the Plan (except as otherwise permitted herein) and, unless otherwise determined by the Board, shall consist solely of two (2) or more Non-Employee

 

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Directors appointed by and holding office at the pleasure of the Board, each of whom is intended to qualify as both a “non-employee director” as defined by Rule 16b-3 of the Exchange Act or any successor rule, an “outside director” for purposes of Section 162(m) of the Code and an “independent director” under the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded; provided that any action taken by the Committee shall be valid and effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 13.1 or otherwise provided in any charter of the Committee.  Except as may otherwise be provided in any charter of the Committee, appointment of Committee members shall be effective upon acceptance of appointment.  Committee members may resign at any time by delivering written or electronic notice to the Board.  Vacancies in the Committee may only be filled by the Board.  Notwithstanding the foregoing, (a) the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to Awards granted to Non-Employee Directors and, with respect to such Awards, the terms “Administrator” and “Committee” as used in the Plan shall be deemed to refer to the Board and (b) the Board or Committee may delegate its authority hereunder to the extent permitted by Section 13.6 hereof.

 

13.2                        Duties and Powers of Administrator.  It shall be the duty of the Administrator to conduct the general administration of the Plan in accordance with its provisions.  The Administrator shall have the power to interpret the Plan, any Program and any Award Agreement, and to adopt such rules for the administration, interpretation and application of the Plan as are not inconsistent therewith, to interpret, amend or revoke any such rules and to amend any Program or Award Agreement; provided that the rights or obligations of the Holder of any Award that is the subject of any such Program or Award Agreement are not affected materially and adversely by such amendment, unless the consent of the Holder is obtained or such amendment is otherwise permitted under Section 14.10 hereof.  Any such grant or award under the Plan need not be administered or interpreted the same with respect to each Holder.  Any such interpretations and rules with respect to Incentive Stock Options shall be consistent with the provisions of Section 422 of the Code.  In its sole discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b-3 under the Exchange Act or any successor rule, or Section 162(m) of the Code, or any regulations or rules issued thereunder, or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded are required to be determined in the sole discretion of the Committee.

 

13.3                        Action by the Committee.  Unless otherwise established by the Board or in any charter of the Committee, a majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all members of the Committee in lieu of a meeting, shall be deemed the acts of the Committee.  Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Affiliate, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

 

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13.4                        Authority of Administrator.  Subject to the Company’s Bylaws, the Committee’s Charter and any specific designation in the Plan, the Administrator has the exclusive power, authority and sole discretion to:

 

(a)         Designate Eligible Individuals to receive Awards;

 

(b)         Determine the type or types of Awards to be granted to each Eligible Individual;

 

(c)          Determine the number of Awards to be granted and the number of Shares to which an Award will relate;

 

(d)         Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, purchase price, any performance criteria, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion determines;

 

(e)          Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards or other property, or an Award may be canceled, forfeited, or surrendered;

 

(f)           Prescribe the form of each Award Agreement, which need not be identical for each Holder;

 

(g)          Decide all other matters that must be determined in connection with an Award;

 

(h)         Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;

 

(i)             Interpret the terms of, and any matter arising pursuant to, the Plan, any Program or any Award Agreement;

 

(j)            Make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan; and

 

(k)         Accelerate wholly or partially the vesting or lapse of restrictions of any Award or portion thereof at any time after the grant of an Award, subject to whatever terms and conditions it selects and Sections 3.4 and 14.2(d) hereof.

 

13.5                        Decisions Binding.  The Administrator’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Program, any Award Agreement and all decisions and

 

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determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.

 

13.6                        Delegation of Authority.  To the extent permitted by Applicable Law, the Board or Committee may from time to time delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to grant or amend Awards or to take other administrative actions pursuant to Article 13; provided, however, that in no event shall an officer of the Company be delegated the authority to grant awards to, or amend awards held by, the following individuals:  (a) individuals who are subject to Section 16 of the Exchange Act, (b) Covered Employees, or (c) officers of the Company (or Directors) to whom authority to grant or amend Awards has been delegated hereunder; provided, further, that any delegation of administrative authority shall only be permitted to the extent it is permissible under Section 162(m) of the Code and Applicable Law.  Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation, and the Board may at any time rescind the authority so delegated or appoint a new delegatee.  At all times, the delegatee appointed under this Section 13.6 shall serve in such capacity at the pleasure of the Board and the Committee.

 

ARTICLE 14.

 

MISCELLANEOUS PROVISIONS

 

14.1                        Amendment, Suspension or Termination of the Plan.  Except as otherwise provided in this Section 14.1, the Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board or the Committee.  However, without approval of the Company’s stockholders given within twelve (12) months before or after the action by the Administrator, no action of the Administrator may, except as provided in Section 14.2 hereof, increase the limits imposed in Section 3.1 hereof on the maximum number of Shares which may be issued under the Plan or the individual Award limits specified in Section 3.3 hereof or take any action prohibited under Section 12.6 hereof.  Except as provided in Section 14.10 hereof, no amendment, suspension or termination of the Plan shall, without the consent of the Holder, materially and adversely affect any rights or obligations under any Award theretofore granted or awarded, unless the Award itself otherwise expressly so provides.  No Awards may be granted or awarded during any period of suspension or after termination of the Plan, and in no event may any Incentive Stock Option be granted under the Plan after the tenth (10th) anniversary of the Effective Date.

 

14.2                        Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Company and Other Corporate Events.

 

(a)                                 In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of the Company’s stock or the share price of the Company’s stock other than an Equity Restructuring, the Administrator may make equitable adjustments, if any, to reflect such change with respect to (i) the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Sections 3.1 and 3.3 hereof on the maximum number

 

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and kind of shares which may be issued under the Plan); (ii) the number and kind of Shares (or other securities or property) subject to outstanding Awards; (iii) the number and kind of Shares (or other securities or property) for which grants are subsequently to be made to new and continuing Non-Employee Directors pursuant to Section 4.6 hereof; (iv) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and (v) the grant or exercise price per share for any outstanding Awards under the Plan.  Any adjustment affecting an Award intended as Performance-Based Compensation shall be made consistent with the requirements of Section 162(m) of the Code.

 

(b)                                 In the event of any transaction or event described in Section 14.2(a) hereof or any unusual or nonrecurring transactions or events affecting the Company, any Affiliate of the Company, or the financial statements of the Company or any Affiliate, or of changes in Applicable Law, the Administrator, in its sole discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Holder’s request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:

 

(i)                                     To provide for either (A) termination of any such Award in exchange for an amount of cash and/or other property, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Holder’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 14.2 the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Holder’s rights, then such Award may be terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion having an aggregate value not exceeding the amount that could have been attained upon the exercise of such Award or realization of the Holder’s rights had such Award been currently exercisable or payable or fully vested;

 

(ii)                                  To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;

 

(iii)                               To make adjustments in the number and type of shares of the Company’s stock (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock or Deferred Stock and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding Awards and Awards which may be granted in the future;

 

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(iv)                              To provide that such Award shall be exercisable or payable or fully vested with respect to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable Program or Award Agreement; and

 

(v)                                 To provide that the Award cannot vest, be exercised or become payable after such event.

 

(c)                                  In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections 14.2(a) and 14.2(b) hereof:

 

(i)                                     The number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, shall be equitably adjusted; and/or

 

(ii)                                  The Administrator shall make such equitable adjustments, if any, as the Administrator in its discretion may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Sections 3.1 and 3.3 hereof on the maximum number and kind of shares which may be issued under the Plan).

 

The adjustments provided under this Section 14.2(c) shall be nondiscretionary and shall be final and binding on the affected Holder and the Company.

 

(d)                                 Change in Control.

 

(i)                                     Notwithstanding any other provision of the Plan, in the event of a Change in Control, each outstanding Award shall be assumed or an equivalent Award substituted by the successor corporation or a parent or subsidiary of the successor corporation, in each case, as determined by the Administrator.

 

(ii)                                  In the event that the successor corporation in a Change in Control and its parents and subsidiaries refuse to assume or substitute for any Award in accordance with Section 14.2(d)(i) hereof or it is otherwise determined that Awards shall not be so assumed or substituted, each such non-assumed/substituted Award, except for any Performance Awards, shall become fully vested and, as applicable, exercisable and shall be deemed exercised, immediately prior to the consummation of such transaction, and all forfeiture restrictions on any or all such Awards shall lapse at such time.  For the avoidance of doubt, the vesting of any Performance Awards not assumed in a Change in Control will not be automatically accelerated pursuant to this Section 14.2(d)(ii) and will instead vest pursuant to the terms and conditions of the applicable Award Agreement upon a Change in Control where the successor corporation and its parents and subsidiaries refuse to assume or substitute for any Award in accordance with Section 14.2(d)(i) hereof.  If an Award vests and, as applicable, is exercised in lieu of assumption or substitution in connection with a Change in Control, the Administrator shall notify the Holder of such vesting and any applicable exercise period, and the Award shall terminate upon the Change in Control.  For the avoidance of doubt, if the value of an Award that is terminated in connection with this Section 14.2(d)(ii) is zero or negative at the time of such Change in Control, such Award shall be terminated upon the Change in Control without payment of consideration therefor.

 

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(iii)                               Notwithstanding anything to the contrary, in the event that, within the twelve (12) month period immediately following a Change in Control, a Holder experiences a Termination of Service by the Company for other than Cause or by the Holder for Good Reason, then the vesting and, if applicable, exercisability of one hundred percent (100%) of the then-unvested Shares (or other securities or property) subject to the outstanding Awards held by such Holder shall accelerate upon the date of such Termination of Service.

 

(e)                                  The Administrator may, in its sole discretion, include such further provisions and limitations in any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan.

 

(f)                                   With respect to Awards which are granted to Covered Employees and are intended to qualify as Performance-Based Compensation, no adjustment or action described in this Section 14.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause such Award to fail to so qualify as Performance-Based Compensation, unless the Administrator determines that the Award should not so qualify.  No adjustment or action described in this Section 14.2 or in any other provision of the Plan shall be authorized to the extent that such adjustment or action would cause the Plan to violate Section 422(b)(1) of the Code.  Furthermore, no such adjustment or action shall be authorized to the extent such adjustment or action would result in short-swing profits liability under Section 16 of the Exchange Act or violate the exemptive conditions of Rule 16b-3 of the Exchange Act unless the Administrator determines that the Award is not to comply with such exemptive conditions.

 

(g)                                  No action shall be taken under this Section 14.2 which shall cause an Award to fail to be exempt from or comply with Section 409A of the Code or the Treasury Regulations thereunder.

 

(h)                                 The existence of the Plan, any Program, the Award Agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

 

(i)                                     In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the Shares or the share price of the Common Stock including any Equity Restructuring, for reasons of administrative convenience, the Company in its sole discretion may refuse to permit the exercise of any Award during a period of up to thirty (30) days prior to the consummation of any such transaction.

 

34

 

14.3                        Approval of Plan by Stockholders.  The Plan will be submitted for the approval of the Company’s stockholders within twelve (12) months after the date of the Board’s initial adoption of the Plan.  Awards may be granted or awarded prior to such stockholder approval; provided that such Awards shall not be exercisable, shall not vest and the restrictions thereon shall not lapse and no Shares shall be issued pursuant thereto prior to the time when the Plan is approved by the stockholders; and provided, further, that if such approval has not been obtained at the end of said twelve (12) month period, all Awards previously granted or awarded under the Plan shall thereupon be canceled and become null and void.

 

14.4                        No Stockholders Rights.  Except as otherwise provided herein, a Holder shall have none of the rights of a stockholder with respect to Shares covered by any Award until the Holder becomes the record owner of such Shares.

 

14.5                        Paperless Administration.  In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Holder may be permitted through the use of such an automated system.

 

14.6                        Effect of Plan upon Other Compensation Plans.  The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any Affiliate.  Nothing in the Plan shall be construed to limit the right of the Company or any Affiliate:  (a) to establish any other forms of incentives or compensation for Employees, Directors or Consultants of the Company or any Affiliate, or (b) to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate purpose including without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm or association.

 

14.7                        Compliance with Laws.  The Plan, the granting and vesting of Awards under the Plan and the issuance and delivery of Shares and the payment of money under the Plan or under Awards granted or awarded hereunder are subject to compliance with all Applicable Law, and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith.  Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all Applicable Law.  To the extent permitted by Applicable Law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such Applicable Law.

 

14.8                        Titles and Headings, References to Sections of the Code or Exchange Act.  The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include any amendment or successor thereto.

 

35

 

14.9                        Governing Law.  The Plan and any agreements hereunder shall be administered, interpreted and enforced under the internal laws of the State of Delaware without regard to conflicts of laws thereof or of any other jurisdiction.

 

14.10                 Section 409A.  To the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A of the Code, any Program pursuant to which such Award is granted and the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code.  To the extent applicable, the Plan, any Program and any Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date.  Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Administrator determines that any Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Administrator may adopt such amendments to the Plan and the applicable Program and Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section.

 

14.11                 No Rights to Awards.  No Eligible Individual or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Administrator is obligated to treat Eligible Individuals, Holders or any other persons uniformly.

 

14.12                 Unfunded Status of Awards.  The Plan is intended to be an “unfunded” plan for incentive compensation.  With respect to any payments not yet made to a Holder pursuant to an Award, nothing contained in the Plan or any Program or Award Agreement shall give the Holder any rights that are greater than those of a general creditor of the Company or any Affiliate.

 

14.13                 Indemnification.  To the extent allowable pursuant to Applicable Law, each member of the Committee or of the Board and any officer or other employee to whom authority to administer any component of the Plan is delegated shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s

 

36

 

Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

 

14.14                 Relationship to other Benefits.  No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Affiliate except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

 

14.15                 Expenses.  The expenses of administering the Plan shall be borne by the Company and its Affiliates.

 

*  *  *  *  *

 

I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of Corvus Pharmaceuticals, Inc. on December 31, 2015.

 

*  *  *  *  *

 

I hereby certify that the foregoing Plan was approved by the stockholders of Corvus Pharmaceuticals, Inc. on                            , 2016.

 

Executed on this          day of                             , 2016.

 

	
 
    	
 
    
	
 
    	
Leiv Lea
    
	
 
    	
Chief   Financial Officer
    

 

37Exhibit 10.13(a)

 

Execution Copy

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

LICENSE AGREEMENT

 

Dated

 

February 25, 2015

 

(1)  Vernalis (R&D) Limited

(2)  Corvus Pharmaceuticals, Inc.

 

 

CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1
    	
Definitions
    	
3
    
	
 
    	
 
    	
 
    
	
2
    	
License
    	
14
    
	
 
    	
 
    	
 
    
	
3
    	
Technology Transfer and   Assistance
    	
15
    
	
 
    	
 
    	
 
    
	
4
    	
Conduct of Development   and Commercialization
    	
16
    
	
 
    	
 
    	
 
    
	
5
    	
Diligence and Reporting
    	
17
    
	
 
    	
 
    	
 
    
	
6
    	
Milestone and Royalty   Payments
    	
19
    
	
 
    	
 
    	
 
    
	
7
    	
Intellectual Property —   Ownership
    	
26
    
	
 
    	
 
    	
 
    
	
8
    	
Intellectual Property -   Prosecution, Maintenance, Defence and Enforcement
    	
26
    
	
 
    	
 
    	
 
    
	
9
    	
Warranties and   Liability
    	
30
    
	
 
    	
 
    	
 
    
	
10
    	
Indemnification and   Liability
    	
33
    
	
 
    	
 
    	
 
    
	
11
    	
Confidentiality
    	
36
    
	
 
    	
 
    	
 
    
	
12
    	
Term and Termination
    	
38
    
	
 
    	
 
    	
 
    
	
13
    	
Consequences of   Termination
    	
39
    
	
 
    	
 
    	
 
    
	
14
    	
Assignment and Change   of Control
    	
40
    
	
 
    	
 
    	
 
    
	
15
    	
Force Majeure
    	
41
    
	
 
    	
 
    	
 
    
	
16
    	
Governing Law and   Jurisdiction
    	
41
    
	
 
    	
 
    	
 
    
	
17
    	
Waiver
    	
41
    
	
 
    	
 
    	
 
    
	
18
    	
Severance of Terms
    	
42
    
	
 
    	
 
    	
 
    
	
19
    	
Entire   Agreement/Variations
    	
42
    
	
 
    	
 
    	
 
    
	
20
    	
Notices
    	
42
    
	
 
    	
 
    	
 
    
	
21
    	
Counterparts
    	
43
    
	
 
    	
 
    	
 
    
	
22
    	
This Agreement not to   Constitute a Partnership
    	
43
    
	
 
    	
 
    	
 
    
	
23
    	
Costs
    	
43
    
	
 
    	
 
    	
 
    
	
24
    	
Announcements
    	
43
    
	
 
    	
 
    	
 
    
	
25
    	
Anti-Bribery and   Anti-Corruption
    	
43
    
	
 
    	
 
    	
 
    
	
Schedule 1
    	
Vernalis Patent Rights
    	
46
    
				

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

1

 

	
Schedule 2
    	
In-process and   completed V81444 GMP and non GMP material, Vernalis Licensed Compounds and   intermediates
    	
48
    
	
 
    	
 
    	
 
    
	
Schedule 3
    	
Vernalis Bank Details
    	
49
    
	
 
    	
 
    	
 
    
	
Schedule 4
    	
Agreed Press Release
    	
50
    
	
 
    	
 
    	
 
    
	
Schedule 5
    	
[***]
    	
52
    
	
 
    	
 
    	
 
    
	
Schedule 6
    	
V81444
    	
53
    
	
 
    	
 
    	
 
    
	
Schedule 7
    	
Corvus Pre-Clinical   Research Plan
    	
54
    
	
 
    	
 
    	
 
    
	
Schedule 8
    	
Corvus Clinical Plan
    	
55
    

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

2

 

This License Agreement is made the 25th day of February, 2015

 

Between:

 

(1)                                          Vernalis (R&D) Limited whose principal place of business is 100 Berkshire Place, Wharfedale Road, Winnersh, Berkshire, RG41 5RD, UK (“Vernalis”); and

 

(2)                                          Corvus Pharmaceuticals, Inc. whose principal place of business is at 863 Mitten Road, Suite 102, Burlingame, CA. 94010 USA (“Corvus”).

 

Whereas:

 

(A)                                        Vernalis is a publicly listed, UK-headquartered biopharmaceutical company and Corvus is a private, venture capital backed biotechnology company located in California, US.

 

(B)                                        Vernalis has exclusive, sub-licensable rights in the Adenosine Receptor Antagonists ([***]) (both as defined below) and related intellectual property rights, which have been discovered and developed by Vernalis and its previous collaborator, [***]. In particular, Vernalis has developed an Adenosine Receptor Antagonist known as V81444 which entered a Phase Ib/II proof of concept study in July 2013.

 

(C)                                        Corvus now wishes to Develop and Commercialize (both as defined below) the Adenosine Receptor Antagonists ([***]) as a means of diagnosing, preventing or treating human diseases or conditions, such as but not limited to tumors, cancers and associated conditions and inflammation, and Vernalis wishes to grant Corvus an exclusive license under its intellectual property rights covering the Adenosine Receptor Antagonists ([***]) to do the same.

 

It is now agreed as follows:

 

1                                                  Definitions

 

1.1                                        In this Agreement the following definitions shall apply unless the context requires otherwise:

 

“Adeno VII Patent Rights” means the Patent Rights listed at Part A of Schedule 1, [***] (including its use, formulation and synthesis/manufacture), or any Patent Right deriving priority from such Patent Rights. For the avoidance of doubt, it is acknowledged that a claim of any such Patent Rights may cover [***].  For any such claim, [***], and the remainder of such claim falls within the definition of Adeno VII Patent Rights.

 

“Adenosine Receptor Antagonist” means a small molecule that binds selectively to an adenosine receptor, as measured in vitro or in vivo in any species.  For clarity, V81444 is an Adenosine Receptor Antagonist.

 

“Affiliate” means any company, partnership or other business entity that Controls, is Controlled by or is under common Control with either Party from time to time.

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

3

 

“Agreement” means this document and any and all schedules, appendices and other addenda to it as may be varied from time to time in accordance with the provisions of this agreement.

 

“ANDA Act” has the meaning attributed to it in Clause 8.4.

 

“Annual” means per calendar year.

 

“Applicable Law” means any present or future law, regulation, directive, instruction, direction or rule of any Government Authority or Regulatory Authority including any amendment, extension or replacement thereof which is from time to time in force.

 

[***] has the meaning attributed to it in Clause 9.2.7.

 

“Business Day” means 9.00 am to 5.00 pm local time on a day other than a Saturday, Sunday, bank or other public holiday in England and Wales or the State of California.

 

“Clinical Trial” means any Phase I Clinical Trial, Phase II Clinical Trial, Phase III Clinical Trial, Pivotal Clinical Trial, or any other clinical trial or study in human subjects or patients.

 

“Combination Product” means a Licensed Product which also [***].

 

“Commencement Date” means the date stated at the start of this Agreement.

 

“Commercialization” means all activities relating to the commercial Exploitation of the Licensed Products, including without limitation the export, import, promotion, marketing (including pre-launch, post-launch marketing and marketing research), conducting post approval clinical trials, detailing, distribution, pricing and reimbursement, storage, handling, preparation for sale, offering for sale and selling, customer service and support, adverse events reporting and interacting and communicating with Regulatory Authorities in relation to a Licensed Product.  When used as a verb, “to Commercialize” and “Commercializing” means to engage in Commercialization, and “Commercialized” has a corresponding meaning.

 

“Commercially Reasonable Efforts” means, with respect to the performance of Development or Commercialization activities with respect to Vernalis Licensed Compound or Licensed Product by Corvus, directly or through its Affiliates or Sublicensees, the carrying out of such activities in a sustained and diligent manner, using efforts and resources comparable to the efforts and resources commonly used by companies with similar financial resources and expertise in the pharmaceutical industry for compounds or products of similar market potential at a similar stage in development or product life.  “Commercially Reasonable Efforts”

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

4

 

shall be [***], including any [***], and without regard to [***].

 

“Confidential Disclosure Agreement” means the confidential disclosure agreement between Vernalis and Corvus dated 22 October 2014.

 

“Confidential Information” means (a) information disclosed by either Party to the other Party prior to the Commencement Date pursuant to the Confidential Disclosure Agreement, which will be the Confidential Information of the disclosing Party, (b) the terms of this Agreement, which will be the Confidential Information of both Parties (and each Party shall be treated as both a disclosing Party and receiving Party with respect thereto), (c) Vernalis Know How, which shall be the Confidential Information of Vernalis, (d) Corvus Arising Know How and Corvus Background Know How, which shall be the Confidential Information of Corvus, and (e) any technical, business, or other information, including (i) information relating to the scientific, regulatory or business affairs or other activities of a Party, and (ii) information relating to Vernalis Licensed Compound or Licensed Product, and any Exploitation of Vernalis Licensed Compound or Licensed Product, and any Know How with respect thereto, in each of (i) and (ii) that is disclosed by or on behalf of one Party or its Affiliates to the other Party in connection with this Agreement, whether prior to, on, or after the Commencement Date, which shall be the Confidential Information of the disclosing Party.  

 

“Control” means the ownership either directly or indirectly of 50% or more of the issued share capital or any comparable equity or ownership interest with respect to a business entity or the legal power to direct or cause the direction of the general management and policies of the party in question.

 

“Corvus Arising IP” means Corvus Arising Know How and Corvus Arising Patent Rights.

 

“Corvus Arising Know How” means all Know How owned by or licensed to Corvus after the Commencement Date at any time during the Term that is necessary or useful to Exploit Vernalis Licensed Compound or Licensed Product (but excluding Vernalis Know How).

 

“Corvus Arising Patent Rights” means Patent Rights owned by or licensed to Corvus after the Commencement Date at any time during the Term which cover a Vernalis Licensed Compound or a Licensed Product or claim the Corvus Know How, but excluding always Vernalis Patent Rights.

 

“Corvus Background IP” means Corvus Background Know How and Corvus Background Patent Rights. 

 

“Corvus Background Know How” means all Know How owned by or licensed to Corvus as at the Commencement Date that is necessary or useful to Exploit

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

5

 

Vernalis Licensed Compound or Licensed Product (but excluding Vernalis Know How).

 

“Corvus Background Patent Rights” means Patent Rights owned by or licensed to Corvus as at the Commencement Date which cover a Vernalis Licensed Compound or a Licensed Product or claim the Corvus Background Know How, but excluding always Vernalis Patent Rights.

 

“Corvus IP” means Corvus Background IP and Corvus Arising IP.

 

“Corvus Know How” means all Corvus Background Know How and Corvus Arising Know How.

 

“Corvus Patent Rights” means all Corvus Background Patent Rights and Corvus Arising Patent Rights. 

 

“Development” means all activities conducted in connection with obtaining Marketing Authorizations for Licensed Products, including without limitation research, pre-clinical and other non-clinical testing, test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, qualification and validation, quality assurance, quality control, clinical studies, including manufacturing in support thereof, statistical analysis and report writing, the preparation and submission of applications for Marketing Authorizations, the regulatory affairs with respect to the foregoing and all other activities necessary or reasonably useful or otherwise requested or required by a Regulatory Authority as a condition or in support of obtaining or maintaining a Marketing Authorization.  When used as a verb, “Develop” means to engage in Development.

 

“Documents” means reports, research notes, charts, graphs, comments, computations, analyses, recordings, photographs, paper, notebooks, books, files, ledgers, records, tapes, discs, diskettes, CD-ROM, computer programs and documents thereof, computer information storage means, samples of material, other graphic or written data and any other media on which Know How can be permanently stored.

 

“EMA” means the European Medicines Agency or any successor agency thereto.

 

“Europe” means all the countries for which the EMA is responsible for the protection and promotion of public health through the evaluation and supervision of medicines for human use, as may be amended from time to time.

 

“Field” means all fields of use.

 

“Exploit” means to make, have made, use, have used, Develop, Commercialize,  Manufacture, have Manufactured, hold, or keep (whether for disposal or otherwise), transport, distribute or otherwise dispose of any Vernalis Licensed Compound or Licensed Product.

 

“First Commercial Sale” means, with respect to a Licensed Product and a country, the first sale for monetary value for use or consumption by any Third 

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

6

 

Party after a Marketing Authorization is granted for such Licensed Product in such country.  A sale of Licensed Product which is being tested or investigated for an indication not covered by a Marketing Authorization for use in a clinical trial shall not constitute a commercial sale for the purposes of this definition.  

 

“Force Majeure Event” has the meaning attributed to it in Clause 15.

 

“Generic Competition” has the meaning attributed to it in Clause 8.4.

 

“Good Manufacturing Practice” or “GMP” means manufacture in accordance with:

 

(a)                                          Directive 91/412/EEC and Directive 2003/94/EC or any other applicable European Community legislation or regulation as amended and applicable from time to time;

 

(b)                                          the current principles and guidelines of good manufacturing practice for medicinal products for human use and “substantial conformity with good manufacturing requirements” (as such phrase is used in Section 802(f)(1) of the Federal Food, Drug and Cosmetic Act, such Act may be amended from time to time);

 

(c)                                           US Code of Federal Regulations, Title 21, Part 210 (Current Good Manufacturing Practice in Manufacturing, Processing, Packaging or Holding of Drugs), Part 211 (Current Good Manufacturing Practice for Finished Pharmaceuticals); and

 

(d)                                          the equivalent law or regulation in any Major Market.

 

“Government Authority” means any national or supranational agency, authority, department of any government of any country having jurisdiction over any of the activities contemplated by this Agreement or over the Parties, including the European Commission.

 

“IND” means an investigational new drug application filed with the United States Food and Drug Administration (or any successor agency thereto) prior to beginning clinical trials in humans, or any comparable application filed with the Regulatory Authority of a country other than the United States prior to beginning trials in humans in that country. 

 

“Indemnification Claim Notice” has the meaning attributed to it in Clause 10.3.

 

“Indemnified Party” has the meaning attributed to it in Clause 10.3.

 

“Know How” means technical and other information which is not in the public domain, including information comprising or relating to concepts, discoveries, data, designs, formulae, ideas, inventions, methods, models, assays, research plans, procedures, designs for experiments and tests and results of experimentation and testing (including results of research or development), processes (including Manufacturing processes, specifications and techniques), laboratory records, chemical, pharmacological, toxicological, clinical, analytical and quality control data, trial data, case report forms, data analyses, reports, 

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

7

 

Manufacturing data or summaries and information contained in submissions to and information from ethical committees and Regulatory Authorities.  Know How includes Documents containing Know How, including but not limited to any rights including trade secrets, copyright, database or design rights protecting such Know How.  The fact that an item is known to the public shall not be taken to preclude the possibility that a compilation including the item, or a development relating to the item, is not known to the public.

 

“Licensed Product” means any pharmaceutical product containing a Vernalis Licensed Compound or an Adenosine Receptor Antagonist compound that has been developed using Vernalis Licensed IP, each in any and all forms, presentations, delivery systems, dosages, and formulations.

 

“Licensed Product Infringement” has the meaning attributed to it in Clause 8.3.

 

“Losses” has the meaning attributed to it in Clause 10.1.

 

“Major [***] Markets” means [***].

 

“Major [***] Markets” means the [***].

 

“Major Markets” means the [***].

 

“Manufacture” and “Manufacturing” means all activities related to the production, manufacture, processing, filling, finishing, packaging, labelling, shipping, and storage of any Vernalis Licensed Compound, any Licensed Product, or any intermediate thereof, including process development, process qualification and validation, scale-up, pre-clinical, clinical and commercial manufacture and analytic development, product characterization, stability testing, quality assurance, and quality control.

 

“Marketing Authorization” means the approval of an NDA or sNDA submitted to the Food and Drug Administration for the marketing of a Licensed Product in the United States, or with respect to any other country in the Territory, any and all approvals required from any Regulatory Authority to market a Licensed Product in that country. 

 

“Milestones” has the meaning attributed to it in Clause 6.2.1.

 

“NDA” means a new drug application filed with the Food and Drug Administration for a Licensed Product in the USA, or any comparable application filed with the Regulatory Authorities of any other country in the Territory (or any Regulatory Authority covering that country in the case of a supranational Regulatory Authority) to obtain all approvals necessary to market a Licensed Product in that country.

 

“Net Sales” means the gross amounts invoiced by Corvus, its Sublicensees or its or their Affiliates, for all sales of Licensed Product less the following items to the

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

8

 

extent that they are paid or actually allowed and are shown on the relevant invoice:

 

(a)                                          quantity, trade or cash discounts actually granted for such Licensed Product;

 

(b)                                          amounts repaid or credited and allowances including cash, credit or free goods allowances, given by reason of chargebacks, retroactive price reductions or billing errors and rebates (including government-mandated rebates) for such Licensed Product;

 

(c)                                           amounts refunded or credited for Licensed Product which was rejected, spoiled, damaged, outdated or returned;

 

(d)                                          freight, shipment and insurance costs incurred transporting Licensed Product to a Third Party purchaser; and

 

(e)                                           taxes, tariffs, customs duties and surcharges and other governmental charges incurred in connection with the sale, exportation or importation of Licensed Product;

 

provided always that sums under (a) to (e) shall be calculated in accordance with generally accepted accounting principles, or international financial reporting standards, consistently applied.

 

The transfer of Licensed Product by (i) Corvus or a Sublicensee or one of its or their Affiliates to an Affiliate of such party, (ii) Corvus or an Affiliate to a Sublicensee or (iii) a Sublicensee to a further tier Sublicensee shall not be considered a sale. In such cases Net Sales shall be determined based on the invoiced sale price by the Affiliate (in the case of (i)), the Sublicensee (in the case of (ii)) or the further tier Sublicensee (in the case of (iii)) to the first third party arm’s-length trade purchaser, less the deductions allowed under this definition.

 

Subject to the following paragraph, upon any sale or other disposal of Licensed Product by or on behalf of Corvus, Sublicensees or its or their Affiliates other than a bona fide arm’s length transaction exclusively for money, such sale or other disposal shall [***].  Transfers or dispositions of Licensed Product by Corvus or Sublicensees or their Affiliates as free promotional or advertising samples or charitable donations, or under its or their patient assistance programs, in each case to the extent provided for no monetary or other consideration, shall not be considered in determining Net Sales under this definition provided that in each case, such transfers or dispositions are in quantities common in the industry for the type of product.  Notwithstanding the foregoing, the transfer for free or at cost (of goods and commercially reasonable overheads) of Licensed Products for use in clinical trials, or provided on a named patient or compassionate use basis for an indication(s) not covered by a Marketing Authorization(s), shall not be included in Net Sales.

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

9

 

In the event the Licensed Product is sold in a Combination Product, the Net Sales shall be determined as follows: 

 

[***]

 

provided that if, in a specific country: (a) A is known but the other therapeutically active ingredient(s) in such Combination Product are not sold separately in that country in products with the same quantity of active ingredient, Net Sales shall be adjusted by multiplying actual Net Sales of such Combination Product by the fraction A/C, where C is the invoice price in that country of that Combination Product; or (b) B is known but a Licensed Product containing the same amount of such Vernalis Licensed Compound is not sold separately in that country, Net Sales shall be calculated by multiplying actual Net Sales of such Combination Product by the fraction (C-B)/C.  If, in a specific country, A and B are not known, the allocation of Net Sales for such Combination Product shall be negotiated by the Parties in good faith.

 

[***].

 

“Non-Adeno VII Patent Rights” means the Patent Rights listed at Part B of Schedule 1 or any Patent Right deriving priority from such Patent Rights.

 

“Non-Oncology Indication” means a clinical indication (or potential indication) other than an Oncology Indication.  A Non-Oncology Indication will be determined to be different from another such indication if [***].

 

“Oncology Indication” means a clinical indication (or potential indication) for the prevention, diagnosis or treatment of a cancerous condition.  One Oncology Indication will be different from another such indication if a [***]. 

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

10

 

“Party” means Corvus and Vernalis and “Parties” shall be construed accordingly.

 

“Patent Rights” means patent applications and patents, and all foreign counterparts thereof in all countries, including any renewals, re-examinations, continuations, continuations-in-part, divisionals, patents of addition, extensions, (including patent term extensions,) reissues, substitutions, confirmations, and any equivalents of the foregoing in any and all countries of or to any of them, as well as any supplementary protection certificates, and equivalent protection rights in respect of any of them. 

 

“Phase I Clinical Trial” means a human clinical trial normally conducted in healthy volunteers or diseased patients with the aim of determining the pharmacokinetics, pharmacodynamics, early safety profile and some preliminary evidence of efficacy if conducted in patients.  Phase I Clinical Trials in Oncology Indications [***].  For the avoidance of doubt, a Phase I Clinical Trial does not include studies where the [***].  Any trial with [***].

 

“Phase II Clinical Trial” means a human clinical trial where a product is tested in a limited number of diseased patients and possibly also healthy subjects for the purpose of determining an initial indication of efficacy of a product for a therapeutic or prophylactic use, an indication, or to perform dose ranging, additional pharmacokinetics and pharmacodynamics or obtain expanded evidence of safety.

 

“Phase III Clinical Trial” means a controlled, multicentre, human clinical trial conducted in a sufficient number of patients to establish safety or statistically significant efficacy in the particular indication tested.

 

“Pivotal Clinical Trial” means a pivotal human clinical trial conducted in a sufficient number of patients to establish safety or efficacy in the particular indication tested, the data and results of which are intended to be used as part of a basis for seeking Marketing Authorization in any country.

 

“Quarter” means each period of three months ending on 31 March, 30 June, 30 September or 31 December and “Quarterly” shall be construed accordingly.

 

“[***] Sub-License” means the [***] specific sub-license of the Adeno VII Patent Rights between Vernalis and [***].

 

“Regulatory Authority” means any national, supranational (including the European Commission, the Council of the European Union, and the EMA), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity including the United States Food and Drug Administration, in

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

11

 

each country involved in the granting of Marketing Authorizations or pricing approvals for Licensed Product.

 

“Royalty Term” has the meaning attributed to it in Clause 6.4.2.

 

“Royalties” has the meaning attributed to it in Clause 6.4.1.

 

“Sales Milestones” has the meaning attributed to it in Clause 6.3.1.

 

“Sales Milestone Table” has the meaning attributed to it in Clause 6.3.1.

 

“sNDA” means a supplemental new drug application filed with the Food and Drug Administration to obtain a supplemental Marketing Authorisation for a Licensed Product in the USA, or any comparable application filed with the Regulatory Authorities of any other Major Market (or any Regulatory Authority covering that Major Market in the case of a supranational Regulatory Authority) to obtain a supplemental Marketing Authorisation for a Licensed Product in or covering that Major Market.

 

“Sublicensee” has the meaning attributed to it in Clause 2.2.1.

 

“Territory” means the world. 

 

“Term” has the meaning attributed to it in Clause 12.1.

 

“Third Party” means a person or entity other than (a) Corvus or (b) Vernalis or an Affiliate of either of them.

 

“Third Party Claims” has the meaning attributed to it in Clause 10.1.

 

“United States GAAP” means the generally accepted accounting principles in the United States as developed and maintained by the Financial Accounting Standards Board or any successor body thereto.

 

“USD” means United States Dollars.

 

“Valid Claim” means (a) a claim of any issued and unexpired Patent Rights (but excluding patent applications) whose validity, enforceability, or patentability has not been affected by any of the following: (i) irretrievable lapse, abandonment, revocation, dedication to the public, or disclaimer; or (ii) a holding, finding, or decision of invalidity, unenforceability, or non-patentability by a court, Government Authority, national or regional patent office, or other appropriate body that has competent jurisdiction, such holding, finding, or decision being final and unappealable or unappealed within the time allowed for appeal; or (b) a claim of a pending application included within Patent Rights that was filed and is being prosecuted in good faith and has not been abandoned or finally disallowed without the possibility of appeal or re-filing of the application; provided that such pending application has not been pending for more than [***] after the priority date for such application.

 

“VAT” means United Kingdom value added tax in accordance with the United 

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

12

 

Kingdom Value Added Tax Act 1994.

 

“Vernalis Know How” means all Know How owned by or licensed to Vernalis at the Commencement Date that is necessary to Exploit any Vernalis Licensed Compound or Licensed Product.

 

“Vernalis Licensed Compound” means any compound claimed in the Vernalis Patents ([***]), the manufacture, use or sale of which would, absent this Agreement, infringe any Valid Claim of the Vernalis Patent Rights including, for the avoidance of doubt, V81444, and any metabolite, salt, ester, hydrate, solvate, isomer, enantiomer, free acid form, free base form, crystalline form, co-crystalline form, amorphous form, pro-drug (including ester pro-drug) form, racemate, polymorph, chelate, stereoisomer, tautomer, resonate or optically active form thereof.

 

“Vernalis Licensed IP” means any and all Vernalis Know How and Vernalis Patent Rights.

 

“Vernalis Patent Rights” means the Adeno VII Patent Rights and the Non-Adeno VII Patent Rights. 

 

“Vernalis Patent Rights Challenge” has the meaning attributed to it in Clause 8.3.

 

[***].

 

“V81444” means the molecule and structure further described at Schedule 6, also known as BIIB034 and any [***]. 

 

1.2                                        Interpretation

 

Unless the context otherwise requires, the following rules of interpretation shall apply to this Agreement:

 

1.2.1                              The headings in this Agreement are inserted for convenience only and shall not affect its construction.

 

1.2.2                              Any and all Schedules, annexes and exhibits to this Agreement form part of (and are incorporated into) this Agreement.

 

1.2.3                              Any words following the terms “including”, “include” or any similar expression shall be construed as illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms.

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

13

 

1.2.4                              The word “or” has the inclusive meaning represented by the phrase “and/or”.

 

1.2.5                              Words in the singular include the plural and in the plural include the singular.

 

1.2.6                              Use of any gender includes the other genders and neuter.

 

1.2.7                              references to “Clauses” and “Schedules” are to clauses of, and schedules to, this Agreement.

 

1.2.8                              references to a “person” shall be construed so as to include:

 

(a)                                          any individual, firm, body corporate, authority, joint venture, association, undertaking, partnership or limited partnership (whether or not having separate legal personality); and

 

(b)                                          a reference to the successors, permitted transferees and permitted assignees of any of the persons referred to in Clause 1.2.8 (a).

 

1.2.9                              references to “written” or “writing” shall include all data in written form whether represented in hand-writing, facsimile, printed.

 

1.2.10                       any express obligation or liability of a Party to ensure or procure the performance of any obligation by any other person shall not be reduced or discharged by any act or omission of any other person.

 

2                                                  License

 

2.1                                        License Grant

 

Subject to the terms of this Agreement, Vernalis hereby grants to Corvus a worldwide, exclusive, royalty-bearing license under the Vernalis Licensed IP to Exploit the Vernalis Licensed Compounds and the Licensed Products in the Field in the Territory.

 

2.2                                        Sublicensing

 

2.2.1                              Corvus shall be entitled to sublicense (including through multiple tiers) the rights granted to it under Clause 2.1 above to any person with similar or greater financial resources and expertise as Corvus, provided such person is [***].  If Corvus or a Sublicensee wishes to grant a sublicense to any person which does not meet the above criteria then it shall not do so without Vernalis’s prior written consent (such consent not to be unreasonably withheld or delayed).  Any person to which Corvus grants a sublicense and to which any further tiers of sublicense are granted, each pursuant to this Clause 2.2.1, shall be a “Sublicensee”.  In the event that Corvus grants one or more sublicenses pursuant to Clause 2.2.1, Corvus shall remain responsible for all of its obligations under this Agreement and shall cause each Sublicensee to comply with the applicable

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

14

 

terms and conditions of this Agreement.  If the acts or omissions of any Sublicensee cause Corvus to be in breach of this Agreement, Corvus shall be responsible for such breach regardless of any remedy which either (a) Vernalis may have against the Sublicensee or (b) Corvus may have against the Sublicensee for breach of the sublicense.  Any such permitted sublicenses shall be consistent with and expressly made subject to the terms and conditions of this Agreement.  Corvus shall provide a copy of any sublicense agreement executed by Corvus or any Sublicensee to Vernalis within [***] of its execution.

 

2.2.2                              In the event of termination of this Agreement:

 

(a)                                          by Corvus pursuant to Clause 12.2.1 (material breach) or Clause 12.3 (termination at will) , with respect to any Vernalis Licensed Compound or Licensed Product, any sublicense granted by Corvus pursuant to Clause 2.2.1 shall automatically terminate; or

 

(b)                                          by Vernalis pursuant to Clause 12.2.1 (material breach), Clause 12.2.2 (challenge to IP) or Clause 12.2.3 (insolvency), Vernalis shall [***].  Any such [***].

 

2.3                                        No Other Rights Granted by Vernalis

 

Except as expressly provided in this Clause 2, Vernalis grants no other right or license, including any rights or licenses to the Vernalis Licensed IP or any other Patent Rights, Know How or intellectual property rights not otherwise expressly granted in this Clause 2.

 

3                                                  Technology Transfer and Assistance

 

3.1                                        Technology Transfer

 

As soon as practicably possible following the Commencement Date, and no later than three (3) months after the Commencement Date, Vernalis shall transfer to Corvus:

 

(a)                                          all relevant regulatory, CMC, preclinical and clinical documents and reports relating to any and all Vernalis Licensed Compounds (in written, electronic or other form then-existing);

 

(b)                                          purchased in-process and completed V81444 GMP and non GMP material, and available samples of any backup Vernalis Licensed Compounds and intermediates, each as set out in Schedule 2 and

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

15

 

as selected by Corvus; provided that Corvus shall be entitled to arrange for testing of any such materials, Vernalis Licensed Compounds and intermediates to ensure that they meet its requirements, in which case Corvus shall then notify Vernalis promptly of those materials which it wishes to purchase, and shall then within thirty (30) days after sending such notice to Vernalis pay to Vernalis the relevant sums set out in Schedule 2;  and

 

(c)                                           all relevant filings made to Regulatory Authorities (including, for example, INDs) by Vernalis or its Affiliates or Sublicensees for Vernalis Licensed Compounds prior to the Commencement Date.

 

In addition, Vernalis shall and hereby does grant to Corvus a right of reference and access to all regulatory filings referred to in (c) above and shall transfer sponsorship and ownership of the INDs in (c) above to Corvus within thirty (30) days after the Commencement Date.

 

4                                                  Conduct of Development and Commercialization

 

4.1                                        Decision Making and Costs

 

As between the Parties, all decisions relating to the Exploitation of any Vernalis Licensed Compounds and Licensed Product shall be in the sole discretion of Corvus and shall be carried out by Corvus or its Sublicensees and they shall be responsible for all costs and expenses in connection with the Exploitation of Vernalis Licensed Compound and Licensed Product.

 

4.2                                        Compliance with Applicable Law

 

Corvus shall, and shall cause its Sublicensees to, comply with all Applicable Law with respect to the Exploitation of Vernalis Licensed Compounds and Licensed Products.

 

4.3                                        Marketing Authorizations

 

4.3.1                              Corvus shall have the right and responsibility for conducting communications with Regulatory Authorities with respect to Licensed Product in the Territory, and for preparing, submitting, prosecuting and maintaining all filings and applications required to be made to any Regulatory Authority to obtain any necessary or commercially desirable Marketing Authorizations and other approvals, consents or licenses to Exploit Licensed Products, including any filings and applications to any Regulatory Authority for any pricing or reimbursement approval required or commercially desirable, and for avoidance of doubt, Corvus or its Sublicensees shall, respectively, own all right, title and interest in all the filings and applications made to, and all the approvals, consents or licenses issued by, any Regulatory Authority and they shall be responsible for all costs and expenses in connection with clinical trials and securing regulatory approvals.

 

4.3.2                              To the extent that Corvus requires regulatory support from Vernalis to obtain or maintain any approvals, consents or licenses referred to in Clause 4.3.1 due to the Regulatory Authority requiring knowledge of work

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

16

 

conducted by Vernalis prior to the date of this Agreement, Vernalis shall provide commercially reasonable assistance provided it is given reasonable notice by Corvus.  [***].

 

4.4                                        Recalls

 

Corvus shall notify Vernalis promptly ([***]) following its determination that any event, incident, or circumstance has occurred that may result in the need for a recall, market suspension, or market withdrawal of a Licensed Product in the Territory, and shall include in such notice the reasoning behind such determination, and any supporting facts.  Corvus (or its Sublicensees, as applicable) shall have the right to make the final determination whether to voluntarily implement any such recall, market suspension, or market withdrawal in the Territory.  If a recall, market suspension, or market withdrawal is mandated by a Regulatory Authority in the Territory, Corvus (or its Sublicensees, as applicable) shall initiate such a recall, market suspension, or market withdrawal in compliance with Applicable Law.  For all recalls, market suspensions, or market withdrawals undertaken pursuant to this Clause 4.4, [***].

 

5                                                  Diligence and Reporting

 

5.1                                        Diligence

 

5.1.1                              The Parties acknowledge and agree that additional Development will be required to obtain Marketing Authorizations for Licensed Product in the Field in the Territory.

 

5.1.2                              Corvus shall use Commercially Reasonable Efforts to Develop and obtain and maintain Marketing Authorizations for one or more Licensed Products in the Field in each of the Major Markets, and to Commercialize one or more Licensed Products in the Field in each of the Major Markets.  In particular, prior to the First Commercial Sale, Corvus shall actively invest in and use Commercially Reasonable Efforts to progress at least one Oncology or Non-Oncology Indication in the Field in at least one Major Market.  The Parties acknowledge that what constitutes Commercially Reasonable Efforts may vary between Major Markets.

 

5.1.3                              Corvus shall use Commercially Reasonable Efforts to conduct initial pre-clinical and clinical studies, as set out in Schedule 7 and Schedule 8 respectively, to support the use of V81444 as an immunotherapeutic agent for cancer studies.

 

5.1.4                              Without limitation to the foregoing, Corvus shall use Commercially Reasonable Efforts (and shall keep Vernalis fully informed of such efforts) to, in each case, within the time period set forth below with respect to each obligation:

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

17

 

(a)                                          [***];

 

(b)                                          [***]; and

 

(c)                                           [***].

 

The Parties acknowledge that from time to time, the requirements [***] may change, and that other legal, market and other factors may arise that are not within Corvus’s control that could impact the timelines [***].  Accordingly the timing set out in Clause 5.1.4(a) is based on the Parties’ current expectations of the conditions that will exist during the time period [***].  Any changes impacting the bases for such expectations could extend the time period before which [***] using Commercially Reasonable Efforts.

 

5.2                                        Records

 

Corvus shall maintain records in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, and in compliance with Applicable Law, which shall be materially complete and accurate and shall properly reflect all work done and results achieved in the performance of its Development and Commercialization activities.  Such records shall be retained by Corvus for at least [***], or for such longer period as may be required by Applicable Law.

 

5.3                                        Reports and requests for additional information.

 

5.3.1                              Upon [***] of the Commencement Date and thereafter at least once every [***] with respect to each Licensed Product and Vernalis Licensed Compound, Corvus shall provide Vernalis with a report describing the extent of Development and, as applicable, Commercialization activities that it, and each Affiliate and Sublicensee has performed, or caused to be performed, since the preceding report and the results or implications of such activities, its and their Development and Commercialization activities in process, and the future activities it expects it and them to initiate during the ensuing [***] period.

 

5.3.2                              Upon Vernalis’ request, no more than once [***], and thereafter

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

18

 

no more than once [***], the Parties shall meet by means of a teleconference (or such other means as the Parties may agree from time to time) to discuss the Development and, as applicable, Commercialization activities that Corvus and each Affiliate and Sublicensee has performed, or caused to be performed, and the results obtained, since the last such meeting, and Corvus’ and each Affiliate’s and each Sublicensee’s Development and Commercialization activities in process, and the future activities Corvus expects it and them to initiate prior to the next such meeting.

 

5.3.3                              In addition to Clause 8.6, Corvus shall notify Vernalis within thirty (30) days after the grant of a Marketing Authorization.

 

5.3.4                              If at any time Vernalis has a reasonable basis to believe that Corvus is in breach of its obligations under Clause 5.1.2, 5.1.3 or 5.1.4, then Vernalis shall so notify Corvus, specifying the basis for its belief, and, without limitation to any other right or remedy available to Vernalis hereunder, at Vernalis’ request, the Parties shall meet within [***] after such notice to discuss in good faith Vernalis’ concerns and Corvus’ Development and Commercialization plans with respect to each Licensed Product and Vernalis Licensed Compound.

 

6                                                  Milestone and Royalty Payments

 

6.1                                        Signature Fee

 

Within [***] of the execution of this Agreement, Corvus shall pay to Vernalis a [***] signature fee of one million USD ($1,000,000).

 

6.2                                        Milestone Payments

 

6.2.1                              The table below (the “Milestone Table”) sets out various milestones (“Milestones”) that can be achieved for Oncology Indications and Non-Oncology Indications by Corvus, either by itself or through an Affiliate or Sublicensee.  The amounts payable with respect to each Milestone will not vary, depending on whether the particular Milestone is achieved by Corvus itself, or an Affiliate or Sublicensee.

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

19

 

	
 
    	
 
    	
Payment Obligation Upon Achievement of a
   Milestone (USD($))
    
	
Milestone
    	
 
    	
Oncology Indication
    	
 
    	
Non-Oncology
   Indication
    
	
[***]
    	
 
    	
 
    	
 
    	
 
    

 

The total milestone payments for which Corvus may be obligated to pay Vernalis for all Licensed Products [***].

 

6.2.2                              The amount stipulated as payable for each Milestone in the Milestone Table shall be payable by Corvus to Vernalis in accordance with Clause 6.2.3 each time the Milestone is achieved, whether by Corvus alone or in combination with or by one or more Affiliates or Sublicensees.  [***].

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

20

 

6.2.3                              Corvus shall provide Vernalis with written notice immediately upon each occurrence of the achievement of a Milestone for which a payment is due to Vernalis pursuant to Clause 6.2.1.  On such occurrence, Vernalis shall issue an invoice for the amount due and Corvus shall pay such amount within [***], to the bank account stipulated at Schedule 3 or such other bank account as Vernalis may notify to Corvus in accordance with Clause 20 from time to time.

 

6.3                                        Sales Milestones

 

6.3.1                              The table below (the “Sales Milestone Table”) sets out various sales milestones (“Sales Milestones”) that can be achieved in respect of worldwide Net Sales.

 

	
Milestone
    	
 
    	
Payment Obligation Upon
   Achievement of Sales Milestone
   (USD($))
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    
	
[***]
    	
 
    	
[***]
    	
 
    	
[***]
    

 

6.3.2                              The amount stipulated as payable for each Sales Milestone in the Sales Milestone Table shall be payable by Corvus to Vernalis in accordance with Clause 6.3.3 when the Milestone is achieved, whether by Corvus alone or in combination with or by one or more Affiliates or Sublicensees.  [***].

 

6.3.3                              Corvus shall provide Vernalis with written notice immediately upon each occurrence of the achievement of a Sales Milestone.  On such occurrence, Vernalis shall issue an invoice for the amount due and Corvus shall pay such amount within [***], to the bank account stipulated at Schedule 3 or such other bank account as Vernalis may notify to Corvus in accordance with Clause 20 from time to time.

 

6.4                                        Royalties

 

6.4.1                              In further consideration of the licenses granted by Vernalis to Corvus under Clause 2.1, subject to Clause 6.4.3, Corvus shall, subject to the other terms and conditions of this Agreement, pay Vernalis royalties on a Licensed Product-by-Licensed Product and country-by-country basis, according to the portions of Annual Net Sales (“Royalties”), as follows:

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

21

 

	
Portion of Annual Net Sales of Licensed
   Product containing V81444 in a given
   country in United States Dollars ($)
    	
 
    	
Percentage (%) of Net Sales of such
   Licensed Product in such country
    
	
Less than or equal to [***]
    	
 
    	
[***]
    
	
Greater than [***] and less than or equal to [***]
    	
 
    	
[***]
    
	
In excess of [***]
    	
 
    	
[***]
    

 

	
Portion of Annual Net Sales of Licensed
   Product not containing V81444 in a
   given country in United States
   Dollars ($)
    	
 
    	
Percentage (%) of Net Sales of such
   Licensed Product in such country
    
	
Less than or equal to [***]
    	
 
    	
[***]
    
	
Greater than [***] and less than or equal to [***]
    	
 
    	
[***]
    
	
In excess of [***]
    	
 
    	
[***]
    

 

For the avoidance of doubt, all Licensed Product containing the same Adenosine Receptor Antagonist shall be treated as a single Licensed Product for the basis of this calculation, regardless of its form, presentation, delivery system, dosage or formulation.

 

6.4.2                              Royalties are payable on Net Sales of a given Licensed Product on a country-by-country basis such that if, for example, Net Sales in the United States in a given calendar year of Licensed Product containing V81444 equals [***], and Net Sales in the United Kingdom in such calendar year of Licensed Product containing V81444 equals [***], then Corvus will pay to Vernalis an amount equal to ([***] plus [***], for such Net Sales in the United States) plus ([***], for such Net Sales in the United Kingdom).  Corvus’  obligation to pay Royalties to Vernalis under Clause 6.4.1 on Net Sales shall terminate, on a Licensed Product-by-Licensed Product and country-by-country basis, on the later to occur of [***] (the “Royalty Term”).  Upon termination of the royalty obligations of Corvus under this Clause 6.4.2 with respect to a Licensed Product in a country the licenses granted to Corvus in Clause 2.1 shall become non-exclusive, irrevocable and fully paid-up with respect to such Licensed Product in such country and Net Sales of such Licensed Product in such country shall be excluded from the royalty calculations set out in Clause 6.4.1.  For the

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

22

 

avoidance of doubt, the expiry of the Royalty Term with respect to a particular country for a given Licensed Product shall not result in the termination of the Royalty Term for any other Licensed Product with respect to that country or any other country.

 

6.4.3                              If, on a Licensed Product-by-Licensed Product basis, at the time such Licensed Product is sold, [***], then the royalty rate set forth in Clause 6.4.1 shall be [***] of such Product [***].  For example, for sales of less than or equal to [***] of Licensed Product containing V81444 in [***], the royalty rate shall [***].

 

6.5                                        Royalty Procedures

 

6.5.1                              During the Term, following the First Commercial Sale of Licensed Product, Corvus shall on or before the [***] following the end of each [***] deliver to Vernalis a written report for [***] showing, in each case on a country-by-country and Licensed Product-by-Licensed product basis: [***].

 

6.5.2                              Vernalis shall issue an invoice for the Royalties payable according to this Agreement and the written report delivered by Corvus to Vernalis in accordance with Clause 6.5.1.  Corvus acknowledges and agrees that all such invoices shall be issued by Vernalis in reliance on the information provided by Corvus.  Neither the issue of any such invoice nor receipt of payment, shall be, nor shall either be deemed to be, acceptance by Vernalis of the accuracy of any written report and shall in each case be without prejudice to Vernalis’ rights to audit or dispute the amount of Royalties payable.

 

6.5.3                              Corvus shall, [***], pay to Vernalis, in USD ($) by telegraphic transfer to the bank account set out at Schedule 3 the amount stated in such invoice.

 

6.5.4                              The functional currency for accounting will be USD.  Except as the Parties otherwise mutually agree, for billing and reporting, Net Sales will be translated into USD using the currency exchange rates quoted by Bloomberg Professional, a service of Bloomberg L.P., or in the event Bloomberg Professional is not available then The Wall Street Journal using the average monthly rate of exchange for the month to which Net Sales were dated.

 

6.6                                        Records and Audits

 

6.6.1                              Corvus shall keep, and shall cause its Sublicensees and its and their Affiliates to keep, complete and accurate books and financial records

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

23

 

containing all data necessary for the calculation of the amounts payable by Corvus pursuant to this Agreement, which books and financial records shall be kept in accordance with United States GAAP, consistently applied, and shall be retained by Corvus, its Sublicensees and its and their Affiliates as appropriate, until [***] after the end of the calendar year to which they relate.

 

6.6.2                              Upon the written request of Vernalis, Corvus shall permit (and shall use reasonable endeavours to procure that its Sublicensees and its and their Affiliates shall permit) an independent certified public accounting firm of internationally recognised standing selected by Vernalis, and reasonably acceptable to Corvus, to inspect and audit, during normal business hours and upon reasonable prior written notice, such of the records of Corvus, its Sublicensees and its or their Affiliates as may be reasonably necessary to verify the accuracy of the reports provided in accordance with Clause 6.6.1; provided that Vernalis shall not have the right to inspect or audit records for any calendar year more than once or records more than [***] old [***].  If such accounting firm concludes that Corvus owed additional amounts to Vernalis during such period, Corvus shall pay Vernalis the difference between the amount actually owed, as determined by the accounting firm, and the amount actually paid by Corvus, with interest calculated in accordance with Clause 6.6.3 from the date originally due to the date of payment, [***] after the date on which such accounting firm’s written report is delivered to Corvus.  If the accounting firm determines that there has been an underpayment of more than [***], Corvus shall bear all costs related to such audit otherwise Vernalis shall bear the cost of such audit.  All books and financial records made available for inspection or audit shall be deemed to be Corvus’ or its Sublicensees’ Confidential Information.  For the avoidance of doubt, any such independent accounting firm shall, prior to such inspection, enter into a non-disclosure agreement in a form reasonably acceptable to Corvus and its Sublicensees.  The accounting firm shall disclose to the Parties whether or not the payment in question was accurately calculated by Corvus and the specific details concerning any discrepancies but no other information shall be provided to Vernalis.

 

6.6.3                              Any payment that is not paid on the date such payment is due under this Agreement shall bear interest at a rate equal to the lesser of [***] and [***], calculated on the number of days such payment is delinquent, compounded monthly.  For the purposes of this Agreement “LIBOR” shall mean the three (3) month London Interbank Offered Rate as calculated by the British Bankers’ Association or, if LIBOR ceases to be available, the base rate of a London bank selected by Vernalis.

 

6.7                                        Withholding

 

6.7.1                              Any sums payable to Vernalis under this Agreement shall be paid from the United States and [***]

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

24

 

[***].

 

6.7.2                              Vernalis shall complete and return to Corvus any form provided by Corvus that is required by the relevant tax authorities from time to time (including, if required, [***]) to (a) [***]; and (b) [***].  In the event that Vernalis fails to return to Corvus such forms duly completed and signed before the due date for the relevant payment, Corvus will, if and to the extent required by Applicable Law, [***].  Corvus shall [***]; provided, however, that Vernalis may, at any time prior to a payment due date, specify a later due date for payment, and Corvus shall delay making such payment to such later due date (without incurring any liability pursuant to Clause 6.6.3), in order to [***].

 

6.8                                        VAT

 

Any sums payable by Corvus to Vernalis under this Agreement shall [***]. Without prejudice to the obligations set out in the preceding sentence: (x) [***]; and (y) [***] (and what is reasonable shall be considered in the light of the circumstances at that time including the likelihood or otherwise that [***]).

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

25

 

7                                                  Intellectual Property — Ownership

 

7.1                                        As between the Parties any and all Vernalis Licensed IP is and shall remain owned solely by Vernalis.

 

7.2                                        As between the Parties any and all Corvus Background IP is and shall remain owned solely by Corvus.

 

7.3                                        Any and all Corvus Arising IP shall be owned solely by Corvus.

 

8                                                  Intellectual Property - Prosecution, Maintenance, Defence and Enforcement

 

8.1                                        Corvus Patent Rights

 

Corvus shall [***] diligently file, prosecute and maintain the Corvus Patent Rights in its own name.  Corvus shall keep Vernalis reasonably informed on not less than an annual basis with regard to the preparation, filing, prosecution, grant and maintenance of Corvus Patent Rights.  Corvus shall inform Vernalis within [***] of the first filing of any patent application covering a new Corvus Arising Patent Right.

 

8.2                                        Patent Prosecution and Maintenance of Vernalis Patent Rights

 

8.2.1                              Vernalis shall have the right, but not the obligation, to prepare, file, prosecute, and maintain the Vernalis Patent Rights worldwide, [***]. Vernalis shall keep Corvus reasonably informed with regard to the preparation, filing, prosecution, and maintenance of Vernalis Patent Rights.  Vernalis shall provide Corvus with copies of all substantive correspondence from a patent office and drafts of any proposed Patent filings or other prosecution correspondence with respect to Vernalis Patent Rights that are to be filed with patent authorities in the Territory, at least thirty (30) days in advance of Vernalis’ anticipated filing date or any relevant deadline therefor.  Corvus shall have the right to approve all such filings with respect to all Non-Adeno VII Patent Rights by providing written notice to Vernalis either of such approval of such filings or of the changes Corvus requires to such filings, within fourteen (14) days after receiving a copy thereof. Vernalis shall incorporate Corvus’s reasonable comments into such filings prior to submission thereof.

 

8.2.2                              In the event that Vernalis decides not to prepare, file, prosecute, or maintain a Non-Adeno VII Patent Right, Vernalis shall provide at least thirty (30) days (where applicable) prior written notice to Corvus of such intention, and, Corvus shall thereupon have the option, in its sole discretion, to assume the control and direction of the preparation, filing, prosecution, and maintenance of such Non-Adeno VII Patent Right in Vernalis’ name in such country, with the cost of such activities for Corvus alone.  In the event that Vernalis decides not to prepare, file, prosecute, or maintain an Adeno VII Patent Right, Corvus shall only have the right to assume the control and direction of the preparation, filing, prosecution and maintenance of such Patent Right if the Redox Sub-Licence has expired or been terminated.  In such event, if Corvus opts to assume the control and

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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direction of such Patent Rights then the cost of such activities shall be for Corvus alone.

 

8.3                                        Notification of Licensed Product Infringements and Vernalis Patent Rights Challenges

 

Each Party shall promptly notify the other Party in writing of any alleged or threatened (a) infringement of the Vernalis Patent Rights by a Third Party in the Field in the Territory of which such Party becomes aware (“Licensed Product Infringement”), and (b) assertion of invalidity or unenforceability of any Vernalis Patent Rights by a Third Party in the Field in the Territory of which such Party becomes aware, whether as a counterclaim or otherwise (“Vernalis Patent Rights Challenge”).

 

8.4                                        Generic Competition

 

Notwithstanding the foregoing, if either Party (a) reasonably believes that a Third Party [***]; (b) [***]; or (c) [***], it shall (i) [***] and (ii) [***], and the Parties’ rights and obligations with respect to any legal action as a result of such certification shall be as set forth in Clause 8.5.

 

8.5                                        Right to prosecute and defend Patent Rights

 

8.5.1                              Vernalis Patent Rights Initial Enforcement

 

Subject to Clause 8.5.2, as between the Parties, Vernalis shall have the first right, but not the obligation, to prosecute any Licensed Product Infringement of or otherwise challenge such Generic Competition by asserting the Vernalis Patent Rights, and to defend any Vernalis Patent Rights Challenge, in the Territory, and to control such actions (including any declaratory judgment action and any settlement), provided that Vernalis shall keep Corvus reasonably informed as to the status of, and all material developments in such action, and shall consider in good faith the input of Corvus regarding the strategy and handling of such enforcement activities.

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

27

 

8.5.2                              Non-Adeno VII Patent Rights Initial Enforcement

 

Notwithstanding the foregoing, and solely with respect to Non-Adeno VII Patent Rights, as between the Parties, Corvus shall have the first right, but not the obligation, to prosecute any Licensed Product Infringement of or otherwise challenge such Generic Competition by asserting the Non-Adeno VII Patent Rights, and to defend any Vernalis Patent Rights Challenge related to the Non-Adeno VII Patent Rights, in the Territory, and to control such actions including any declaratory judgment action and any settlement, provided that Corvus shall keep Vernalis reasonably informed as to the status of, and all material developments in such action, and shall consider in good faith the input of Vernalis regarding the strategy and handling of such enforcement activities.

 

8.5.3                              Timing

 

The Party with the first right to prosecute or defend with respect to any infringement, enforcement or challenge described in Clauses 8.5.1 and 8.5.2 shall have a period of ninety (90) days (or fifteen (15) days if a notice of certification pursuant to the ANDA Act has been issued) following the first notice provided pursuant to Clause 8.5.1 and 8.5.2 to elect to so enforce or defend such Vernalis Patent Rights in the applicable jurisdiction.  The enforcing or defending Party shall share drafts of all submissions or other documents exchanged in the relevant proceedings with the other Party and shall have due regard to any representations made by the other Party in relation thereto. In the event the enforcing Party does not elect to prosecute or defend such infringement or challenge before the first to occur of (A) ninety (90) days (or fifteen (15) days in the case of a certification under the ANDA Act) following the first notice provided pursuant to Clause 8.5.1 and 8.5.2 with respect to such matter, or (B) thirty (30) days before the expiration of any time period under Applicable Law that would, if an enforcement proceeding was not filed within such time period, limit or compromise the remedies available from such enforcement proceeding, it will so notify the other Party in writing and in the case where such other Party then desires to commence a suit or take action to enforce or defend the applicable Vernalis Patent Rights with respect to such infringement or challenge in the applicable jurisdiction, such other Party will thereafter have the right to commence such a suit or take such action to enforce or defend the applicable Vernalis Patent Rights at such other Party’s expense.

 

8.5.4                              Allocation of Rights

 

Where Corvus prosecutes the Licensed Product Infringement or challenges the Generic Competition by asserting the Vernalis Patent Rights or defends a Vernalis Patent Rights Challenge Corvus shall hold Vernalis harmless from and against any and all costs and expenses of such litigation, including reasonable counsel’s fees and expenses (except as expressly provided in Clause 8.5.6), and shall also [***].

 

Where Vernalis prosecutes the Licensed Product Infringement of or challenges the Generic Competition by asserting the Vernalis Patent Rights or defends a Vernalis Patent Rights Challenge, Vernalis shall hold Corvus harmless from and against any and all costs and expenses of such litigation, including reasonable counsel’s fees and

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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expenses (except as expressly provided in Clause 8.5.6), and shall also [***].

 

8.5.5                              Cooperation

 

Where a Party prosecutes a Licensed Product Infringement, challenges Generic Competition or defends a Vernalis Patent Rights Challenge in the Field (the “Litigating Party”), the other Party will reasonably cooperate with and assist the Litigating Party in relation to such claim, suit or proceeding, and, if the Litigating Party so elects, the other Party shall join as a party to such claim, suit, or proceeding in the Territory and shall provide the Litigating Party with all necessary assistance in relation to such claim, suit or proceeding.  Where the Litigating Party requires the other Party to be joined as a party in such proceeding, the Litigating Party shall bear the other Party’s’ costs and expenses arising from being joined as a party to such claim, suit or proceeding provided that the other Party does not appoint its own counsel and uses the Litigating Party’s counsel.  The non-Litigating Party in relation to any enforcement or defense action or proceeding set forth in Clause 8.5 will have the right, at its own expense and by counsel of its choice, to be represented in any such action or proceeding.

 

8.5.6                              Recovery

 

Except as otherwise agreed by the Parties in connection with a cost sharing arrangement, any recovery realized as a result of such litigation described in Clause 8.5 (whether by way of settlement or otherwise) shall be first, allocated to reimburse the Parties for their costs and expenses in making such recovery including for Adeno VII Patent Rights litigation, the costs and expenses of [***], as applicable, to any such litigation (which amounts shall be allocated pro rata, with respect to costs, if insufficient to cover the totality of such expenses).  Any remainder after such reimbursement is made shall be split between the Parties such that the Litigating party would retain [***] of such remainder and the non-Litigating Party would retain [***] of such remainder.

 

8.6                                        Patent Term Extension.

 

After filing an application for Regulatory Approval for a given Licensed Product in the Territory, Corvus shall provide to Vernalis a written list specifying all Vernalis Patent Rights that Corvus is in good faith considering to be the subject of a patent extension with respect to such Licensed Product. After receiving Regulatory Approval for such Licensed Product, Corvus shall identify one or more Patents within the Vernalis Patent Rights in the country in the Territory where the Licensed Product was approved, and notify Vernalis of the identified Patent(s). Corvus shall then have the right to request that Vernalis file, [***], an application for an extension, and take all reasonable actions necessary. Vernalis agrees to cooperate and to use good faith efforts to obtain such an extension.

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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8.7                                        Infringement of Third Party Rights

 

8.7.1                              Notification

 

If the Exploitation of the Licensed Product in the Field and in the Territory results in a claim for patent infringement by a Third Party, the Party first having notice of such claim shall promptly notify the other Party in writing of such a claim. Following such notice, the Parties agree to enter into either a joint defense or common interest agreement, under which agreement the Parties can share the known facts of such infringement in reasonable detail, if they are advised to do so by counsel.

 

8.7.2                              Third Party Claims

 

[***] shall have the right to assume control of the defense of any claims brought by Third Parties alleging infringement of Third Party intellectual property rights in connection with the Exploitation of the Licensed Product in the Field in the Territory, [***] and to be represented by its own counsel. If requested [***].

 

8.7.3                              Licenses to Third Party Rights.

 

If as a result of defending claims as set forth in Clause 8.7 or otherwise, Corvus determines in good faith that it is reasonably necessary to obtain a license under any Third Party intellectual property rights that would be infringed by the Exploitation of the Licensed Product in the Field in the Territory, then [***]. All amounts due under such Third Party license agreement with respect to manufacture, use or sale of the Licensed Product in the Field in the Territory [***].

 

9                                                  Warranties and Liability

 

9.1                                        Mutual Representations and Warranties

 

Vernalis and Corvus each represents and warrants, as of the Commencement Date, and covenants, as follows:

 

9.1.1                              it is a company duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization, and has all requisite power and authority, corporate or otherwise, to execute, deliver, and perform this Agreement;

 

9.1.2                              it is not under any obligation, contractual or otherwise, to any person that conflicts with or is inconsistent in any material respect with the terms of this Agreement, or that would impede the diligent and complete fulfilment of its obligations under this Agreement; and

 

9.1.3                              This Agreement is a legal, valid, and binding obligation of such Party enforceable against it in accordance with its terms and conditions, subject

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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to the effects of bankruptcy, insolvency, or other laws of general application.

 

9.2                                        Additional Representations and Warranties of Vernalis

 

Vernalis further represents and warrants, as of the Commencement Date, and covenants, as follows:

 

9.2.1                              Vernalis controls the Vernalis Patent Rights as of the Commencement Date and has the right to grant the licenses and sublicenses specified in this Agreement.

 

9.2.2                              Neither Vernalis nor its Affiliates or, to Vernalis’ knowledge, Vernalis’ prior or current licensees ([***]) performing activities in connection with the Vernalis Licensed Compounds or Licensed Products, own or control any Patent Rights claiming the composition, method of use or manufacture, formulation or other attribute of Licensed Vernalis Compounds or Licensed Products that is not included in the Vernalis Patent Rights licensed to Corvus pursuant to this Agreement.

 

9.2.3                              Vernalis has disclosed to Corvus all material agreements under which Corvus receives a sublicense under this Agreement.

 

9.2.4                              Vernalis has not received any written claim or demand alleging that the Vernalis Patent Rights or the Vernalis Know How are invalid or unenforceable.

 

9.2.5                              Vernalis has no knowledge of any defects in form and filing of the Vernalis Patent Rights that could reasonably be anticipated to result in invalidity or unenforceability of such Vernalis Patent Rights.

 

9.2.6                              Vernalis has not received any written notice of, and has not been served with, any Third Party claims, suits or actions issued in any court or competent tribunal to which Vernalis or its Affiliates, or, to Vernalis’ knowledge, Vernalis’ prior or current licensees, were or are a party alleging either infringement or misappropriation of intellectual property rights owned or controlled by such Third Party by the manufacture, use or sale of the Vernalis Licensed Compound or Licensed Product, or that such Third Party has an ownership or inventorship interest in such Vernalis Patent Rights.  For the avoidance of doubt, this Clause 9.2.6 does not constitute a representation or warranty that the manufacture, use or sale of the Vernalis Licensed Compound or Licensed Product does not or may not infringe any Third Party intellectual property right.

 

9.2.7                              [***]

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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[***].

 

9.2.8                              Neither Vernalis nor any of its Affiliates, nor, to Vernalis’ knowledge, any of its licensees or independent contractors performing activities in connection with the Development or Manufacture of Licensed Products prior to the Commencement Date has been debarred or is subject to debarment and neither Vernalis nor any of its Affiliates, or, to Vernalis’ knowledge, any of its licensees or independent contractors performing activities in connection with the Development or Manufacture of Licensed Products prior to the Commencement Date has used in any capacity, in connection with such activities, any person who has been debarred pursuant to Section 306 of the United States Food, Drug, and Cosmetic Act, or any equivalent legislation in any other jurisdiction, or who is the subject of a conviction described in such section or equivalent legislation.

 

9.3                                        Additional Representations and Warranties of Corvus

 

Corvus further represents and warrants to Vernalis, as of the Commencement Date, and covenants, as follows:

 

9.3.1                              Neither Corvus nor any of its Affiliates has been debarred or is subject to debarment and neither Corvus nor any of its Affiliates will use in any capacity, in connection with the work to be performed under this Agreement, any person who has been debarred pursuant to Section 306 of the United States Food, Drug, and Cosmetic Act, or any equivalent legislation in any other jurisdiction, or who is the subject of a conviction described in such section or equivalent legislation.  Corvus agrees to inform Vernalis in writing promptly if it or any such person is debarred or is the subject of a conviction described in Section 306 or any equivalent legislation in any jurisdiction, or any investigation or claim in relation to the same.

 

9.3.2                              [***].

 

9.3.3                              Neither Corvus nor any of its Affiliates owns, or is a licensee of, any Patent Rights which cover (i) a Vernalis Licensed Compound, (ii) a Licensed Product, (iii) any Corvus Background Know How or (iv) any Adenosine Receptor Antagonist.

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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9.3.4                              Corvus raised approximately [***] in a Series A financing round in 2014 and early 2015 and as of the Commencement Date has [***] remaining and available for commencement of the pre-clinical studies set out in Schedule 7. Subject to the terms and conditions of the Series A Preferred Stock Purchase Agreement, dated November 26, 2014, Corvus may raise an additional [***] through subsequent sales and issuances of its Series A Preferred Stock.

 

9.3.5                              Corvus has or can obtain sufficient expertise, employee resources and access to sub-contracting facilities to conduct the pre-clinical studies appropriate and necessary to develop Licensed Products as initially set out in Schedule 7.

 

9.4                                        Disclaimer of Warranties

 

Except for the express warranties set forth in this Agreement, neither Party makes any representations or grants any warranties, express or implied, either in fact or by operation of Applicable Law or otherwise, and each Party specifically disclaims any other warranties, whether written or oral, or express or implied, including any warranty of quality, merchantability, or fitness for a particular use or purpose or any warranty as to the validity of any Patent Rights or the non-infringement of any Patent Rights of Third Parties.

 

10                                           Indemnification and Liability

 

10.1                                 Indemnification of Vernalis

 

Corvus shall indemnify Vernalis, its Affiliates and their respective directors, officers, employees, and agents, and defend and save each of them harmless, from and against any and all losses, damages, liabilities, costs, and expenses (including reasonable counsel’s fees and expenses) (collectively, “Losses”) in connection with any and all suits, investigations, claims, or demands of Third Parties (collectively, “Third Party Claims”) arising from or occurring as a result of: (a) the breach by Corvus of this Agreement, (b) the negligence or wilful misconduct on the part of Corvus or Sublicensees,  or its or their Affiliates, distributors or contractors or its or their respective directors, officers, employees, and agents in performing its or their obligations under this Agreement, or (c) the Exploitation by Corvus or any of its Sublicensees, or its or their Affiliates, or its or their distributors or contractors of Licensed Product or the Vernalis Licensed Compound in the Territory after the Commencement Date or by Corvus alone under the Confidential Disclosure Agreement prior to the Commencement Date, except for those Losses for which Vernalis has an obligation to indemnify Corvus pursuant to Clause 10.2, as to which Losses each Party shall indemnify the other to the extent of their respective liability.

 

10.2                                 Indemnification of Corvus

 

Vernalis shall indemnify Corvus, its Affiliates and their respective directors, officers, employees, and agents, and defend and save each of them harmless, from and against any and all Losses in connection with any and all Third Party Claims arising from or occurring as a result of  (a) the breach by Vernalis of this Agreement, (b) the negligence or wilful misconduct on the part of Vernalis, or its or their Affiliates, or its

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

33

 

or their respective directors, officers, employees, and agents in performing its or their obligations under this Agreement, or (c) the Exploitation by Vernalis or any of its licensees, or its or their Affiliates, or its or their distributors or contractors either (i) of Licensed Product or the Vernalis Licensed Compound in the Territory prior to the Commencement Date, or (ii) of [***] at any time, except for those Losses for which Corvus has an obligation to indemnify Vernalis pursuant to Clause 10.1, as to which Losses each Party shall indemnify the other to the extent of their respective liability for the Losses.

 

10.3                                 Notice of Claim

 

All indemnification claims in respect of a Party, its Affiliates, or their respective directors, officers, employees and agents shall be made solely by such Party to this Agreement (the “Indemnified Party”).  The Indemnified Party shall give the indemnifying Party prompt written notice (an “Indemnification Claim Notice”) of any Losses or discovery of fact upon which such indemnified Party intends to base a request for indemnification under this Clause 10, but in no event shall the indemnifying Party be liable for any Losses to the extent resulting from any delay in providing such notice.  Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss is known at such time).  The Indemnified Party shall furnish promptly to the indemnifying Party copies of all papers and official documents received in respect of any Losses and Third Party Claims.

 

10.4                                 Control of Defence

 

10.4.1                       At its option, the indemnifying Party may assume the defence of any Third Party Claim by giving written notice to the Indemnified Party [***] after the indemnifying Party’s receipt of an Indemnification Claim Notice.  Upon assuming the defence of a Third Party Claim, the indemnifying Party may appoint as lead counsel in the defence of the Third Party Claim any legal counsel selected by the indemnifying Party.  In the event the indemnifying Party assumes the defence of a Third Party Claim, the Indemnified Party shall immediately deliver to the indemnifying Party all original notices and documents (including court papers) received by the Indemnified Party in connection with the Third Party Claim.  Should the indemnifying Party assume the defence of a Third Party Claim, except as provided in Clause 10.4.3, the indemnifying Party shall not be liable to the Indemnified Party for any legal expenses subsequently incurred by such Indemnified Party in connection with the analysis, defence or settlement of the Third Party Claim unless incurred in connection with a specific request made in writing by the indemnifying Party.  In the event that it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or hold harmless the Indemnified Party from and against the Third Party Claim, the Indemnified Party shall reimburse the indemnifying Party for any and all costs and expenses (including reasonable counsels’ fees and costs) and any Losses incurred by the indemnifying Party in its defence of the Third Party Claim.

 

10.4.2                       Without limiting Clause 10.4.1, the Indemnified Party shall be entitled to participate in, but not control, the defence of such Third Party Claim and to

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

34

 

employ counsel of its choice for such purpose; provided, however, that such employment shall be at the Indemnified Party’s own expense unless (a) the employment thereof has been specifically authorized by the indemnifying Party in writing, (b) the indemnifying Party has failed to assume the defence and employ counsel in accordance with Clause 10.4.1 (in which case the Indemnified Party shall control the defence), or (c) the interests of the Indemnified Party and the indemnifying Party with respect to such Third Party Claim are sufficiently adverse to prohibit the representation by the same counsel of both Parties under Applicable Law, ethical rules or equitable principles.

 

10.4.3                       With respect to all Losses in connection with Third Party Claims, where the indemnifying Party has assumed the defence of the Third Party Claim in accordance with Clause 10.4.1, the indemnifying Party shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss; provided it obtains the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld or delayed).  If the indemnifying Party does not assume and conduct the defence of a Third Party Claim as provided above, the Indemnified Party may defend against such Third Party Claim; provided that the Indemnified Party shall not settle any Third Party Claim without the prior written consent of the indemnifying Party, not to be unreasonably withheld or delayed.

 

10.4.4                       Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each indemnitee to, cooperate in the defence or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection with such Third Party Claim, and the indemnifying Party shall reimburse the Indemnified Party for all its reasonable out-of-pocket expenses in connection therewith.

 

10.5                                 Indirect, consequential and other losses

 

10.6                                 IN NO EVENT SHALL EITHER PARTY BE LIABLE HEREUNDER TO THE OTHER PARTY FOR ANY LOSS, DAMAGE, COSTS OR EXPENSES OF ANY NATURE WHATSOEVER INCURRED OR SUFFERED BY THE OTHER PARTY OR ITS AFFILIATES OF A SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE NATURE, WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS OR REVENUE ARISING IN CONNECTION WITH ACTIVITIES CONDUCTED UNDER THIS AGREEMENT.

 

10.7                                 Insurance

 

Corvus shall have and maintain such type and amounts of insurance covering its Exploitation of the Vernalis Licensed Compound and Licensed Product as is (a) normal and customary in the pharmaceutical industry generally for parties similarly situated and (b) otherwise required by Applicable Law. Corvus shall have and maintain such insurance during the Term and after the expiration or termination of this Agreement for a period of [***] following termination or expiration of

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

35

 

this Agreement in its entirety for any reason. Upon request by Vernalis, Corvus shall provide certificates of insurance evidencing compliance with this Clause 10.7.

 

11                                           Confidentiality

 

11.1                                 At all times during the Term and for a period of [***] following termination or expiration of this Agreement in its entirety, each Party shall, and shall cause its officers, directors, employees and agents to:

 

11.1.1                       keep confidential and not publish or otherwise disclose to a Third Party and not use, directly or indirectly, for any purpose, any Confidential Information furnished or otherwise made known to it, directly or indirectly, by the other Party, except to the extent such disclosure or use is expressly permitted by the terms of this Agreement or is reasonably necessary for the performance of, or the exercise of such Party’s rights under, this Agreement;

 

11.1.2                       ensure that only those of its officers, directors, employees, and agents have access to the Confidential Information on a strictly applied “need to know” basis and are informed of the secret and confidential nature of it; and

 

11.1.3                       keep the Confidential Information separately identifiable at all times from all other Know How which it may hold.

 

11.2                                 The obligations of confidentiality and non-use set out in Clause 11.1 shall not extend to any Confidential Information which:

 

11.2.1                       is or hereafter becomes part of the public domain by public use, publication, general knowledge or the like through no wrongful act, fault or negligence on the part of the receiving Party;

 

11.2.2                       can be demonstrated by documentation or other competent proof to have been in the receiving Party’s possession prior to disclosure by the disclosing Party without any obligation of confidentiality with respect to such information; or

 

11.2.3                       is subsequently received by the receiving Party from a Third Party who is not bound by any obligation of confidentiality with respect to such information;

 

11.2.4                       has been published by a Third Party or otherwise enters the public domain through no fault of the receiving Party in breach of this Agreement; or

 

11.2.5                       can be demonstrated by documentation or other competent evidence to have been independently developed by or for the receiving Party without reference to the disclosing Party’s Confidential Information.

 

Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of the receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the receiving Party.  Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of the receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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receiving Party unless the combination and its principles are in the public domain or in the possession of the receiving Party.

 

11.3                                 Each Party may disclose Confidential Information to the extent that such disclosure is:

 

11.3.1                       made in response to a valid order of a court of competent jurisdiction or other Government Authority or, if in the reasonable opinion of the receiving Party’s legal counsel, such disclosure is otherwise required by a securities regulator with which such Party or its Affiliates are listed (including the UKLA); provided, however, that the receiving Party shall first have given notice to the disclosing Party and given the disclosing Party a reasonable opportunity to quash such order or to obtain a protective order or confidential treatment requiring that the Confidential Information and documents that are the subject of such order be held in confidence by such court or agency or, if disclosed, be used only for the purposes for which the order was issued; and provided further that the Confidential Information disclosed in response to such court or order of a Government Authority shall be limited to that information which is legally required to be disclosed in response to such court or governmental order;

 

11.3.2                       made by or on behalf of the receiving Party to the Government Authorities or Regulatory Authorities as required in connection with any filing, application or request for Marketing Authorization, or to comply with the requirements of any securities exchange, including, without limitation, in connection with a public offering; provided, however, that reasonable measures shall be taken to assure confidential treatment of such information to the extent practicable and consistent with Applicable Law; or

 

11.3.3                       made by or on behalf of the receiving Party to the receiving Party’s Affiliates, and actual or potential acquirers, merger partners, licensors, licensees, Sublicensees, assignees, subcontractors, investment bankers, investors, other potential financial partners and independent contractors, and their respective officers, directors, employees, and agents, in each case who are or may become directly involved in or concerned with the carrying out of this Agreement or engaged in advising the receiving Party on business or financial matters, on a strictly applied “need to know” basis; provided, however, that such persons and entities shall use such Confidential Information solely for the purpose of carrying out this Agreement or advising the receiving Party on business or financial matters, and further provided that such persons and entities are either subject to confidentiality and non-use obligations at least as stringent as the confidentiality and non-use obligations provided for in this Clause 11 or bound by substantially similar obligations under law or pursuant to rules of professional ethics.

 

11.4                                 Upon the effective date of the termination of this Agreement for any reason, either Party may request in writing, and the other Party shall either, with respect to Confidential Information to which such first Party does not retain rights under the surviving provisions of this Agreement: (a) promptly destroy all copies of such Confidential Information in the possession of the other Party and confirm such

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

37

 

destruction in writing to the requesting Party; or (b) promptly deliver to the requesting Party, at the other Party’s expense, all copies of such Confidential Information in the possession of the other Party; provided, however, the other Party shall be permitted to retain one (1) copy of such Confidential Information for the sole purpose of performing any continuing obligations under this Agreement or for archival purposes.  Notwithstanding the foregoing, such other Party also shall be permitted to retain such additional copies of or any computer records or files containing such Confidential Information that have been created solely by such Party’s automatic archiving and back-up procedures, to the extent created and retained in a manner consistent with such other Party’s standard archiving and back-up procedures, but not for any other use or purpose.  All Confidential Information shall continue to be subject to the terms of this Agreement for the period stated in Clause 11.1.

 

12                                           Term and Termination

 

12.1                                 Term

 

Subject to the other provisions of this Clause 12 this Agreement shall expire on a Licensed Product-by-Licensed Product and country-by-country basis when no further payment is due from Corvus to Vernalis in relation to sales of such Licensed Product in that country (the “Term”).

 

12.2                                 Termination for Cause or Insolvency

 

12.2.1                       Each of the Parties shall have the right to terminate this Agreement for cause with immediate effect upon giving written notice of termination to the other (the “Defaulting Party”) if the Defaulting Party commits a material breach of this Agreement which is incapable of remedy or which in the case of a breach capable of remedy shall not have been remedied within ninety (90) days (or for breaches of payment obligations, thirty (30) days) of the receipt by it of a written notice from the other Party identifying the breach and requiring its remedy.

 

12.2.2                       Vernalis shall have the right to terminate this Agreement in its entirety by giving ninety (90) days’ notice of termination in writing to Corvus if Corvus or any of its Affiliates challenges or threatens to challenge the validity of, or Vernalis’ title to any of the Vernalis Patent Rights in any country. Corvus shall include in its agreements with Sublicensees a provision stating that if such Sublicensee or any of its Affiliates challenges or threatens to challenge the validity of, or Vernalis’ title to any of the Vernalis Patent Rights in any country, Corvus has the right to terminate the sublicense granted to such Sublicensee under such Vernalis Patent Rights.  If such Sublicensee breaches such obligation, Corvus shall terminate such sublicense.

 

12.2.3                       In the event that either Party (a) files for protection under bankruptcy or insolvency laws, (b) makes an assignment for the benefit of creditors, (c) appoints or suffers appointment of a receiver or trustee over substantially all of its property that is not discharged within ninety (90) days after such filing, (d) proposes a written agreement of composition or extension of its debts, (e) proposes or is a party to any dissolution or

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

38

 

liquidation, (f) files a petition under any bankruptcy or insolvency act or has any such petition filed against that is not discharged within sixty (60) days of the filing thereof, or (g) ceases for any reason to carry on business, then the other Party may terminate this Agreement in its entirety effective immediately upon written notice to such Party.

 

12.3                                 Termination at Will

 

Corvus may terminate this Agreement at will in its entirety on ninety (90) days’ prior written notice to Vernalis, provided that Corvus is not in material breach of this Agreement and has not received any written notice pursuant to Clause 12.2.1.

 

13                                           Consequences of Termination

 

13.1                                 In the event of termination of this Agreement for any reason:

 

13.1.1                       All rights and licenses granted by Vernalis to Corvus under this Agreement shall immediately terminate; and

 

13.1.2                       All outstanding sums payable by Corvus to Vernalis as of the effective date of such termination shall immediately become due and payable.

 

13.2                                 If Corvus terminates this Agreement pursuant to Clause 12.3 (termination at will) then:

 

13.2.1                       Corvus shall, at Vernalis’ election made in writing within thirty (30) days after the effective date of termination of this Agreement (such election to be made in Vernalis’ sole discretion), and hereby does effective as of the date Vernalis provides such written election to Corvus, grant Vernalis an exclusive, royalty-bearing (to the extent provided in Clause 13.2.2), irrevocable, perpetual, sub-licensable (through multiple tiers), transferable license under all Corvus IP claiming or covering inventions, technology or Know How actually used in connection with, or integrated into, the Development, Manufacture or Commercialization of the Vernalis Licensed Compounds or Licensed Products, solely to Exploit the Vernalis Licensed Compound and Licensed Products in the Field in the Territory; and

 

13.2.2                       if there has been at least one [***] of Licensed Product in [***] for which all primary and secondary endpoints in a defined patient population have been met, the licence set forth in Clause 13.2.1 shall be royalty-bearing at a rate of [***] of Net Sales of such Licensed Product sold for the same Indication as was studied in such [***].

 

13.3                                 If Vernalis terminates this Agreement pursuant to Clause 12.2.1 (material breach), 12.2.2 (challenge to IP) or 12.2.3 (insolvency), Corvus shall and hereby does, effective as of the effective date of termination of this Agreement, grant Vernalis an exclusive, irrevocable, perpetual, royalty-free, sub-licensable (through multiple tiers), transferable license under all Corvus IP claiming or covering inventions, technology or Know How actually used in connection with, or integrated into, the Development, Manufacture or Commercialization of the Vernalis Licensed

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

39

 

Compounds or Licensed Products, solely to Exploit the Vernalis Licensed Compound and Licensed Products in the Field in the Territory.

 

13.4                                 Where the Agreement is terminated pursuant to Clause 12.2 or 12.3, within three (3) months of termination Corvus shall return to Vernalis or, at Vernalis’ request, destroy any in-process and completed GMP and non GMP material containing or comprising any Vernalis Licensed Compound or Licensed Product and any samples of backup compounds and intermediates.  If Corvus returns such items to Vernalis, Vernalis shall reimburse Corvus its direct costs of obtaining such items within thirty (30) days after Vernalis receives such items pursuant to this Clause 13.4.

 

13.5                                 In the event of a license being granted to Vernalis pursuant to Clause 13.2 or 13.3, with respect to any Corvus IP, Corvus shall promptly supply Vernalis with copies of all [Documents embodying the Corvus Background Know How or Corvus Arising Know How (as applicable) licensed to Vernalis pursuant to Clause 13.2 or 13.3 for use in Exploiting the Vernalis Licensed Compound and Licensed Products in the Field in the Territory.

 

13.6                                 If Vernalis, its Affiliates or licensees practices the rights licensed to it pursuant to Clause 13.2 or 13.3, Vernalis shall indemnify Corvus as provided in Clause 10.2.

 

13.7                                 Save as may be expressly specified otherwise in this Agreement the provisions of Clauses 2.2.2, 5.2, 6.2 to 6.4 inclusive (only to the extent that any payment under these Clauses is outstanding as at the date of termination), 6.6.1, 6.6.2, 6.6.3, 6.7, 6.8, 7, 9.4, 10, 11, 13, 14, 16, 17, 18, 19, 20, 22 and 24 shall survive termination of this Agreement.

 

14                                           Assignment and Change of Control

 

14.1                                 This Agreement and the licenses herein granted shall be binding upon and inure to the benefit of the successors in interest of the respective Parties.  Neither this Agreement nor any interest hereunder shall be assignable by either Party without the written consent of the other, such consent not to be unreasonably withheld or delayed, provided, however, that:

 

14.1.1                       Vernalis may assign this Agreement or any part of its rights and obligations hereunder to any Affiliate or to any company with which Vernalis may merge or consolidate, or to which it may transfer all or substantially all of its assets to which this Agreement relates, without obtaining the consent of Corvus;

 

14.1.2                       Corvus may assign or novate this Agreement or any part of its rights and obligations hereunder to any Affiliate or to any person with similar or greater financial resources and expertise as Corvus, provided such person is [***].  If Corvus wishes to assign or novate this Agreement or any part of its rights and obligations hereunder to any person which does not meet the above criteria then it shall not do so without Vernalis’s prior written consent (such consent not to be unreasonably withheld or delayed),

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

40

 

and provided always that such Affiliate or other permitted assignee undertakes in writing to such other Party to be bound by the terms of this Agreement.

 

Any assignment not in compliance with this Clause 14.1 shall be void and of no effect.

 

14.2                                 Corvus shall immediately notify Vernalis upon the occurrence of a change in the Control of Corvus.  Corvus shall make such notification to Vernalis in accordance with Clause 20, and provide Vernalis with reasonable details of such change in the Control of Corvus. The third party acquiring Corvus shall continue to make Milestone and Royalty payments to Vernalis under Clauses 6.2, 6.3 and 6.4.

 

15                                           Force Majeure

 

15.1                                 A Party shall not be liable for a failure to perform any of its obligations under this Agreement (other than the obligations on Corvus to make payments to Vernalis under Clause 6) during the period and to the extent that that Party is prevented or hindered from complying with them by any cause beyond its reasonable control including (insofar as beyond such control) strikes, lock-outs, labor disputes, act of God, war, riot, civil commotion, terrorism, epidemic disease, accident, fire, flood, storm, earthquake (each a “Force Majeure Event”).  The affected Party shall give notice to the other Party of the Force Majeure Event and its effect on its ability to perform its obligations and shall use all reasonable efforts to address the relevant event.  If the notice is not given by the affected Party within a reasonable period after that Party knew or ought to have known of the Force Majeure Event, it shall remain liable to the other Party for the consequences of its failure to perform.

 

15.2                                 The exemption provided by Clause 15.1 shall be granted to the relevant Party for as long as the Force Majeure Event persists; provided that if it shall persist for a continuous period of more than [***] the Party not affected by the Force Majeure Event may terminate this Agreement on [***] notice, with the corresponding consequences of termination as if such termination has been by the Party not affected pursuant to Clause 12.2.1.

 

16                                           Governing Law and Jurisdiction

 

This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with English law. The Parties irrevocably agree that the English courts shall have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).

 

17                                           Waiver

 

17.1                                 The failure on the part of either Party to exercise or enforce any right conferred upon it hereunder shall not be deemed to be a waiver of any such right or operate to bar the enforcement thereof at any time or times thereafter.

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

41

 

18                                           Severance of Terms

 

18.1                                 If any provision or part-provision of this Agreement shall be held to be illegal, void, invalid or unenforceable under the law of any jurisdiction:

 

18.1.1                       that provision or part-provision shall, to the extent required, be deemed to be deleted, and the validity and enforceability of the other provisions of this Agreement shall not be affected; and

 

18.1.2                       the legality, validity and enforceability of the whole of this Agreement in any other jurisdiction shall not be affected.

 

Additionally, the Parties will work in good faith to replace the severed provision with one achieving the purpose of the severed provision that is valid and enforceable.

 

19                                           Entire Agreement/Variations

 

19.1                                 This Agreement, together with all Schedules hereto, constitute the whole agreement between the Parties and supersede any previous agreement between the Parties relating to its subject matter. Each Party acknowledges that in entering into this Agreement, it does not rely on any representation, warranty or other provision, except as expressly provided for under this Agreement.

 

19.2                                 No variation, amendments, modification or supplement to this Agreement shall be valid unless agreed in writing in the English language and signed by a duly authorized representative of each Party.

 

20                                           Notices

 

20.1                                 Any notice or other communication required or permitted to be given by either Party under this Agreement shall be effective when delivered, if delivered by hand or by electronic facsimile, or five (5) Business Days after mailing if mailed by registered or certified mail (postage prepaid and return receipt requested), or two (2) Business Days after deposit with a courier if sent by an internationally recognised courier, and shall be addressed to each Party at the addresses set out below or such other address as may be designated by notice pursuant to this Clause 20.1.

 

20.2                                 Address for notices:

 

	
Corvus:
    	
 
    
	
 
    	
 
    
	
Address:
    	
Corvus Pharmaceuticals, Inc.
    
	
 
    	
863 Mitten Road
    
	
 
    	
Suite 102
    
	
 
    	
Burlingame, CA 94010
    
	
 
    	
 
    
	
For the attention of:
    	
Chief Executive Officer
    

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

42

 

	
Vernalis:
    	
 
    
	
 
    	
 
    
	
Address:
    	
Vernalis (R&D) Limited
    
	
 
    	
100 Berkshire Place
    
	
 
    	
Wharfedale Road
    
	
 
    	
Winnersh
    
	
 
    	
Berkshire
    
	
 
    	
RG41 5RD, UK
    
	
 
    	
 
    
	
Fax number:
    	
+44 (0) 118 938 0001
    
	
 
    	
 
    
	
For the attention of:
    	
Company Secretary
    

 

21                                           Counterparts

 

This Agreement may be executed in any number of counterparts, each of which, when executed, shall be an original, and all the counterparts together shall constitute one and the same instrument.

 

22                                           This Agreement not to Constitute a Partnership

 

Nothing in this Agreement and no action taken by the Parties pursuant to this Agreement shall constitute or be deemed to constitute a partnership, association, joint venture or other co-operative entity between the Parties and neither Party shall have any authority to bind the other in any way except as provided in this Agreement.

 

23                                           Costs

 

Each Party shall bear its own costs, legal fees and other expenses incurred in the negotiation, preparation, execution and implementation of this Agreement and the documents referred to herein.

 

24                                           Announcements

 

24.1                                 Subject to Clause 11, neither Party shall issue any press release, publication or other similar public communication relating to this Agreement, its subject matter or the transactions covered by it, or the activities of the Parties under or in connection with this Agreement (a “Publication”) without first obtaining written permission from the other Party, except for information that has been previously disclosed publicly without breach of this Clause 24.1.

 

24.2                                 Either Party may publish and disseminate the press release attached at Schedule 4 or parts thereof or the facts and matters set out therein.

 

25                                           Anti-Bribery and Anti-Corruption

 

25.1                                 Both Parties shall, to the extent applicable to the Parties’ performance of activities under this Agreement, including the place of such performance, and/or if required by the Relevant Requirements (as defined below):

 

25.1.1                       at all times comply with all applicable laws, statutes, regulations and codes relating to anti-bribery and anti-corruption, including the Bribery Act 2010 (“Relevant Requirements”);

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

43

 

25.1.2                       not do anything which if done in the UK would constitute an offence under sections 1, 2 or 6 of the Bribery Act 2010 (respectively, bribing another person, being bribed and bribing a foreign public official);

 

25.1.3                       have and shall maintain in place throughout the Term its own policies and procedures to ensure compliance with the Relevant Requirements, and Clause 25.1.2, and will enforce them where appropriate;

 

25.1.4                       promptly report to the other Party any request or demand for any undue financial or other advantage of any kind received in connection with the performance of this Agreement;

 

25.1.5                       immediately notify the other Party in writing if a foreign public official becomes an officer or employee of the notifying Party or acquires a direct or indirect interest in the notifying Party.

 

25.2                                 Each Party shall be solely responsible for the observance and performance of the Relevant Requirements by each of its Affiliates, and in the case of Corvus by each Sublicensee, and shall be directly liable to the other Party for any breach by its Affiliates, and in the case of Corvus any breach by any Sublicensee, of any of the Relevant Requirements.  Notwithstanding the foregoing, each Affiliate and Sublicensee shall be required to comply with the Relevant Requirements to the extent applicable to their respective performance of activities under this Agreement, including the place of such performance, and/or if required by the Relevant Requirements.

 

25.3                                 For the purpose of this Clause 25, the meaning of foreign public official shall be determined in accordance with the Bribery Act 2010 (and any guidance issued under section 9 of that Act).

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

44

 

In witness whereof the Parties have executed this Agreement as of the Commencement Date.

 

	
Signed by
    	
 
    
	
 
    	
 
    
	
Title   CEO
    	
 
    
	
 
    	
 
    
	
Date   25 February 2015
    	
 
    
	
 
    	
 
    
	
For   and on behalf of Vernalis (R&D)   Limited
    	
/s/   Ian Garland
    
	
 
    	
 
    
	
Signed by Richard Miller
    	
 
    
	
 
    	
 
    
	
Title   CEO
    	
 
    
	
 
    	
 
    
	
Date   Feb 25, 2015
    	
 
    
	
 
    	
 
    
	
For   and on behalf of Corvus   Pharmaceuticals, Inc.
    	
/s/Richard   Miller
    

 

Signature Page

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

 

Schedule 1
 Vernalis Patent Rights

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

46

 

Part A: Adeno VII Patent Rights

 

[***]

 

Part B: Non-Adeno VII Patent Rights

 

“[***]” patent family

 

[***]

 

“[***]” patent family

 

[***]

 

“[***]” patent family

 

[***]

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

47

 

Schedule 2
 In-process and completed V81444 GMP and non GMP material, Vernalis Licensed
 Compounds and intermediates

 

[***]

 

Specification 1

 

[***]

 

Specification 2

 

[***]

 

Specification 3

 

[***]

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

48

 

Schedule 3
 Vernalis Bank Details

 

	
Account No
    	
[***]
    
	
 
    	
 
    
	
Sort Code
    	
[***]
    
	
 
    	
 
    
	
Currency
    	
[***]
    
	
 
    	
 
    
	
Account Name
    	
[***]
    
	
 
    	
 
    
	
SWIFTBIC
    	
[***]
    
	
 
    	
 
    
	
IBAN
    	
[***]
    
	
 
    	
 
    
	
Bank Name and Address
    	
[***],
    
	
 
    	
 
    
	
 
    	
[***],
    
	
 
    	
 
    
	
 
    	
[***],
    
	
 
    	
 
    
	
 
    	
[***],
    
	
 
    	
 
    
	
 
    	
[***],
    
	
 
    	
 
    
	
 
    	
[***],
    
	
 
    	
 
    
	
 
    	
[***]
    

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

49

 

Schedule 4
 Agreed Press Release

 

[DATE]

 

LSE: VER

 

Vernalis licenses proprietary adenosine receptor antagonist technology, including
 lead compound V81444, for, development and commercialisation

 

Vernalis plc today announces that it has licensed exclusive, worldwide rights in its adenosine receptor antagonist programme, including the lead drug candidate, V81444, for use in all therapeutic applications to a well-funded, US-based biotechnology company.  The transaction includes a $1 million upfront payment and has the potential for Vernalis to earn over $200 million subject to development, regulatory and sales milestones being achieved.  In addition there are single digit royalties payable if a product reaches the market, with the potential to reach double digit royalties in certain circumstances.

 

The licensing party is a private US company, that has raised a large Series A round with leading venture capital investors, and brings a management team with a wealth of clinical and commercial expertise and experience to this programme.

 

V81444 is a patented molecule that has been evaluated in phase I and II clinical trials under an IND in the US.  Its initial development was focused on ADHD and other neurological diseases.

 

Commenting on the new relationship, Ian Garland, CEO of Vernalis said “We are delighted to have secured an ideal partner for V81444 and our adenosine receptor antagonist programme and look forward to the development of V81444 and this interesting class of compounds for the potential benefit of patients worldwide.”

 

— ends —

 

Enquiries:

 

	
Vernalis plc:
    	
 
    
	
Ian Garland, Chief Executive Officer
    	
+44 (0) 118 938 0015
    
	
David Mackney, Chief Financial Officer 
    	
 
    
	
 
    	
 
    
	
Canaccord Genuity Limited   (Nominated Adviser):
    	
+44 (0) 20 7523 8350
    
	
Dr Julian Feneley
    	
 
    
	
Henry Fitzgerald-O’Connor
    	
 
    
	
Pippa Underwood 
    	
 
    
	
 
    	
 
    
	
Shore Capital (Joint Broker):
    	
+44   (0)20 7408 4090
    
	
Bidhi Bhoma
    	
 
    
	
Toby Gibbs
    	
 
    

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

50

 

	
Brunswick Group: 
    	
+44 (0) 20 7404 5959
    
	
Jon Coles
    	
 
    

 

Notes to Editors

 

About Vernalis

 

Vernalis is a revenue generating development stage pharmaceutical company with significant expertise in drug development.  The Group has one marketed product, frovatriptan for the acute treatment of migraine, an exclusive licensing agreement to develop and commercialise multiple novel products focussed on the US prescription cough cold market as well as seven programmes in its NCE development pipeline.  Vernalis has also significant expertise in fragment and structure based drug discovery which it leverages to enter into collaborations with larger pharmaceutical companies.  The Company’s technologies, capabilities and products have been endorsed over the last five years by collaborations with leading pharmaceutical companies, including AKP, Biogen Idec, Endo, GSK, Genentech, Lundbeck, Menarini, Novartis, Servier and Tris.

 

For further information about Vernalis, please visit www.vernalis.com.

 

Vernalis Forward-Looking Statement

 

This news release may contain forward-looking statements that reflect the Company’s current expectations regarding future events including the clinical development and regulatory clearance of the Company’s products, the Company’s ability to find partners for the development and commercialisation of its products, as well as the Company’s future capital raising activities. Forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including the success of the Company’s research strategies, the applicability of the discoveries made therein, the successful and timely completion of clinical studies, the uncertainties related to the regulatory process, the ability of the Company to identify and agree beneficial terms with suitable partners for the commercialisation and/or development of its products, as well as the achievement of expected synergies from such transactions, the acceptance of frovatriptan and other products by consumers and medical professionals, the successful integration of completed mergers and acquisitions and achievement of expected synergies from such transactions, and the ability of the Company to identify and consummate suitable strategic and business combination transactions.

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

51

 

Schedule 5
 [***]

 

[***]

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

52

 

Schedule 6
 V81444

 

[***]

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

53

 

Schedule 7
 Corvus Pre-Clinical Research Plan

 

The overall goal of the research team for the V81444 (A2a receptor antagonist) program is to [***].

 

·                  [***]

·                  [***]:

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

·                  [***]

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

54

 

Schedule 8
 Corvus Clinical Plan

 

Phase Ib Trial

 

[***].

 

[***].

 

[***].

 

[***].

 

Phase II Trial

 

[***].

 

[***].

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

55

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