Document:

Exhibit 10.2

 

SORRENTO THERAPEUTICS, INC.

2019 STOCK INCENTIVE PLAN

 

 

PLAN DOCUMENT

 

 

1.            Establishment,
Purpose, and Types of Awards

 

Sorrento Therapeutics, Inc. (the
 “Company”) hereby establishes this equity-based incentive compensation plan to be known as the
 “Sorrento Therapeutics, Inc. 2019 Stock Incentive Plan” (hereinafter referred to as the
 “Plan”) in order to provide incentives and awards to select employees, directors, consultants, and
advisors of the Company and its Affiliates. Upon approval by the Company’s stockholders of the Plan, the Company shall
no longer issue new awards under its Amended and Restated 2009 Stock Incentive Plan (the “Original
Plan”). In the event that the Company’s stockholders do not approve the Plan, the Original Plan will
continue in full force and effect.

 

(a)          Awards.
The Plan permits grants of the following types of awards (“Awards”), according to the Sections of the
Plan listed here:

 

Section 6            Options

Section 7            Share Appreciation Rights

Section 8            Restricted Shares, Restricted Share Units,
Unrestricted Shares and Dividend Equivalents

Section 9            Performance
Awards

 

(b)          Effect
on Other Plans. The Plan is not intended to affect and shall not affect any stock options, equity-based compensation or other
benefits that the Company or its Affiliates may have provided pursuant to any agreement, plan, or program that is independent of
this Plan.

 

2.            Defined
Terms

 

Terms in the Plan that begin with an initial capital letter
have the defined meaning set forth in Appendix A, unless defined elsewhere in this Plan or the context of their
use clearly indicates a different meaning.

 

3.            Shares
Subject to the Plan

 

Subject to the provisions of Section 12:

 

(a)          The
maximum number of Shares that the Company may issue for all Awards is 22,500,000 Shares.

 

(b)          For
all Awards, the Shares issued pursuant to the Plan may be authorized but unissued Shares, or Shares that the Company has reacquired
or otherwise holds in treasury. Shares that are subject to an Award under this Plan that for any reason expire, are forfeited,
are cancelled, become unexercisable, or are settled for cash (in whole or in part), and Shares that are for any other reason not
paid or delivered under the Plan shall again, except to the extent prohibited by Applicable Law, be available for subsequent Awards
under this Plan. In addition, the Committee may make future Awards with respect to Shares that the Company retains from otherwise
delivering pursuant to an Award under this Plan either (i) as payment of the exercise or purchase price of an Award, or (ii) in
order to satisfy the withholding or employment taxes due upon grant, exercise, vesting or distribution of an Award. Any Shares
forfeited by the Participant or repurchased by the Company under Section 8(b) at a price not greater than the price originally
paid by the Participant so that such Shares are returned to the Company will again be available for Awards under the Plan. 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(b), no Shares may again be optioned, granted
or awarded if such action would cause an Incentive Share Option to fail to qualify as an incentive stock option under Section 422
of the Code.

 

    	 	 	 

    	 	 	 

    

 

(c)          Notwithstanding
the foregoing, but subject to adjustments pursuant to Section 12, the number of Shares that are available for ISO Awards shall
be determined, to the extent required under applicable tax laws, by reducing the number of Shares designated in Section 3(a) by
the number of Shares issued pursuant to Awards, provided that any Shares that are either issued or purchased under the Plan
and forfeited back to the Plan, or surrendered in payment of the exercise price for an Award, shall be available for issuance pursuant
to future ISO Awards.

 

(d)          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 with which the Company combines has shares available under a pre-existing plan approved by 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 employed by or providing services to the acquired company immediately prior to such acquisition or combination.

 

4.            Administration

 

(a)          General.
The Committee shall administer the Plan in accordance with its terms. 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 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.
To the extent necessary to comply with Rule 16b-3 of the Exchange Act, the Committee (or another committee or subcommittee
of the Board assuming the functions of the Committee under the Plan) shall take all action with respect to such Awards, and the
individuals taking such action shall consist solely of two or more non-employee 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. Additionally, to the extent required by Applicable Law, each of the individuals constituting
the Committee (or another committee or subcommittee of the Board assuming the functions of the Committee under the Plan) shall
be an “independent director” under the rules of any securities exchange or automated quotation system on which
the Shares are listed, quoted or traded. Notwithstanding the foregoing, 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 4 or otherwise provided in any charter of the Committee. The Committee shall hold
meetings at such times and places as it may determine, and shall make such rules and regulations for the conduct of its business
as it deems advisable.

 

(b)          Committee
Composition. The Board shall appoint the members of the Committee. If, and to the extent permitted by Applicable Law, the Committee
may authorize one or more Reporting Persons (or other officers) to make Awards to Eligible Persons who are not Reporting Persons
(or other officers whom the Committee has specifically authorized to make Awards). The Board may at any time appoint additional
members to the Committee, remove and replace members of the Committee with or without Cause, and fill vacancies on the Committee
however caused.

 

(c)          Powers
of the Committee. Subject to the provisions of the Plan, the Committee shall have the authority, in its sole discretion:

 

(i)          to
determine Eligible Persons to whom Awards shall be granted from time to time, and the number of Shares, units, or SARs to be covered
by each Award;

 

(ii)         to
determine, from time to time, the Fair Market Value of Shares;

 

(iii)        to
determine, and to set forth in Award Agreements, the terms and conditions of all Awards, including any applicable exercise or purchase
price, the installments and conditions under which an Award shall become vested (which may be based on performance), terminated,
expired, cancelled, or replaced, and the circumstances for vesting acceleration or waiver of forfeiture restrictions, and other
restrictions and limitations;

 

    	 	PAGE 2	 

     

    

 

(iv)         to
approve the forms of Award Agreements, and all other documents, notices and certificates in connection therewith, which need not
be identical either as to type of Award or among Participants;

 

(v)          to
construe and interpret the terms of the Plan and any Award Agreement, to determine the meaning of their terms, and to prescribe,
amend, and rescind rules and procedures relating to the Plan and its administration;

 

(vi)         to
the extent consistent with the purposes of the Plan, and without amending the Plan, to modify, cancel, or waive the Company’s
rights with respect to any Awards, to adjust or to modify Award Agreements for changes in Applicable Law, and to recognize differences
in foreign law, tax policies, or customs;

 

(vii)        to
implement paperless documentation, granting, settlement, or exercise of Awards by a Participant may be permitted through the use
of such an automated system, in all cases, in the event that the Company establishes for itself, or uses, the services of a third
party to establish an automated system for the documentation, granting, settlement, or exercise of Awards, such as a system using
an internet website or interactive voice response; and

 

(viii)       to
make all other interpretations, and to take all other actions that the Committee may consider necessary or advisable to administer
the Plan, or to effectuate its purposes.

 

Subject to Applicable Law and the restrictions set forth in
the Plan, the Committee may delegate administrative functions to individuals who are Reporting Persons, officers, or Employees
of the Company or its Affiliates.

 

(d)          Action
by 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 an officer or other employee of the Company or any Affiliate thereof, the Company’s independent
certified public accounts, or any executive compensation consultant or other professional retained by the Company to assist in
the administration of the Plan.

 

(e)          Deference
to Committee Determinations. The Committee shall have the discretion to interpret or construe ambiguous, unclear, or implied
(but omitted) terms in any fashion it deems to be appropriate in its sole discretion, and to make any findings of fact needed in
the administration of the Plan or Award Agreements. The Committee’s prior exercise of its discretionary authority shall not
obligate it to exercise its authority in a like fashion thereafter. The Committee’s interpretation and construction of any
provision of the Plan, or of any Award or Award Agreement, shall be final, binding, and conclusive. The validity of any such interpretation,
construction, decision or finding of fact shall not be given de novo review if challenged in court, by arbitration, or in any other
forum, and shall be upheld unless clearly made in bad faith or materially affected by fraud. The Committee may make any determination
required hereunder, including determinations under Section 12, on an Award-by-Award basis.

 

(f)          No
Liability; Indemnification. Neither the Board nor any Committee member, nor any Person acting at the direction of the Board
or the Committee, shall be liable for any act, omission, interpretation, construction or determination made in good faith with
respect to the Plan, any Award or any Award Agreement. The Company and its Affiliates shall pay or reimburse any member of the
Committee, as well as any Director, Employee, or Consultant who takes action in connection with the Plan, for all expenses incurred
with respect to the Plan, and, to the fullest extent allowable under Applicable Law, shall indemnify each and every one of them
for any claims, liabilities, and costs (including reasonable attorneys’ fees) arising out of their good faith performance
of duties under the Plan. The Company and its Affiliates may obtain liability insurance for this purpose.

 

5.            Eligibility

 

(a)          General
Rule. The Committee may grant ISOs only to Employees (including officers who are Employees) of the Company, or an Affiliate
that is a “parent corporation” or “subsidiary corporation” within the meaning of Section 424 of the
Code, and may grant all other Awards to any Eligible Person. A Participant who has been granted an Award may be granted an additional
Award or Awards if the Committee shall so determine, if such person is otherwise an Eligible Person and, if otherwise, in accordance
with the terms of the Plan.

 

    	 	PAGE 3	 

     

    

 

(b)          Grant
of Awards. Subject to the express provisions of the Plan, the Committee shall determine from the class of Eligible Persons
those individuals to whom Awards under the Plan may be granted, the number of Shares subject to each Award, and the price (if any)
to be paid for the Shares or the Award and, in the case of Performance Awards, in addition to the matters addressed in Section 9,
the specific objectives, goals and performance criteria that further define the Performance Award. Each Award shall be evidenced
by an Award Agreement signed by the Company and, if required by the Committee, by the Participant. The Award Agreement shall set
forth the material terms and conditions of the Award established by the Committee, and each Award shall be subject to the terms
and conditions set forth in Sections 22, 23, and 25 unless otherwise specifically provided in an Award Agreement. All Awards granted
pursuant to the Plan shall have a minimum vesting period of one year from the date of grant.

 

(c)          Limits
on Awards. Notwithstanding any provision in the Plan to the contrary, and subject to Section 12(a): (i) the maximum
aggregate number of Shares with respect to one or more Awards that may be granted to any one person other than a Non-Employee Director
during any calendar year shall be 4,000,000; (ii) the maximum aggregate number of Shares, with respect to one or more
Awards that may be granted to any Non-Employee Director during any calendar year, shall be 250,000; and (iii) no Participant
may be granted, during any calendar year, Awards initially payable in cash that could result in such Participant receiving cash
payments exceeding $5,000,000 pursuant to such Awards. The Committee will adjust these limitations pursuant to Section 12
below.

 

(d)          Replacement
Awards. Subject to Applicable Laws (including any associated stockholder approval requirements), the Committee may, in its
sole discretion and upon such terms as it deems appropriate, require as a condition of the grant of an Award to a Participant that
the Participant surrender for cancellation some or all of the Awards that have previously been granted to the Participant under
this Plan or otherwise. An Award that is conditioned upon such surrender may or may not be the same type of Award, may cover the
same (or a lesser or greater) number of Shares as such surrendered Award, may have other terms that are determined without regard
to the terms or conditions of such surrendered Award, and may contain any other terms that the Committee deems appropriate. In
the case of Options, these other terms may not include an exercise price that is lower than the exercise price of the surrendered
Option unless the Company’s stockholders approve the Option grant itself or the program under which the Option grant is made
pursuant to the Plan.

 

6.            Option
Awards

 

(a)          Types;
Documentation. Subject to Section 5(a), the Committee may in its discretion grant Options pursuant to Award Agreements
that are delivered to Participants. Each Option shall be designated in the Award Agreement as an ISO or a Non-ISO, and the same
Award Agreement may grant both types of Options. At the sole discretion of the Committee, any Option may be exercisable, in whole
or in part, immediately upon the grant thereof, or only after the occurrence of a specified event, or only in installments, which
installments may vary. Options granted under the Plan may contain such terms and provisions not inconsistent with the Plan that
the Committee shall deem advisable in its sole and absolute discretion.

 

(b)          ISO
Limitations. No ISO shall be granted to any person who is not an Employee of the Company or any “subsidiary corporation”
of the Company, within the meaning of Section 424 of the Code. No person who qualifies as a Ten Percent Holder may be granted
an ISO unless such ISO conforms to the applicable provisions of Section 422 of the Code. Any ISO granted under the Plan may
be modified by the Committee, with the consent of the Participant, 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 Shares with respect
to which Options designated as ISOs first become exercisable by a Participant in any calendar year (under this Plan and any other
plan of the Company or any Affiliate) exceeds $100,000, such excess Options shall automatically be treated as Non-ISOs. For purposes
of determining whether the $100,000 limit is exceeded, the Fair Market Value of the Shares subject to an ISO shall be determined
as of the Grant Date. In reducing the number of Options treated as ISOs to meet the $100,000 limit, the most recently granted Options
shall be reduced first. In the event that Section 422 of the Code is amended to alter the limitation set forth therein, the
limitation of this Section 6(b) shall be automatically adjusted accordingly.

 

(c)          Term
of Option. Each Award Agreement shall specify a term at the end of which the Option automatically expires, subject to earlier
termination provisions contained in Section 6(h); provided that the term of any Option may not exceed ten years from
the Grant Date. In the case of an ISO granted to an Employee who is a Ten Percent Holder on the Grant Date, the term of the ISO
shall not exceed five years from the Grant Date.

 

    	 	PAGE 4	 

     

    

 

(d)          Exercise
Price. The exercise price of an Option shall be determined by the Committee in its sole discretion and shall be set forth in
the Award Agreement, provided that:

 

(i)           if
an ISO is granted to an Employee who on the Grant Date is a Ten Percent Holder, the per Share exercise price shall not be less
than 110% of the Fair Market Value per Share on the Grant Date (or the date the Option is modified, extended or renewed for
purposes of Section 424(h) of the Code); and

 

(ii)          for
all other Options, such per Share exercise price shall not be less than 100% of the Fair Market Value per Share on the Grant
Date (or, as to ISOs, on the date the Option is modified, extended or renewed for purposes of Section 424(h) of the Code).

 

Neither the Company nor the Committee shall, without stockholder
approval, allow for a repricing of Options within the meaning of the federal securities laws applicable to proxy statement disclosures.

 

(e)          Exercise
of Option. The times, circumstances and conditions under which an Option shall be exercisable shall be determined by the Committee
in its sole discretion and set forth in the Award Agreement. The Committee shall have the discretion to determine whether and to
what extent the vesting of Options shall be tolled during any unpaid leave of absence; provided, however, that, in
the absence of such determination, vesting of Options shall be tolled during any such leave approved by the Company. Except as
limited by the Plan, at any time after the grant of an Option, the Committee, in its sole discretion, and subject to whatever terms
and conditions it selects, may accelerate the period during which an Option vests.

 

(f)          Minimum
Exercise Requirements. An Option may not be exercised for a fraction of a Share. The Committee may require in an Award Agreement
that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent a Participant
from purchasing the full number of Shares as to which the Option is then exercisable.

 

(g)          Methods
of Exercise. Prior to its expiration pursuant to the terms of the applicable Award Agreement, and subject to the times, circumstances
and conditions for exercise contained in the applicable Award Agreement, each Option may be exercised, in whole or in part (provided
that the Company shall not be required to issue fractional shares), by delivery of written notice of exercise to the secretary
of the Company accompanied by payment of the full exercise price of the Shares being purchased. The Committee shall determine the
acceptable methods of payment for exercise of the Option on the Grant Date, and such methods shall be specified in the applicable
Award Agreement. The methods of payment that the Committee may, in its discretion, accept or commit to accept in an Option Award
Agreement include:

 

(i)           cash
or check payable to the Company (in U.S. dollars);

 

(ii)          the
Participant’s surrender of a number of Shares that are subject to the Option being exercised, and that have a Fair Market
Value equal to the exercise price and minimum taxes payable (at statutory rates) upon exercise, with any additional amount that
the Participant owes being paid in cash or by check payable to the Company (in U.S. dollars);

 

(iii)         other
Shares that (A) are owned by the Participant who is purchasing Shares pursuant to an Option, (B) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option is being exercised, (C) were
not acquired by such Participant pursuant to the exercise of an Option, unless such Shares have been owned by such Participant
for at least six months or such longer period as the Committee may determine, (D) are all, at the time of such surrender,
free and clear of any and all claims, pledges, liens and encumbrances, or any restrictions which would in any manner restrict the
transfer of such shares to or by the Company (other than such restrictions as may have existed prior to an issuance of such Shares
by the Company to such Participant), and (E) are duly endorsed for transfer to the Company;

 

    	 	PAGE 5	 

     

    

 

(iv)         a
cashless exercise program that the Committee may approve, from time to time in its discretion, pursuant to which a Participant
may concurrently provide irrevocable instructions (A) to such Participant’s broker or dealer to effect the immediate
sale of the purchased Shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds
to cover the exercise price of the Option plus all applicable taxes required to be withheld by the Company by reason of such exercise,
and (B) to the Company to deliver the certificates for the purchased Shares directly to such broker or dealer in order to
complete the sale;

 

(v)          any
combination of the foregoing methods of payment; or

 

(vi)         any
other form of legal consideration acceptable to the Committee in its sole discretion.

 

The Company shall not be required to deliver Shares pursuant
to the exercise of an Option until payment of the full exercise price therefore is received by the Company.

 

(h)          Termination
of Continuous Service. The Committee may establish and set forth in the applicable Award Agreement the terms and conditions
on which an Option shall remain exercisable, if at all, following termination of a Participant’s Continuous Service. Except
as limited by the requirements of Section 409A or Section 422 of the Code and regulations and rulings thereunder, the
Committee may waive or modify these provisions at any time. To the extent that a Participant is not entitled to exercise an Option
at the date of his or her termination of Continuous Service, or if the Participant (or other person entitled to exercise the Option)
does not exercise the Option to the extent so entitled within the time specified in the Award Agreement or below (as applicable),
the Option shall terminate and the Shares underlying the unexercised portion of the Option shall revert to the Plan and become
available for future Awards. Notwithstanding any other provision in this Plan, in no event may any Option be exercised after the
expiration of the Option term as set forth in the Award Agreement.

 

The following provisions shall apply to the extent an Award
Agreement does not specify the terms and conditions upon which an Option shall terminate when there is a termination of a Participant’s
Continuous Service:

 

(i)           Termination
other than Upon Disability or Death or for Cause. In the event of termination of a Participant’s Continuous Service (other
than as a result of Participant’s death, Disability or termination for Cause), the Participant shall have the right to exercise
an Option at any time within 3 months following such termination to the extent the Participant was entitled to exercise such
Option at the date of such termination.

 

(ii)          Disability.
In the event of termination of a Participant’s Continuous Service as a result of his or her being Disabled, the Participant
shall have the right to exercise an Option at any time within one year following such termination to the extent the Participant
was entitled to exercise such Option at the date of such termination.

 

(iii)         Death.
In the event of the death of a Participant either during the period of Continuous Service since the Grant Date of an Option, or
within 30 days following termination of the Participant’s Continuous Service for any reason other than due to Cause,
the Option may be exercised, at any time within one year following the date of the Participant’s death, by the Participant’s
estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent the right
to exercise the Option had vested as of the earlier to occur of the date of the Participant’s death or the date the Participant’s
Continuous Service terminated.

 

(iv)         Cause.
If the Committee determines that a Participant’s Continuous Service terminated due to Cause, the Participant shall immediately
forfeit the right to exercise any Option, and any such Option shall be considered immediately null and void.

 

    	 	PAGE 6	 

     

    

 

7.            Share
Appreciation Rights (SARs)

 

(a)          Grants.
The Committee may, in its discretion, grant Share Appreciation Rights to any Eligible Person pursuant to Award Agreements, in any
of the following forms:

 

(i)           SARs
Related to Options. The Committee may grant SARs either concurrently with the grant of an Option or with respect to an outstanding
Option, in which case the SAR shall extend to all or a portion of the Shares covered by the related Option. An SAR shall entitle
the Participant who holds the related Option, upon exercise of the SAR and surrender of the related Option, or portion thereof,
to the extent the SAR and related Option each were previously unexercised, to receive payment of an amount determined pursuant
to Sections 7(e) and 7(f). Any SAR granted in connection with an ISO will contain such terms as may be required
to comply with the provisions of Section 422 of the Code and the regulations promulgated thereunder.

 

(ii)          SARs
Independent of Options. The Committee may grant SARs that are independent of any Option subject to such conditions as the Committee
may in its discretion determine, which conditions will be set forth in the applicable Award Agreement.

 

(iii)         Limited
SARs. The Committee may grant SARs exercisable only upon, or in respect of, a Change in Control or any other specified event,
and such limited SARs may relate to or operate in tandem or combination with or substitution for Options or other SARs, or on a
stand-alone basis, and may be payable in cash or Shares based on the spread between the exercise price of the SAR, and (A) a
price based upon, or equal to, the Fair Market Value of the Shares during a specified period, at a specified time within a specified
period before, after or including the date of such event, or (B) a price related to consideration payable to Company’s
stockholders generally in connection with the event.

 

(b)          Exercise
Price. The per Share exercise price of an SAR shall be determined in the sole discretion of the Committee, shall be set forth
in the applicable Award Agreement, and shall be no less than 100% of the Fair Market Value of one Share on the date the SAR
is granted. The exercise price of an SAR related to an Option shall be the same as the exercise price of the related Option. Neither
the Company nor the Committee shall, without stockholder approval, allow for a repricing of any SAR within the meaning of federal
securities laws applicable to proxy statement disclosures.

 

(c)          Exercise
of SARs. Unless the Award Agreement otherwise provides, an SAR related to an Option will be exercisable at such time or times,
and to the extent, that the related Option will be exercisable; provided that the Award Agreement shall not, without the
approval of the stockholders of the Company, provide for a vesting period for the exercise of the SAR that is more favorable to
the Participant than the exercise period for the related Option. An SAR may not have a term exceeding ten years from its Grant
Date. An SAR granted independently of any other Award will be exercisable pursuant to the terms of the Award Agreement. Whether
an SAR is related to an Option or is granted independently, the SAR may only be exercised when the Fair Market Value of the Shares
underlying the SAR exceeds the exercise price of the SAR. Except as limited by the Plan, at any time after the grant of an SAR,
the Committee, in its sole discretion, and subject to whatever terms and conditions it selects, may accelerate the period during
which an SAR vests.

 

(d)          Effect
on Available Shares. All SARs that are settled in shares of the Company’s stock shall be counted in full against the
number of shares available for award under the Plan, regardless of the number of shares actually issued upon settlement of the
SARs.

 

(e)          Payment.
Upon exercise of an SAR related to an Option and the attendant surrender of an exercisable portion of any related Award, the Participant
will be entitled to receive payment of an amount determined by multiplying:

 

(i)           the
excess of the Fair Market Value of a Share on the date of exercise of the SAR over the exercise price per Share of the SAR, by

 

(ii)          the
number of Shares with respect to which the SAR has been exercised.

 

Notwithstanding the foregoing, an SAR granted independently
of an Option (i) may limit the amount payable to the Participant to a percentage specified in the Award Agreement, and (ii) shall
be subject to any payment or other restrictions that the Committee may, at any time, impose in its discretion, including restrictions
intended to conform the SARs with Section 409A of the Code.

 

    	 	PAGE 7	 

     

    

 

(f)          Form and
Terms of Payment. Subject to Applicable Law, the Committee may, in its sole discretion, settle the amount determined
under Section 7(e) solely in cash, solely in Shares (valued at their Fair Market Value on the date of exercise of the
SAR), or partly in cash and partly in Shares, with cash paid in lieu of fractional shares.

 

(g)          Termination
of Employment or Consulting Relationship. The Committee shall establish, and set forth in the applicable Award Agreement,
the terms and conditions on which an SAR shall remain exercisable, if at all, following termination of a Participant’s Continuous
Service. The provisions of Section 6(h) shall apply to the extent an Award Agreement does not specify the terms and conditions
upon which an SAR shall terminate when a Participant’s Continuous Service terminates.

 

8.            Restricted
Shares, Restricted Share Units, Unrestricted Shares and Dividend Equivalents

 

(a)          Grants.
The Committee may, in its sole discretion, grant restricted shares (“Restricted Shares”) to any Eligible
Person and shall evidence such grant in an Award Agreement that is delivered to the Participant and that sets forth the number
of Restricted Shares, the purchase price for such Restricted Shares (if any), and the terms upon which the Restricted Shares may
become vested. In addition, the Company may, in its discretion, grant to any Eligible Person the right to receive Shares after
certain vesting requirements are met (“Restricted Share Units”), and shall evidence such grant in an
Award Agreement that is delivered to the Participant and that sets forth the number of Shares (or formula, that may be based on
future performance or conditions, for determining the number of Shares) that the Participant shall be entitled to receive upon
vesting and the terms upon which the Shares subject to a Restricted Share Unit may become vested. The Committee may condition any
Award of Restricted Shares or Restricted Share Units to a Participant on receiving from the Participant such further assurances
and documents as the Committee may require to enforce the restrictions. In addition, the Committee may grant Awards hereunder in
the form of unrestricted shares (“Unrestricted Shares”), which shall vest in full upon the date of grant
or such other date as the Committee may determine or which the Committee may issue pursuant to any program under which one or more
Eligible Persons (selected by the Committee in its sole discretion) elect to pay for such Shares or to receive Unrestricted Shares
in lieu of cash bonuses that would otherwise be paid.

 

(b)          Vesting
and Forfeiture. The Committee shall set forth in an Award Agreement granting Restricted Shares or Restricted Share Units, the
terms and conditions under which the Participant’s interest in the Restricted Shares or the Shares subject to Restricted
Share Units will become vested and non-forfeitable. Except as set forth in the applicable Award Agreement or the Committee otherwise
determines, upon termination of a Participant’s Continuous Service for any reason, the Participant shall forfeit his or her
Restricted Shares and Restricted Share Units; provided that if a Participant purchases the Restricted Shares and forfeits
them for any reason, the Company shall return the purchase price to the Participant only if and to the extent set forth in an Award
Agreement.

 

(c)          Issuance
of Restricted Shares Prior to Vesting. The Company shall issue stock certificates that evidence Restricted Shares pending the
lapse of applicable restrictions, and that bear a legend making appropriate reference to such restrictions. Except as set forth
in the applicable Award Agreement or as the Committee otherwise determines, the Company or a third party that the Company designates
shall hold such Restricted Shares and any dividends that accrue with respect to Restricted Shares pursuant to Section 8(e) below.

 

(d)          Issuance
of Shares upon Vesting. As soon as practicable after vesting of a Participant’s Restricted Shares (or Shares underlying
Restricted Share Units) and the Participant’s satisfaction of applicable tax withholding requirements, the Company shall
release to the Participant, free from the vesting restrictions, one Share for each vested Restricted Share (or issue one Share
free of the vesting restriction for each vested Restricted Share Unit), unless an Award Agreement provides otherwise. No fractional
shares shall be distributed, and cash shall be paid in lieu thereof.

 

(e)          Rights
as a Stockholder. Unless otherwise provided in an Award Agreement, and subject to Section 8(b), upon issuance of Restricted
Shares, the Participant shall have, unless otherwise provided by the Committee, all the rights of a stockholder with respect to
said Shares, including the right to vote the Shares; provided, however, that in no event shall a Participant holding Restricted
Shares be entitled to receive dividends, payments or other distributions paid with respect to Restricted Shares prior to the time
the Restricted Shares. In addition, with respect to a Restricted Share with performance-based vesting, dividends which are paid
prior to vesting shall only be paid out to the Participant to the extent that the performance-based vesting conditions are subsequently
satisfied and the Restricted Share vests.

 

    	 	PAGE 8	 

     

    

 

(f)          Section 83(b) Elections.
A Participant may make an election under Section 83(b) of the Code (the “Section 83(b) Election”)
with respect to Restricted Shares.

 

(g)          Dividend
Equivalents. Dividend Equivalents may be granted by the Committee based on dividends declared on Shares, during the period
between the date an Award is granted to a Participant and the date such Award vests, is exercised, is distributed or expires, as
determined by the Committee. 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 Committee. In addition, Dividend Equivalents with respect to an
Award with performance-based vesting that are based on dividends paid prior to the vesting of such Award shall only be paid out
to the Participant to the extent that the performance-based vesting conditions are subsequently satisfied and the Award vests.
Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or Share appreciation rights.

 

9.            Performance
Awards

 

(a)          Performance
Awards. The Committee is authorized to grant Performance Awards, including Performance Unit awards, determined in the Committee’s
discretion from time to time, to any Eligible Person. The value of Performance Awards, including Performance Units and any cash
awards, may be linked to any one or more of the Performance Measures or other specific criteria determined by the Committee, in
each case, on a specified date or dates or over any period or periods determined by the Committee. Performance Awards, including
Performance Unit awards, may be paid in cash, Shares, or a combination of cash and Shares, as determined by the Committee. Subject
to the limitations set forth in Section 5(c), the Committee may, in its discretion, grant Performance Awards to any Eligible
Person and shall evidence such grant in an Award Agreement that is delivered to the Participant which sets forth the terms and
conditions of the Award. With respect to each such Performance Award, the Committee shall establish, in writing, a “Performance
Period,” “Performance Goal(s)” based on the “Performance Measure(s),” and “Performance Formula(e)”
(each such term being hereinafter defined).

 

A Participant shall be eligible to receive payment in respect
of a Performance Award only to the extent that the Performance Goal(s) for such Award is achieved and the Performance Formula(e),
as applied against such Performance Goal(s), determines that all or some portion of such Participant’s Award has been earned
for the Performance Period. As soon as practicable after the close of each Performance Period, the Committee shall review and certify
in writing whether, and to what extent, the Performance Goal(s) for the Performance Period have been achieved and, if so,
determine and certify in writing the amount of the Performance Award to be paid to the Participant and, in so doing, may use negative
discretion to decrease, but not increase, the amount of the Award otherwise payable to the Participant based upon such performance.

 

(b)          Definitions.

 

(i)           “Performance
Formula” means, for a Performance Period, one or more objective formulas or standards established by the Committee
for purposes of determining whether or the extent to which an Award has been earned based on the level of performance attained
or to be attained with respect to one or more Performance Goal(s). Performance Formulae may vary from Performance Period to Performance
Period and from Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.

 

(ii)          “Performance
Goals” means, for a Performance Period, one or more goals established in writing by the Committee for the Performance
Period based upon one or more Performance Measures. Unless otherwise determined by the Committee, the achievement of each Performance
Goal shall be determined, to the extent applicable, in accordance with generally accepted accounting principles as consistently
applied by the Company (or such other standard applied by the Committee).

 

    	 	PAGE 9	 

     

    

 

(iii)         “Performance
Measure” means one or more of the following selected by the Committee to measure Company, Affiliate, and/or business
unit performance for a Performance Period, whether in absolute or relative terms (including, without limitation, terms relative
to a peer group or index): net earnings (either before or after one or more of the following: (A) interest, (B) taxes,
(C) depreciation and (D) amortization); gross or net sales or revenue; net income (either before or after taxes); adjusted
net income; operating earnings or profit; cash flow (including, but not limited to, operating cash flow and free cash flow); return
on assets; return on capital or return on capital or invested capital; return on stockholders’ equity; total stockholder
return; return on sales; gross or net profit or operating margin; operating or other costs and expenses; improvements in expense
levels; working capital; earnings per share or adjusted earnings per share; price per Share; regulatory body approval for commercialization
of a product; implementation or completion of critical projects; market share; economic value; comparisons with various stock market
indices; stockholders’ equity; market recognition (including but not limited to awards and analyst ratings); financial ratios;
net promoter score; customer satisfaction; and strategic team goals. Performance Measures may vary from Performance Period to Performance
Period, and from Participant to Participant, and may be established on a stand-alone basis, in tandem or in the alternative.

 

The Committee 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
one or more of the following: items related to a change in accounting principle; items relating to financing activities; expenses
for restructuring or productivity initiatives; other non-operating items; items related to acquisitions; items attributable to
the business operations of any entity acquired by the Company during the Performance Period; items related to the disposal of a
business or segment of a business; items related to discontinued operations that do not qualify as a segment of a business under
generally accepted accounting principles as consistently applied by the Company (or such other standard applied by the Committee);
items attributable to any stock dividend, stock split, combination or exchange of stock occurring during the Performance Period;
any other items of significant income or expense which are determined to be appropriate adjustments; items relating to unusual
or extraordinary corporate transactions, events or developments, items related to amortization of acquired intangible assets; items
that are outside the scope of the Company’s core, on-going business activities; items related to acquired in-process research
and development; items relating to changes in tax laws; items relating to major licensing or partnership arrangements; items relating
to asset impairment charges; items relating to gains or losses for litigation, arbitration and contractual settlements; or items
relating to any other unusual or nonrecurring events or changes in Applicable Law, accounting principles or business conditions.

 

(iv)         “Performance
Period” means one or more periods of time (of not less than one fiscal year of the Company), as the Committee may
designate, over which the attainment of one or more Performance Goal(s) will be measured for the purpose of determining a
Participant’s rights in respect of an Award.

 

10.          Taxes

 

(a)          General.
As a condition to the issuance or distribution of Shares pursuant to the Plan, the Participant (or in the case of the Participant’s
death, the person who succeeds to the Participant’s rights) shall make such arrangements as the Company may require for the
satisfaction of any applicable federal, state, local or foreign withholding tax obligations that may arise in connection with the
Award and the issuance of Shares. The Company shall not be required to issue any Shares until such obligations are satisfied. If
the Committee allows the withholding or surrender of Shares to satisfy a Participant’s tax withholding obligations, the Committee
shall not allow Shares to be withheld in an amount that exceeds the minimum statutory withholding rates for federal and state tax
purposes, including payroll taxes.

 

(b)          Default
Rule for Employees. In the absence of any other arrangement, an Employee shall be deemed to have directed the Company
to withhold or collect, from his or her cash compensation, an amount sufficient to satisfy such tax obligations from the next payroll
payment otherwise payable after the date of the exercise of an Award.

 

(c)          Surrender
of Shares. If permitted by the Committee, in its discretion, a Participant may satisfy the minimum applicable tax withholding
and employment tax obligations associated with an Award by surrendering Shares to the Company (including Shares that would otherwise
be issued pursuant to the Award) that have a Fair Market Value, determined as of the applicable date, that the amount of tax to
be withheld is to be determined under the Applicable Law equal to the amount required to be withheld. In the case of Shares previously
acquired from the Company that are surrendered under this Section 10, such Shares must have been owned by the Participant
for more than six months on the date of surrender (or such longer period of time the Company may in its discretion require).

 

    	 	PAGE 10	 

     

    

 

(d)          Income
Taxes and Deferred Compensation. Participants are solely responsible and liable for the satisfaction of all taxes and penalties
that may arise in connection with Awards (including any taxes arising under Section 409A of the Code), and the Company shall
not have any obligation to indemnify or otherwise hold any Participant harmless from any or all of such taxes. The Committee shall
have the discretion to organize any deferral program, to require deferral election forms, and to grant or to unilaterally modify
any Award in a manner (i) that conforms with the requirements of Section 409A of the Code with respect to compensation
that is deferred and that vests after December 31, 2004, (ii) that voids any Participant election to the extent it would
violate Section 409A of the Code, and (iii) for any distribution election that would violate Section 409A of the
Code, to make distributions pursuant to the Award at the earliest to occur of a distribution event that is allowable under Section 409A
of the Code or any distribution event that is both allowable under Section 409A of the Code and is elected by the Participant,
subject to any valid second election to defer, provided that the Committee permits second elections to defer in accordance
with Section 409A(a)(4)(C) of the Code. The Committee shall have the sole discretion to interpret the requirements of
the Code, including Section 409A, for purposes of the Plan and all Awards.

 

11.          Non-Transferability
of Awards

 

(a)          General.
Except as set forth in this Section 11, or as otherwise approved by the Committee, Awards may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution, or in the
case of an option other than an ISO, pursuant to a domestic relations order as defined under Rule 16a-12 under the Exchange
Act. The designation of a beneficiary by a Participant will not constitute a transfer. An Award may be exercised, during the lifetime
of the holder of an Award, only by such holder, the duly-authorized legal representative of a Participant who is Disabled, a transferee
permitted by this Section 11, or except as would cause an ISO to lose such status, by a bankruptcy trustee.

 

(b)          Limited
Transferability Rights. Notwithstanding anything else in this Section 11, the Committee may in its discretion provide
in an Award Agreement that an Award relating to non-ISOs, SARs settled only in Shares, Restricted Shares, or Performance Shares
may be transferred, on such terms and conditions as the Committee deems appropriate, either (i) by instrument to the Participant’s
 “Immediate Family” (as defined below), (ii) by instrument to an inter vivos or testamentary trust
(or other entity) in which the Award is to be passed to the Participant’s designated beneficiaries, or (iii) by gift
to charitable institutions. Each share of restricted stock shall be non-transferable until such share becomes non-forfeitable.
Any transferee of the Participant’s rights shall succeed and be subject to all of the terms of the applicable Award Agreement
and the Plan (other than the ability to further transfer the award). Such transferee shall execute any and all documents requested
by the Committee, including, without limitation, documents to (i) confirm the status of the transferee as a permitted transferee,
(ii) satisfy any requirements for an exemption for the transfer under Applicable Law and (iii) evidence the transfer.
 “Immediate Family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and
shall include adoptive relationships.

 

12.          Adjustments
Upon Changes in Capitalization, Dissolution, Liquidation or a Change in Control

 

(a)          Changes
in Capitalization. The Committee shall equitably adjust the number of Shares covered by each outstanding Award, the maximum
number of Shares with respect to one or more Awards that may be granted to persons during any calendar year as set out in Section 5(c) and
the number of Shares that have been authorized for issuance under the Plan but as to which no Awards have yet been granted or that
have been returned to the Plan upon cancellation, forfeiture, or expiration of an Award, as well as the price per Share covered
by each such outstanding Award, to reflect any increase or decrease in the number of issued Shares resulting from a stock split,
reverse stock split, stock dividend, combination, recapitalization or reclassification of the Shares, or any other increase or
decrease in the number of issued Shares effected without receipt of consideration by the Company, in each case effected at any
time after this Plan is approved by the Board. In the event of any such transaction or event, the Committee may provide in substitution
for any or all outstanding Awards under the Plan such alternative consideration (including securities of any surviving entity)
as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender
of all Awards so replaced. In any case, such substitution of securities shall not require the consent of any person who is granted
Awards pursuant to the Plan. Except as expressly provided herein, or in an Award Agreement, if the Company issues for consideration
shares of stock of any class or securities convertible into shares of stock of any class, the issuance shall not affect, and no
adjustment by reason thereof shall be required to be made with respect to the number or price of Shares subject to any Award.

 

    	 	PAGE 11	 

     

    

 

(b)          Dissolution
or Liquidation. In the event of the dissolution or liquidation of the Company other than as part of a Change in Control, each
Award will terminate immediately prior to the consummation of such action, subject to the ability of the Committee to exercise
any discretion authorized in the case of a Change in Control.

 

(c)          Change
in Control. In the event of a Change in Control, the Committee may, in its sole and absolute discretion and authority, without
obtaining the approval or consent of the Company’s stockholders or any Participant with respect to his or her outstanding
Awards, take one or more of the following actions:

 

(i)            cause
or otherwise provide that each outstanding Award shall be assumed through the continuation of the Plan and the assumption of the
agreements covering the Award or substituted for a substantially similar award issued by a successor entity or a parent or subsidiary
of such successor entity (the “Successor Entity”), in each case with appropriate adjustments as to the
number and kind of shares subject to the Award, the exercise price of such Award and such other terms deemed appropriate, as applicable;

 

(ii)           arrange
or otherwise provide for the payment of cash or other consideration to Participants in exchange for the satisfaction and cancellation
of outstanding Awards;

 

(iii)          accelerate,
in part or in full, to a date prior to the effective time of such Change in Control as the Committee shall determine (or, if the
Committee shall not determine such a date, to the date that is four days prior to the effective time of the Change in Control)
the vesting of Awards so that Awards shall vest (and, to the extent applicable, become exercisable) as to the Shares that otherwise
would have been unvested and provide that repurchase rights of the Company with respect to Shares issued upon exercise of an Award
shall lapse as to the Shares subject to such repurchase right; or

 

(iv)          make
such other modifications, adjustments or amendments to outstanding Awards or this Plan as the Committee deems necessary or appropriate,
subject, however, to the terms of Section 14(a).

 

Notwithstanding the above, (i) to the extent that an Award
is not exercised prior to consummation of a transaction, including a Change in Control, in which the Award is not being assumed
or substituted for in such transaction, such Award shall automatically terminate as of immediately prior to the consummation of
such transaction; and (ii) in the event a Participant holding an Award assumed or substituted by the Successor Entity in a
Change in Control is Involuntarily Terminated by the Successor Entity in connection with, or within 12 months following
consummation of, the Change in Control, then any assumed or substituted Award held by the terminated Participant at the time of
termination shall accelerate and become fully vested (and exercisable in full in the case of Options and SARs), and any repurchase
right applicable to any Shares shall lapse in full, unless an Award Agreement provides for a more restrictive acceleration or vesting
schedule or more restrictive limitations on the lapse of repurchase rights or otherwise places additional restrictions, limitations
and conditions on an Award. The acceleration of vesting and lapse of repurchase rights provided for in the previous sentence shall
occur immediately prior to the effective time of the Participant’s termination, unless an Award Agreement provides otherwise.

 

(d)          Certain
Distributions. In the event of any distribution to the Company’s stockholders of securities of any other entity or other
assets (other than dividends payable in cash or stock of the Company) without receipt of consideration by the Company, the Committee
may, in its discretion, appropriately adjust the price per Share covered by each outstanding Award to reflect the effect of such
distribution.

 

(e)          Limitation
on Adjustments. No adjustment or action described in this Section 12, 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 or violate the exemptive conditions of Rule 16b-3 unless the Committee determines
that the Award is not to comply with such exemptive conditions. No action shall be taken under this Section 12 which shall
cause an Award to fail to be exempt from or comply with Section 409A of the Code or the regulations thereunder.

 

    	 	PAGE 12	 

     

    

 

13.          Time
of Granting Awards.

 

The date of grant (“Grant Date”) of
an Award shall be the date on which the Committee makes the determination granting such Award or such other date as is determined
by the Committee and set forth in the Award Agreement, provided that in the case of an ISO, the Grant Date shall be the
later of the date on which the Committee makes the determination granting such ISO or the date of commencement of the Participant’s
employment relationship with the Company.

 

14.          Modification
of Awards and Substitution of Options.

 

(a)          Modification,
Extension, and Renewal of Awards. Within the limitations of the Plan, the Committee may modify an Award to accelerate the rate
at which an Option or SAR may be exercised (including without limitation permitting an Option or SAR to be exercised in full without
regard to the installment or vesting provisions of the applicable Award Agreement or whether the Option or SAR is at the time exercisable,
to the extent it has not previously been exercised), to accelerate the vesting of any Award only in the event of a Change in Control,
to extend or renew outstanding Awards or to accept the cancellation of outstanding Awards to the extent not previously exercised.
However, the Committee may not cancel an outstanding option that is underwater for the purpose of reissuing the option to the participant
at a lower exercise price or granting a replacement award of a different type. Notwithstanding the foregoing provision, no modification
of an outstanding Award shall materially and adversely affect such Participant’s rights thereunder, unless either the Participant
provides written consent or there is an express Plan provision permitting the Committee to act unilaterally to make the modification.
Neither the Company nor the Committee shall, without prior stockholder approval, allow for a cash buyout of underwater options
or SARs.

 

(b)          Substitution
of Options. Notwithstanding any inconsistent provisions or limits under the Plan, in the event the Company or an Affiliate
acquires (whether by purchase, merger or otherwise) all or substantially all of outstanding capital stock or assets of another
corporation or in the event of any reorganization or other transaction qualifying under Section 424 of the Code, the Committee
may, in accordance with the provisions of that Section, substitute Options for options under the plan of the acquired company provided
(i) the excess of the aggregate fair market value of the shares subject to an option immediately after the substitution over
the aggregate option price of such shares is not more than the similar excess immediately before such substitution and (ii) the
new option does not give persons additional benefits, including any extension of the exercise period.

 

15.          Term
of Plan.

 

The Plan shall continue in effect for a term of ten years from
the date this Plan is first adopted by the Board, unless the Plan is sooner terminated under Section 16.

 

16.          Amendment
and Termination of the Plan.

 

(a)          Authority
to Amend or Terminate. Subject to Applicable Laws, the Board may, from time to time, amend, alter, suspend, discontinue, or
terminate the Plan.

 

(b)          Effect
of Amendment or Termination. No amendment, suspension, or termination of the Plan shall materially and adversely affect Awards
already granted unless either it relates to an adjustment pursuant to Section 12, or it is otherwise mutually agreed between
the Participant and the Committee, which agreement must be in writing and signed by the Participant and the Company. Notwithstanding
the foregoing, the Committee may amend the Plan to eliminate provisions which are no longer necessary as a result of changes in
tax or securities laws or regulations, or in the interpretation thereof.

 

17.          Conditions
Upon Issuance of Shares.

 

Notwithstanding any other provision of the Plan or any agreement
entered into by the Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability for failure,
to issue or deliver any Shares under the Plan unless such issuance or delivery would comply with Applicable Law, with such compliance
determined by the Company in consultation with its legal counsel.

 

    	 	PAGE 13	 

     

    

 

18.          Reservation
of Shares.

 

The Company, during the term of this Plan, will at all times
reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. Neither the Company
nor the Committee shall, without stockholder approval, allow for a repricing within the meaning of the federal securities laws
applicable to proxy statement disclosures.

 

19.          Effective
Date and Contingencies.

 

The Plan shall become effective on the date it is adopted by
the Board or the Committee; provided that this Plan shall be submitted to the Company’s stockholders for approval.
If this Plan is not approved by the Company’s stockholders in accordance with Applicable Laws (as determined by the Committee
in its sole discretion) within one year from the date of approval by the Board, this Plan and any Awards shall be null, void, and
of no force and effect. Awards granted under this Plan before approval of this Plan by the stockholders shall be granted subject
to such approval, and no Shares shall be distributed before such approval.

 

20.          Controlling
Law.

 

This Plan shall be governed by the laws of the State of Delaware
(without regard to conflicts of laws principles), to the extent not preempted by United States federal law. If any provision of
this Plan is held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions shall continue
to be fully effective.

 

21.          Laws
and Regulations.

 

(a)          U.S. Securities
Laws. This Plan, the grant of Awards, and the exercise of Options and SARs under this Plan, and the obligation of the Company
to sell or deliver any of its securities (including, without limitation, Options, Restricted Shares, Restricted Share Units, and
Shares) under this Plan shall be subject to all Applicable Law. In the event that the Shares are not registered under the Securities
Act of 1933, as amended (the “Act”), or any applicable state securities laws prior to the delivery
of such Shares, the Company may require, as a condition to the issuance thereof, that the persons to whom Shares are to be issued
represent and warrant in writing to the Company that such Shares are being acquired by him or her for investment for his or her
own account and not with a view to, for resale in connection with, or with an intent of participating directly or indirectly in,
any distribution of such Shares within the meaning of the Act, and a legend to that effect may be placed on the certificates representing
the Shares.

 

(b)          Other
Jurisdictions. To facilitate the making of any grant of an Award under this Plan, the Committee may provide for such special
terms for Awards to Participants who are foreign nationals or who are employed by the Company or any Affiliate outside of the United
States of America as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or
custom. The Company may adopt rules and procedures relating to the operation and administration of this Plan to accommodate
the specific requirements of local laws and procedures of particular countries. Without limiting the foregoing, the Company is
specifically authorized to adopt rules and procedures regarding the conversion of local currency, taxes, withholding procedures
and handling of stock certificates which vary with the customs and requirements of particular countries. The Company may adopt
sub-plans and establish escrow accounts and trusts as may be appropriate or applicable to particular locations and countries.

 

    	 	PAGE 14	 

     

    

 

(c)          Data
Privacy. As a condition of receipt of any Award, each Participant explicitly and unambiguously consents to the collection,
use, and transfer, in electronic or other form, of personal data as described in this Section by and among, as applicable,
the Company and its Affiliates for the exclusive purpose of implementing, administering, and managing this Plan and Awards and
the Participant’s participation in this Plan. In furtherance of such implementation, administration, and management, the
Company and its Affiliates may hold certain personal information about a Participant with respect to one or more Awards under the
Plan, including, but not limited to, the Participant’s name, home address, telephone number, date of birth, social security
or insurance number or other identification number, salary, nationality, job title(s), information regarding any securities of
the Company or any of its Affiliates, and details of all Awards (the “Data”). In addition to transferring
the Data amongst themselves as necessary for the purpose of implementation, administration, and management of this Plan and Awards
and the Participant’s participation in this Plan, the Company and its Affiliates each may transfer the Data to any third
parties assisting the Company in the implementation, administration, and management of this Plan and Awards and the Participant’s
participation in this Plan. Recipients of the Data may be located in the Participant’s country or elsewhere, and the Participant’s
country and any given recipient’s country may have different data privacy laws and protections. By accepting an Award, each
Participant authorizes such recipients to receive, possess, use, retain, and transfer the Data, in electronic or other form, for
the purposes of assisting the Company in the implementation, administration, and management of this Plan and Awards and the Participant’s
participation in this Plan, including any requisite transfer of such Data as may be required to a broker or other third party with
whom the Company or the Participant may elect to deposit any Shares. A Participant may, at any time, view the Data held by the
Company with respect to such Participant, request additional information about the storage and processing of the Data with respect
to such Participant, recommend any necessary corrections to the Data with respect to the Participant, or refuse or withdraw the
consents herein in writing, in any case without cost, by contacting such Participant’s local human resources representative.
The Company may cancel the Participant’s eligibility to participate in this Plan, and in the Committee’s discretion,
the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents described herein. For more
information on the consequences of refusal to consent or withdrawal of consent, Participants may contact their local human resources
representative.

 

22.          No
Stockholder Rights. Neither a Participant nor any transferee of a Participant shall have any rights as a stockholder of
the Company with respect to any Shares underlying any Award until the date of issuance of a share certificate to a Participant
or a transferee of a Participant for such Shares in accordance with the Company’s governing instruments and Applicable Law.
Prior to the issuance of Shares pursuant to an Award, a Participant shall not have the right to vote or to receive dividends or
any other rights as a stockholder with respect to the Shares underlying the Award, notwithstanding its exercise in the case of
Options and SARs. No adjustment will be made for a dividend or other right that is determined based on a record date prior to the
date the stock certificate is issued, except as otherwise specifically provided for in this Plan.

 

23.          No
Employment Rights. The Plan shall not confer upon any Participant any right to continue an employment, service or consulting
relationship with the Company, nor shall it affect in any way a Participant’s right or the Company’s right to terminate
the Participant’s employment, service, or consulting relationship at any time, with or without Cause.

 

24.          References.
All references herein to sections and appendices shall be deemed to be references to sections and appendices, respectively, of
this Plan unless the context shall otherwise require. The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.” Unless otherwise expressly provided herein, any
agreement, instrument or statute defined or referred to herein or in any agreement or instrument defined or referred to herein
means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements
or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes, and references
to all attachments thereto and instruments incorporated therein.

 

25.          Termination,
Rescission and Recapture of Awards. Notwithstanding any other provision of the Plan, but only to the extent specifically
provided in any Award Agreement, this Section shall only apply to a Participant who is, on the date of an Award, an Employee
of the Company or its Affiliates, and shall automatically cease to apply to any Participant from and after his or her termination
of Continuous Service after a Change in Control.

 

(a)          Each
Award under the Plan is intended to align the Participant’s long-term interest with those of the Company. If the Participant
engages in certain activities discussed below, either during employment or after employment with the Company, the Participant is
acting contrary to the long-term interests of the Company. Accordingly, except as otherwise expressly provided in the Award Agreement,
the Company may terminate any outstanding, unexercised, unexpired, unpaid, or deferred Awards (“Termination”),
rescind any exercise, payment or delivery pursuant to the Award (“Rescission”), or recapture any Shares
(whether restricted or unrestricted) or proceeds from the Participant’s sale of Shares issued pursuant to the Award (“Recapture”),
if the Participant does not comply with the conditions of subsections (b) and (c) hereof (collectively, the “Conditions”).

 

    	 	PAGE 15	 

     

    

 

(b)          A
Participant shall not, without the Company’s prior written authorization, disclose to anyone outside the Company, or use
in other than the Company’s business, any proprietary or confidential information or material, as those or other similar
terms are used in any applicable patent, confidentiality, inventions, secrecy, or other agreement between the Participant and the
Company with regard to any such proprietary or confidential information or material.

 

(c)          Pursuant
to any agreement between the Participant and the Company with regard to intellectual property (including but not limited to patents,
trademarks, copyrights, trade secrets, inventions, developments, improvements, proprietary information, confidential business and
personnel information), a Participant shall promptly disclose and assign to the Company or its designee all right, title, and interest
in such intellectual property, and shall take all reasonable steps necessary to enable the Company to secure all right, title and
interest in such intellectual property in the United States and in any foreign country.

 

(d)          Upon
exercise, payment, or delivery of cash or Shares pursuant to an Award, the Participant shall certify on a form acceptable to the
Company that he or she is in compliance with the terms and conditions of the Plan and, if a severance of Continuous Service has
occurred for any reason, shall state the name and address of the Participant’s then-current employer or any entity for which
the Participant performs business services and the Participant’s title, and shall identify any organization or business in
which the Participant owns a greater-than-five-percent equity interest.

 

(e)          To
the extent permitted by Applicable Law, if the Company determines, in its sole and absolute discretion, that (i) a Participant
has violated any of the Conditions or (ii) during his or her Continuous Service, or within one (1) year after Participant’s
termination for any reason, a Participant (a) has rendered services to or otherwise directly or indirectly engaged in or assisted,
any organization or business that, in the judgment of the Company in its sole and absolute discretion, is or is working to become
competitive with the Company; (b) has solicited any non-administrative employee of the Company to terminate employment with
the Company; or (c) has engaged in activities which are materially prejudicial to or in conflict with the interests of the
Company, including any breaches of fiduciary duty or the duty of loyalty, then the Company may, in its sole and absolute discretion,
impose a Termination, Rescission, and/or Recapture with respect to any or all of the Participant’s relevant Awards, Shares,
and the proceeds thereof.

 

(f)          Within
ten days after receiving notice from the Company of any such activity, the Participant shall deliver to the Company the Shares
acquired pursuant to the Award, or, if Participant has sold the Shares, the gain realized, or payment received as a result of the
rescinded exercise, payment, or delivery; provided that if the Participant returns Shares that the Participant purchased
pursuant to the exercise of an Option (or the gains realized from the sale of such Shares), the Company shall promptly refund the
exercise price, without earnings, that the Participant paid for the Shares. Any payment by the Participant to the Company pursuant
to this Section 25 shall be made either in cash or by returning to the Company the number of Shares that the Participant received
in connection with the rescinded exercise, payment, or delivery. It shall not be a basis for Termination, Rescission or Recapture
if, after termination of a Participant’s Continuous Service, the Participant purchases, as an investment or otherwise, stock
or other securities of such an organization or business, so long as (i) such stock or other securities are listed upon a recognized
securities exchange or traded over-the-counter, and (ii) such investment does not represent more than a five percent (5%) equity
interest in the organization or business.

 

(g)          Notwithstanding
the foregoing provisions of this Section, the Company has sole and absolute discretion not to require Termination, Rescission and/or
Recapture, and its determination not to require Termination, Rescission and/or Recapture with respect to any particular act by
a particular Participant or Award shall not in any way reduce or eliminate the Company’s authority to require Termination,
Rescission and/or Recapture with respect to any other act or Participant or Award. Nothing in this Section shall be construed
to impose obligations on the Participant to refrain from engaging in lawful competition with the Company after the termination
of employment that does not violate subsections (b) or (c) of this Section, other than any obligations that are
part of any separate agreement between the Company and the Participant or that arise under Applicable Law.

 

    	 	PAGE 16	 

     

    

 

(h)          All
administrative and discretionary authority given to the Company under this Section shall be exercised by the most senior human
resources executive of the Company or such other person or committee (including without limitation the Committee) as the Committee
may designate from time to time.

 

(i)           Notwithstanding
any provision of this Section, if any provision of this Section is determined to be unenforceable or invalid under any Applicable
Law, such provision will be applied to the maximum extent permitted by Applicable Law, and shall automatically be deemed amended
in a manner consistent with its objectives to the extent necessary to conform to any limitations required under Applicable Law.
Furthermore, if any provision of this Section is illegal under any Applicable Law, such provision shall be null and void to
the extent necessary to comply with Applicable Law.

 

(j)           All
Awards (including any proceeds, gains or other economic benefit actually or constructively received by the Participant 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.

 

26.          Recoupment
of Awards. Unless otherwise specifically provided in an Award Agreement, and to the extent permitted by Applicable Law,
the Committee may in its sole and absolute discretion, without obtaining the approval or consent of the Company’s stockholders
or of any Participant, require that any Participant reimburse the Company for all or any portion of any Awards granted to him or
her under this Plan (“Reimbursement”), or the Committee may require the Termination or Rescission of,
or the Recapture associated with, any Award, if and to the extent:

 

(a)          the
granting, vesting, or payment of such Award (or portion thereof) was predicated upon the achievement of certain financial results
or other performance criteria;

 

(b)          in
the Committee’s view, the Participant either benefited from a calculation that later proves to be materially inaccurate,
or engaged in one or more material acts of fraud or misconduct that caused or partially caused the need for a financial restatement
by the Company or any material Affiliate thereof; and

 

(c)          a
lower granting, vesting or payment of such Award would have occurred based upon the conduct described in clause (b) of
this Section 26.

 

In each instance, the Committee may, to the extent practicable
and allowable under Applicable Laws, require Reimbursement, Termination or Rescission of, or Recapture relating to, any such Award
granted to a Participant; provided that the Company will not seek Reimbursement, Termination or Rescission of, or Recapture
relating to, any such Awards that were paid or vested more than three years prior to the first date of the applicable restatement
period.

 

[APPENDIX A
FOLLOWS]

 

    	 	PAGE 17	 

     

    

 

SORRENTO THERAPEUTICS, INC.

2019 STOCK INCENTIVE PLAN

 

 

Appendix A: Definitions

 

 

As used in the Plan, the following definitions shall apply:

 

“Affiliate” means, with respect to
any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person.
For the purposes of this definition, “control,” when used with respect to any Person, means the possession,
direct or indirect, of the power to direct or cause the direction of the management and policies of such Person or the power to
elect directors, whether through the ownership of voting securities, by contract or otherwise; and the terms “affiliated,”
 “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Applicable Law” means the legal requirements
relating to the administration of options and share-based plans under applicable U.S. federal and state laws, the Code, any
applicable stock exchange or automated quotation system rules or regulations, and the applicable laws of any other country
or jurisdiction where Awards are granted, as such laws, rules, regulations and requirements shall be in place from time to time.

 

“Award” means any award made pursuant
to the Plan, including awards made in the form of an Option, an SAR, a Restricted Share, a Restricted Share Unit, an Unrestricted
Share, a Dividend Equivalent, and a Performance Award, or any combination thereof, whether alternative or cumulative, authorized
by and granted under this Plan.

 

“Award Agreement” means any written
document setting forth the terms of an Award that has been authorized by the Committee. The Committee shall determine the form
or forms of documents to be used, and may change them from time to time for any reason.

 

“Board” means the Board of Directors
of the Company.

 

“Cause” for termination of a Participant’s
Continuous Service will have the meaning set forth in any unexpired employment, consulting or service agreement between the Company
and the Participant. In the absence of such an agreement, “Cause” will exist if the Participant is terminated
from employment or other service with the Company or an Affiliate for any of the following reasons: (i) the Participant’s
failure to substantially perform his or her duties and responsibilities to the Company or violation of a material Company policy;
(ii) the Participant’s commission of any act or acts of fraud, embezzlement, dishonesty, or other misconduct; (iii) the
Participant’s unauthorized use or disclosure of any proprietary information or trade secrets of the Company or any other
party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) the
Participant’s material breach of any of his or her obligations under any written agreement or covenant with the Company.

 

The Committee shall in its discretion determine whether or not
a Participant is being terminated for Cause. The Committee’s determination shall, unless arbitrary and capricious, be final
and binding on the Participant, the Company, and all other affected persons. The foregoing definition does not in any way limit
the Company’s ability to terminate a Participant’s employment, consulting or service relationship at any time, and
the term “Company” will be interpreted herein to include any Affiliate or successor thereto, if appropriate.

 

    	 	 	 

    	 	 	 

    

 

“Change in Control” shall mean the
occurrence during the term of the Plan of any of the following events, subject however to the Committee’s determination (to
the extent required to conform with Section 409A of the Code) that any occurrence listed below is a permissible distribution
event within the meaning of Section 409A of the Code (it being the intention of the Company to set forth, interpret and apply
the following provisions in a manner conforming with Section 409A insofar as applicable): (i) the acquisition, directly
or indirectly, by any person or group (within the meaning of Section 13(d)(3) of the Exchange Act of the beneficial ownership
of securities of the Company possessing more than fifty percent (50%) of the combined voting power of all outstanding securities
of the Company; (ii) a merger or consolidation in which the Company is not the surviving entity, except for a transaction
in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold,
in the aggregate, securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding
voting securities of the surviving entity immediately after such merger or consolidation; (iii) the sale, transfer or other
disposition (in one or more transactions or series of related transactions) of all or substantially all of the assets of the Company;
(iv) a complete liquidation or dissolution of the Company; or (v) any reverse merger in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s
outstanding voting securities are transferred to or acquired by one or more Persons different from the Persons (or their Affiliates)
holding those securities immediately prior to such merger.

 

Notwithstanding the foregoing, a “Change in Control”
shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately
following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions
have substantially the same proportionate ownership in an entity which owns all or substantially all of the former assets or capital
stock of the Company immediately following such transaction or series of transactions.

 

“Code” means the U.S. Internal
Revenue Code of 1986, as amended.

 

“Committee” means one or more committees
or subcommittees of the Board appointed by the Board to administer the Plan in accordance with Section 4. With respect to
any decision involving an Award intended to satisfy the requirements of Section 162(m) of the Code, the Committee shall
consist of two or more Directors of the Company who are “outside directors” within the meaning of Section 162(m) of
the Code. With respect to any decision relating to a Reporting Person, the Committee shall consist of two or more Directors who
are disinterested within the meaning of Rule 16b-3.

 

“Company” means Sorrento Therapeutics, Inc.,
a Delaware corporation; provided, however, that in the event the Company reincorporates to another jurisdiction,
all references to the term “Company” shall refer to the Company in such new jurisdiction.

 

“Consultant” means any person, including
an advisor, who is engaged by the Company or any Affiliate to render services and is compensated for such services.

 

“Continuous Service” means a Participant’s
most recent period of service, in the absence of any interruption or termination of service, as an Employee, Director, or Consultant.
Continuous Service shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any
other leave of absence approved by the Committee, provided that such leave is for a period of not more than 90 days,
unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant
to Company policy adopted from time to time; (iv) changes in status from Director to advisory director or emeritus status;
or (iv) in the case of transfers between locations of the Company or between the Company, its Affiliates or their respective
successors. Changes in status between service as an Employee, Director, and a Consultant will not, by itself, constitute an interruption
of Continuous Service.

 

“Director” means a member of the Board,
or a member of the board of directors of an Affiliate.

 

“Disabled” or “Disability”
means a condition under which a Participant:

 

(a)          is
unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or

 

(b)          has,
by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months, received income replacement benefits for a period of not
less than 3 months under an accident or health plan covering employees of the Company.

 

    	 	A-2	 

    	 	 	 

    

 

“Dividend Equivalent” means a right
to receive the equivalent value (in cash or Shares) of dividends paid on Shares, awarded under Section 8.

 

“Eligible Person” means any Consultant,
Director or Employee and includes non-Employees to whom an offer of employment has been extended by the Company or an Affiliate.

 

“Employee” means any person whom the
Company or any Affiliate classifies as an employee (including an officer) for employment tax purposes, whether or not that classification
is correct. The payment by the Company of a director’s fee to a Director shall not be sufficient to constitute “employment”
of such Director by the Company.

 

“Exchange Act” means the Securities
Exchange Act of 1934, as amended.

 

“Fair Market Value” means, unless
otherwise determined by the Board on the committee, as of any date (the “Determination Date”): (i) the
closing price of a Share on the New York Stock Exchange, the American Stock Exchange or The Nasdaq Stock Market LLC (as applicable,
the “Exchange”), on the Determination Date, or, if shares were listed, but not traded, on such Exchange
on the Determination Date, then on the nearest preceding trading day during which a sale occurred; or (ii) if such stock is
not quoted on an Exchange, but is otherwise traded on the Over-the-Counter Bulletin BoardTM or the Pink Sheets®,
the mean between the representative bid and asked prices on the Determination Date or the last preceding date for which such information
is available; or (iii) if subsections (i) and (ii) do not apply, the fair market value established in good
faith by the Board.

 

“Incentive Share Option” or “ISO”
hereinafter means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code,
as designated in the applicable Award Agreement.

 

“Involuntarily Terminated” means a
Participant’s Continuous Service is terminated under the following circumstances occurring in connection with, or within 12 months
following consummation of, a Change in Control: (i) termination without Cause by the Company or an Affiliate or successor
thereto, as appropriate; or (ii) voluntary termination by the Participant within 60 days following (A) a material
reduction in the Participant’s job responsibilities, provided that neither a mere change in title alone nor reassignment
to a substantially similar position shall constitute a material reduction in job responsibilities; (B) an involuntary relocation
of the Participant’s work site to a facility or location more than 50 miles from the Participant’s principal work
site as of immediately prior to the Change in Control; or (C) a material reduction in Participant’s total compensation
other than as part of a reduction by the same percentage amount in the compensation of all other similarly-situated Employees,
Directors or Consultants.

 

“Non-Employee Director” means a Director
of the Company who is not an Employee.

 

“Non-ISO” means an Option not intended
to qualify as an ISO, as designated in the applicable Award Agreement.

 

“Option” means any stock option granted
pursuant to Section 6.

 

“Original Plan” shall have the meaning
set forth in Section 1.

 

“Participant” means any holder of
one or more Awards, or the Shares issuable or issued upon exercise of such Awards, under the Plan.

 

“Performance Awards” 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 9.

 

“Performance Unit” means Awards granted
pursuant to Section 9(a) that are denominated in units of value, which may include, without limitation, the dollar value
of Shares, and that may be paid in cash, in Shares, or such combination of cash and Shares as the Committee in its sole discretion
shall determine.

 

    	 	A-3	 

    	 	 	 

    

 

“Person” means any natural person,
association, trust, business trust, cooperative, corporation, general partnership, joint venture, joint-stock company, limited
partnership, limited liability company, real estate investment trust, regulatory body, governmental agency or instrumentality,
unincorporated organization or organizational entity.

 

“Reporting Person” means an officer,
Director, or greater than ten percent stockholder of the Company within the meaning of Rule 16a-2 under the Exchange Act,
who is required to file reports pursuant to Rule 16a-3 under the Exchange Act.

 

“Rule 16b-3” means Rule 16b-3
promulgated under the Exchange Act, as amended from time to time, or any successor provision.

 

“SAR” or “Share Appreciation
Right” means Awards granted pursuant to Section 7.

 

“Share” means a share of common stock
of the Company, as adjusted in accordance with Section 12.

 

“Substitute Award” means 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 SAR.

 

“Ten Percent Holder” means a person
who owns stock representing more than 10% of the combined voting power of all classes of stock of the Company or any Affiliate.

 

    	 	A-4Exhibit 10.3

 

SORRENTO THERAPEUTICS, INC.

PERFORMANCE STOCK OPTION AWARD AGREEMENT

 

Part I. NOTICE OF STOCK
OPTION GRANT

 

	Participant Name:	Henry Ji, Ph.D.

 

Participant has been
granted a Non-Qualified Stock Option to purchase Common Stock of Sorrento Therapeutics, Inc., a Delaware corporation (the
 “Company”), pursuant to the terms and conditions of this Performance Stock Option Award Agreement (this
 “Agreement”), as follows. Any capitalized term that is not defined in this Part I of this Agreement
titled “Notice of Stock Option Grant” has the meaning assigned to such term in Part II of this Agreement titled
 “Terms and Conditions of Stock Option Grant,” attached hereto as Exhibit A (the “Terms and
Conditions”).

 

	Date of Grant	August 7, 2020
	 	 
	Exercise Price Per Share	$17.30
	 	 
	Total Number of Shares Granted	24,935,882
	 	 
	Total Exercise Price	$431,390,758.60
	 	 
	Type of Option	Non-Qualified Stock Option
	 	 
	Expiration Date	August 7, 2030

 

		I.	Vesting Requirements

 

The Option is a performance-based
stock option award and, subject to Participant continuing as (a) the Chief Executive Officer of the Company, or (b) the
Executive Chairman of the Company (such roles satisfying either of clauses (a) or (b), the “Chief Company
Executive”) through each vesting event, shall vest and be exercisable upon the satisfaction of the Market Capitalization
Milestones as described in more detail below.

 

As detailed in Table 1
below, the Option is divided into ten (10) vesting tranches (each a “Tranche”), with each Tranche
representing a portion of the Option covering that number of Shares specified next to the applicable Tranche number in Table 1
below. Each Tranche shall vest upon satisfaction of the Market Capitalization Milestone set forth next to the applicable Tranche
in Table 1 below (each, a “Market Capitalization Milestone”), all subject to Participant
continuing as the Chief Company Executive through the date the Administrator determines, approves and certifies in writing that
the requisite vesting conditions for the applicable Tranche have been satisfied on or before the Expiration Date (a “Certification”).

 

     

     

    

 

The Administrator shall,
periodically and upon request of Participant, assess whether the vesting requirements have been satisfied. The maximum term of
the Option shall be ten (10) years so that absent earlier termination as provided herein, the Option shall expire automatically
on the Expiration Date specified above (without regard to whether any or all of the Option vested or whether Participant exercised
any vested part of the Option).

 

Table 1. Vesting Requirements for Performance-Based
Option.

 

	 	 	 	 	 	Vesting Requirements1	 
	Tranche #	 	Number of Shares Subject 

to Option	 	 	Market Capitalization Milestones2	 
	1	 	 	2,493,588	 	 	$	5,000,000,000	 
	2	 	 	2,493,588	 	 	$	7,000,000,000	 
	3	 	 	2,493,588	 	 	$	9,000,000,000	 
	4	 	 	2,493,588	 	 	$	12,000,000,000	 
	5	 	 	2,493,588	 	 	$	15,000,000,000	 
	6	 	 	2,493,588	 	 	$	18,000,000,000	 
	7	 	 	2,493,588	 	 	$	22,000,000,000	 
	8	 	 	2,493,588	 	 	$	26,000,000,000	 
	9	 	 	2,493,588	 	 	$	30,000,000,000	 
	10	 	 	2,493,590	 	 	$	35,000,000,000	 
	Total:	 	 	24,935,882	 	 	 	 	 

 

		II.	Determination of Market Capitalization

 

		A.	Market Capitalization, Generally.

 

For purposes of the Option, “Market
Capitalization” on a particular day (the “Determination Date”) refers to either the Six-month
Market Cap or the Thirty-day Market Cap, determined in accordance with the following:

 

		1.	A trading day refers to a day on which the primary stock exchange or national market system on
which the Common Stock trades (e.g., the Nasdaq Capital Market) is open for trading.

 

		2.	The Company’s daily market capitalization for a particular trading day is equal to the product
of (a) the total number of outstanding Shares as of the close of such trading day, as reported by the Company’s transfer
agent, and (b) the closing sales price per Share as of the close of such trading day, as reported by The Nasdaq Stock Market
LLC (“Nasdaq”) (or other reliable source selected by the Administrator if Nasdaq is not reporting a closing
sales price for that day) (such product, the “Daily Market Capitalization”).

 

 

		1	Achievement of the vesting requirements for each Tranche shall be determined, approved and certified by the Administrator,
in its sole, good faith discretion. Subject to any applicable clawback provisions, policies or other terms herein, once a milestone
is achieved, it is forever deemed achieved for determining the vesting of a Tranche. For purposes of clarity, more than one Tranche
may vest simultaneously upon a Certification. For example, assume that none of the Tranches has vested, and upon a Certification,
the Market Capitalization is determined to be $7,000,000,000. As of the date of such Certification, and subject to Participant
remaining the Chief Company Executive through such date, both Tranches 1 and 2 will become vested.

		2	The Market Capitalization Milestones are subject to adjustment pursuant to the terms of this Agreement relating to certain
corporate transactions. See Section V.

 

    	 	2	 

     

    

 

		3.	The “Six-month Market Cap” is equal to (a) the sum of the Daily
Market Capitalization of the Company for each trading day during the six (6) calendar month period immediately prior to and
including the Determination Date, divided by (b) the number of trading days during such period.

 

		4.	The “Thirty-day Market Cap” is equal to (a) the sum of the Daily
Market Capitalization of the Company for each trading day during the thirty (30) calendar day period immediately prior to
and including the Determination Date, divided by (b) the number of trading days during such period.

 

In order
for the Market Capitalization Milestone set forth in Table 1 for any particular Tranche above to be met, both the Six-month
Market Cap and the Thirty-day Market Cap must equal or exceed the value of such applicable Market Capitalization Milestone on any
Determination Date.

 

		III.	Vesting Determination upon Change in Control of the Company

 

In the event of a Change
in Control, the Six-month Market Cap and Thirty-day Market Cap shall be disregarded, and the Market Capitalization shall equal
the product of (a) the total number of outstanding Shares immediately prior to the effective time of such Change in Control,
as reported by the Company’s transfer agent, and (b) the per Share price (plus the per Share value of any other consideration)
received by the Company’s stockholders in the Change in Control (with such value determined in good faith by the Administrator
in its sole discretion).

 

To the extent that
any Tranche has not vested as of immediately prior to the effective time of the Change in Control and otherwise does not vest as
a result of the Change in Control, such unvested Tranche will be forfeited automatically as of immediately prior to the effective
time of the Change in Control and never shall become vested.

 

		IV.	Milestone Adjustments in the Event of Certain Corporate Transactions

 

		A.	Milestone Adjustments for Acquisitions: Upon and effective as of the closing of an Acquisition with a Purchase Price
greater than the Transaction Value Threshold, any and all Market Capitalization Milestones that are unachieved as of immediately
before the closing of such Acquisition will be increased by the dollar amount equal to the Purchase Price of such Acquisition.

 

		B.	Milestone Adjustments for Spin-Offs: Upon and effective as of the completion of a Spin-Off with a Spin-Off Value greater
than the Transaction Value Threshold, any and all Market Capitalization Milestones that are unachieved as of immediately before
the completion of such Spin-Off will be decreased by the dollar amount equal to the Spin-Off Value of such Spin-Off.

 

    	 	3	 

     

    

 

		C.	All adjustments pursuant to this Section IV shall be made by the Administrator in its sole and absolute discretion.

 

		V.	Termination Period

 

If Participant ceases
to be the Chief Company Executive as a result of resignation by Participant with thirty (30) days’ advance written notice
or any termination by the Company, the Administrator shall promptly assess whether any vesting requirements have been satisfied
as of a Determination Date scheduled to be the business day prior to the date Participant ceases to be the Chief Company Executive,
and provide Certification of the same, effective as of the date Participant ceases to be the Chief Company Executive.

 

Notwithstanding Section I
to the contrary, if Participant ceases to be the Chief Company Executive for any reason, any portion of the Option that has not
vested by the date of Participant’s cessation as the Chief Company Executive will remain outstanding until the date of such
final Certification specified in the immediately preceding paragraph (but in no event later than the Expiration Date) solely
for purposes of such final Certification, and any such portion of the Option that fails to vest upon such final Certification will
be forfeited automatically and never shall become vested. If, upon Participant’s cessation as the Chief Company Executive,
Participant continues as an Employee of the Company, and as long as Participant continues as an Employee of the Company, any vested
and unexercised portion of the Option may be exercised until the Expiration Date of the Option.

 

If Participant ceases
to be an Employee for any reason, the Option may, to the extent vested as of the date of Participant’s cessation as an Employee,
be exercised until the date that is three (3) months after the date of cessation as an Employee, but in no event later than
the Expiration Date.

 

Notwithstanding the
forgoing, the Option may expire other than as provided in this Section V as provided in Section 7 of the Terms and Conditions.

 

		VI.	Holding Period

 

During Participant’s
lifetime, except as permitted under a cashless exercise in accordance with Section 6.2 of the Terms and Conditions and to
satisfy tax withholding obligations in accordance with Section 9.2 of the Terms and Conditions, Participant shall not sell,
transfer or dispose of the Shares acquired upon exercise of the Option until after the five (5) year anniversary of the date
of the option exercise resulting in the purchase of such Shares; provided, however, Participant may conduct transactions
that involve merely a change in the form in which Participant owns such Shares (e.g., transfer Shares to an inter vivos
trust for which Participant is the beneficiary during Participant’s lifetime), or as permitted by the Administrator consistent
with the Company’s internal policies; and provided further that Participant may sell, transfer or dispose of the Shares
acquired upon exercise of the Option in connection with a Change in Control.

 

    	 	4	 

     

    

 

		VII.	Acceptance of Option

 

By Participant’s
acceptance of this Agreement, either electronically through the electronic acceptance procedure established by the Company or through
a written acceptance delivered to the Company in a form satisfactory to the Company, Participant agrees that the Option is granted
under and governed by the terms and conditions of this Agreement, including the Terms and Conditions, attached hereto as Exhibit A,
all of which are made a part of this document. Participant confirms that he has reviewed this Agreement in its entirety, has had
an opportunity to obtain the advice of counsel prior to executing this Agreement and fully understands all provisions of the Agreement.
Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon
any questions relating to the Agreement. Participant further agrees to notify the Company upon any change in the residence address
indicated above.

 

[Signature page follows]

 

    	 	5	 

     

    

 

In witness whereof, Sorrento Therapeutics, Inc.
has caused this Agreement to be executed on its behalf by its duly-authorized officer on the day and year first indicated above.

 

	 	SORRENTO
    THERAPEUTICS, INC.
	 	 
	 	 
	 	/s/
    Yue Alexander Wu, Ph.D.
	 	Name:
    Yue Alexander Wu, Ph.D.
	 	Title:
    Chairperson of the Compensation Committee

 

	Agreed
    and accepted:	 
	 	 
	Participant:	 
	 	 
	 	 
	/s/ Henry Ji, Ph.D.	 	 
	Henry
    Ji, Ph.D.	 

 

    	 	6	 

     

    

 

EXHIBIT A

 

Part II. TERMS AND CONDITIONS
OF STOCK OPTION GRANT

 

1.            Definitions.
As used herein, the following definitions shall apply to the following capitalized terms:

 

1.1.            “Acquisition”
means any merger of a corporation or other entity with or into the Company by the Company of a corporation or other entity, or
purchase by the Company of all or substantially all assets of a corporation or other entity.

 

1.2.            “Administrator”
means the Board or any committee of Directors or other individuals (excluding Participant) satisfying Applicable Laws appointed
by the Board; provided that while Participant is a Director, Participant shall recuse himself from any Board approvals relating
to the administration of the Agreement or the Option.

 

1.3.            “Agreement”
means this Performance Stock Option Agreement between the Company and Participant evidencing the terms and conditions of the Option.

 

1.4.            “Applicable
Laws” means the legal and regulatory requirements relating to the administration of equity-based awards and the related
issuance of shares of common stock, including but not limited to U.S. state corporate laws, U.S. federal and state securities
laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the laws of any non-U.S. country
or jurisdiction applicable to the Option.

 

1.5.            “Board”
means the Board of Directors of the Company.

 

1.6.            “Change
in Control” means the occurrence of any of the following events, subject however to the Administrator’s determination
(to the extent required to conform with Section 409A of the Code) that any occurrence listed below is a permissible distribution
event within the meaning of Section 409A of the Code (it being the intention of the Company to set forth, interpret and apply
the following provisions in a manner conforming with Section 409A insofar as applicable): (a) the acquisition, directly
or indirectly, by any person or group (within the meaning of Section 13(d)(3) of the Exchange Act) of the beneficial
ownership of securities of the Company possessing more than fifty percent (50%) of the combined voting power of all outstanding
securities of the Company; (b) a merger or consolidation in which the Company is not the surviving entity, except for a transaction
in which the holders of the outstanding voting securities of the Company immediately prior to such merger or consolidation hold,
in the aggregate, securities possessing more than fifty percent (50%) of the total combined voting power of all outstanding voting
securities of the surviving entity immediately after such merger or consolidation; (c) the sale, transfer or other disposition
(in one or more transactions or series of related transactions) of all or substantially all of the assets of the Company; (d) a
complete liquidation or dissolution of the Company; or (e) any reverse merger in which the Company is the surviving entity
but in which securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding
voting securities are transferred to or acquired by one or more persons different from the persons (or their affiliates) holding
those securities immediately prior to such merger.

 

    	 	7	 

     

    

 

1.7.         “Code”
means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder
shall include such section, any valid regulation or other guidance promulgated under such section, and any comparable provision
of any future legislation or regulation amending, supplementing or superseding such section or regulation.

 

1.8.         “Common
Stock” means the common stock of the Company.

 

1.9.         “Company”
means Sorrento Therapeutics, Inc., a Delaware corporation, or any successor thereto.

 

1.10.       “Director”
means a member of the Board.

 

1.11.       “Employee”
means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment”
by the Company.

 

1.12.       “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

1.13.       “Fair
Market Value” means, as of any date, the value of Common Stock determined as follows:

 

(a)            If
the Common Stock is listed on any established stock exchange or a national market system, including without limitation the New
York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market of The Nasdaq Stock
Market LLC, its Fair Market Value will be the closing sales price for the Common Stock (or the closing bid, if no sales were reported)
as quoted on such exchange or system on the day of determination (or if the day of determination is not a day on which the exchange
or system is not open for trading, then the last day prior thereto on which the exchange or system was open for trading), as reported
in The Wall Street Journal or such other source as the Administrator deems reliable;

 

(b)            If
the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value
of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination (or if the
day of determination is not a day on which the dealer is not open for trading, then the last day prior thereto on which the dealer
was open for trading), as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
or

 

(c)            In
the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator.

 

1.14.       “Non-Qualified
Stock Option” means a stock option that, by its terms, does not qualify or is not intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code.

 

    	 	8	 

     

    

 

1.15.       “Notice
of Grant” means the written notice, in Part I of this Agreement titled “Notice of Stock Option Grant,”
evidencing certain terms and conditions of the Option. The Notice of Grant constitutes a part of the Agreement.

 

1.16.        “Officer”
means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and
regulations promulgated thereunder.

 

1.17.       “Option”
means this stock option to purchase Shares granted pursuant to this Agreement.

 

1.18.       “Parent”
means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

 

1.19.       “Participant”
means the person named as the “Participant” in the Notice of Grant.

 

1.20.       “Purchase
Price” means, for each Acquisition, the purchase price as determined reasonably and in good faith by the Administrator,
taking into account, without limitation, the value of consideration paid or issued, future payments to be paid, assets acquired
or liabilities discharged or assumed by the Company in the Acquisition.

 

1.21.       “Share”
means a share of the Common Stock, as adjusted in accordance with Section 7.

 

1.22.       “Spin-Off”
means any split-up, spin-off or divestiture transaction by the Company.

 

1.23.       “Spin-Off
Value” means, for each Spin-Off, the enterprise value of the split-up, spun-off or divested portion of the Company,
as determined reasonably and in good faith by the Administrator.

 

1.24.       “Subsidiary”
means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the
Code.

 

1.25.       “Tax
Obligations” means any tax and/or social insurance liability obligations and requirements in connection with the
Option, including, without limitation, (i) all federal, state and local taxes (including Participant’s Federal Insurance
Contributions Act (FICA) obligation) that are required to be withheld by the Company or other payment of tax-related items
related to the Option and legally applicable to Participant, (ii) Participant’s and, to the extent required by the Company,
the Company’s fringe benefit tax liability, if any, associated with the grant, vesting or exercise of the Option or sale
of Shares, and (iii) any other Company taxes the responsibility for which Participant has, or has agreed to bear, with respect
to the Option (or exercise thereof or issuance of Shares thereunder).

 

1.26.       “Transaction
Value Threshold” means a dollar amount equal to $100,000,000.

 

    	 	9	 

     

    

 

2.            Grant
of Option. The Company hereby grants to Participant named in the Notice of Grant the Option to purchase the number of Shares,
as set forth in the Notice of Grant, at the Exercise Price Per Share set forth in the Notice of Grant (the “Exercise
Price”), subject to all of the terms and conditions in this Agreement. Shares may be authorized, but unissued, or
reacquired Common Stock.

 

3.            Vesting
Requirements. The Option awarded by this Agreement will vest in accordance with the vesting provisions set forth in the Notice
of Grant. Except with respect to any vesting occurring under Section V of the Notice of Grant relating to a final Certification,
the Option shall not vest with respect to any of the covered Shares, unless Participant will have been continuously the Chief Company
Executive from the Date of Grant set forth in the Notice of Grant (“Date of Grant”) until the date such
vesting occurs.

 

4.            Exercise
of Option.

 

4.1.         Right
to Exercise. The Option may be exercised only to the extent vested and only within the term set out in the Notice of Grant,
and may be exercised during such term only in accordance with the terms of this Agreement.

 

4.2.         Method
of Exercise. The Option is exercisable by delivery of an exercise notice, in a form approved by the Administrator (the “Exercise
Notice”), or in a manner and pursuant to such procedures as the Administrator may determine, which will state the
election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised
Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions
of the Agreement. The Exercise Notice will be completed by Participant and delivered to the Company. The Exercise Notice will be
accompanied by payment of the aggregate Exercise Price as to all Exercised Shares together with any Tax Obligations. The Option
will be deemed to be exercised upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate
Exercise Price.

 

5.            Term
of Option. Subject to Section 7, the Option may be exercised only within the term specified in the Notice of Grant, and
may be exercised during such term only in accordance with the terms and conditions of this Agreement. In the event that the Company’s
stockholders (a) do not approve the Option within twelve (12) months following the Date of Grant, or (b) vote upon
the Option at any meeting of the Company’s stockholders and do not approve the Option by the requisite vote, in each case
in accordance with the applicable rules of The Nasdaq Stock Market LLC (or other primary stock exchange or national market
system on which the Common Stock trades), the Option automatically will be forfeited as of such date, and Participant shall have
no further rights to the Option or any Shares underlying the Option. In no event may the Option or any portion thereof be exercised
before the Company’s stockholders approve the Option, notwithstanding any vesting of all or a portion of the Option prior
to such stockholder approval.

 

6.            Method
of Payment. Payment of the aggregate Exercise Price will be by any of the following, or a combination thereof, at the election
of Participant.

 

6.1.         cash;
or

 

    	 	10	 

     

    

 

6.2.         consideration
received by the Company under a cashless exercise program, whether through a broker or otherwise, implemented by the Company in
connection with the Option.

 

7.            Adjustments;
Dissolution of Liquidation; Merger or Change in Control.

 

7.1.          Adjustments.

 

7.1.1.       In
the event that any dividend or other distribution (whether in the form of cash, Shares, other securities or other property), recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, exchange
of Shares or other securities of the Company or other change in the corporate structure of the Company affecting the Shares occurs,
the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available
under the Agreement (and in a manner that will not provide Participant with any greater benefit or potential benefits than intended
to be made available under the Agreement, other than as may be necessary solely to reflect changes resulting from any such aforementioned
event), will adjust the number, class and exercise price of shares covered by the Option.

 

7.1.2.       It
is intended that, if possible, any adjustments contemplated by this Section 7.1 be made in a manner that satisfies applicable
legal, tax (including, without limitation and as applicable in the circumstances, Section 409A of the Code) and accounting
(so as not to trigger any charge to earnings with respect to such adjustment) requirements.

 

7.2.          Dissolution
or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify Participant
as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised,
the Option will terminate immediately prior to the consummation of such proposed action.

 

7.3.          Merger
or Change in Control. In the event of a merger or Change in Control, the Option will be assumed or an equivalent option or
right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation; provided that the
Administrator may not accelerate the vesting of any portion of the Option, and any portion of the Option that is unvested as of
the effective time of a Change in Control will terminate automatically upon such effective time and, provided, further,
that if the Option is not assumed by the successor corporation or a Parent or Subsidiary of the successor corporation, the Option
shall expire as of the effective time of the Change in Control as long as the Participant has been given at least five days’
prior notice and an opportunity to exercise and vested portion of the Option. Notwithstanding anything to the contrary herein other
than the preceding sentence, upon a Change in Control, any vested and unexercised portion of the Option will be exercisable until
the Expiration Date. For the purposes of this Section 7.3, the Option will be considered assumed if, following the Change
in Control, the Option confers the right to purchase or receive, for each Share subject to the Option immediately prior to the
Change in Control, the consideration (whether stock, cash or other securities or property) received in the Change in Control by
holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that
if such consideration received in the Change in Control is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise
of the Option, for each Share subject to the Option, to be solely common stock of the successor corporation or its Parent equal
in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.

 

    	 	11	 

     

    

 

8.            Leave
of Absence. Unless the Administrator provides otherwise, no Determination Date shall occur during any unpaid leave of absence
of Participant.

 

9.            Tax
Matters.

 

9.1.         Tax
Obligations. Participant acknowledges that, regardless of any action taken by the Company, the ultimate liability for any Tax
Obligations is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company. Participant
further acknowledges that the Company (a) makes no representations or undertakings regarding the treatment of any Tax Obligations
in connection with any aspect of the Option, including, but not limited to, the grant, vesting or exercise of the Option, the subsequent
sale of Shares acquired pursuant to such exercise and the receipt of any dividends or other distributions, and (b) does not
commit to, and is under no obligation to structure the terms of, the grant or any aspect of the Option to reduce or eliminate Participant’s
liability for Tax Obligations or achieve any particular tax result. Further, if Participant is subject to Tax Obligations in more
than one jurisdiction between the Date of Grant and the date of any relevant taxable or tax withholding event, as applicable, Participant
acknowledges that the Company may be required to withhold or account for Tax Obligations in more than one jurisdiction. If Participant
fails to make satisfactory arrangements for the payment of any required Tax Obligations hereunder at the time of the applicable
taxable event, Participant acknowledges and agrees that the Company may refuse to issue or deliver the Shares.

 

9.2.         Tax
Withholdings. Pursuant to such procedures as the Administrator may specify from time to time, the Company shall withhold the
amount required to be withheld for the payment of Tax Obligations. The Administrator, in its sole discretion and pursuant to such
procedures as it may specify from time to time, may permit Participant to satisfy such Tax Obligations, in whole or in part (without
limitation), if permissible by Applicable Laws, by (i) paying cash, or (ii) selling a sufficient number of such Shares
otherwise deliverable to Participant through such means as the Company may determine in its sole discretion (whether through a
broker or otherwise) equal to the minimum amount that is necessary to meet the withholding requirement for such Tax Obligations
(or such greater amount as Participant may elect if permitted by the Administrator, if such greater amount would not result in
adverse financial accounting consequences).

 

9.3.         Code
Section 409A. Under Code Section 409A, a stock right (such as the Option) granted with a per Share exercise price
that is determined by the Internal Revenue Service (the “IRS”) to be less than the fair market value
of a Share on the date of grant (a “Discount Option”) may be considered “deferred compensation”
and subject the holder of the Discount Option to adverse tax consequences. Participant agrees that if the IRS determines that the
Option was granted with a per Share exercise price that was less than the fair market value of a Share on its date of grant, Participant
will be solely responsible for Participant’s costs related to such a determination. In no event will the Company or any Parent
or Subsidiary of the Company have any liability or obligation to reimburse, indemnify or hold harmless Participant for any taxes,
interest or penalties that may be imposed, or other costs incurred, as a result of Section 409A or any state law equivalent.

 

    	 	12	 

     

    

 

9.4.         Tax
Consequences. Participant has reviewed with Participant’s own tax advisors the U.S. federal, state, local and non-U.S. tax
consequences of this investment and the transactions contemplated by this Agreement. With respect to such matters, Participant
relies solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral.
Participant understands that Participant (and not the Company) shall be responsible for Participant’s own Tax Obligations
and any other tax-related liabilities that may arise as a result of this investment or the transactions contemplated by this Agreement.

 

10.            Rights
as Stockholder. Neither Participant nor any person claiming under or through Participant will have any of the rights or privileges
of a stockholder of the Company in respect of any Shares deliverable hereunder unless and until certificates representing such
Shares (which may be in book entry form) will have been issued, recorded on the records of the Company or its transfer agents or
registrars, and delivered to Participant (including through electronic delivery to a brokerage account). After such issuance, recordation
and delivery, Participant will have all the rights of a stockholder of the Company with respect to voting such Shares and receipt
of dividends and distributions on such Shares.

 

11.            No
Guarantee of Continued Service. PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING PROVISIONS
HEREOF IS EARNED ONLY BY (AMONG OTHER THINGS) CONTINUING AS THE CHIEF COMPANY EXECUTIVE AT THE WILL OF THE COMPANY AND NOT THROUGH
THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER. PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT
THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING PROVISIONS SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS
OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS THE CHIEF COMPANY EXECUTIVE FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE IN
ANY WAY WITH PARTICIPANT’S RIGHT OR THE RIGHT OF THE COMPANY (OR THE PARENT OR SUBSIDIARY EMPLOYING OR RETAINING PARTICIPANT)
TO TERMINATE PARTICIPANT’S RELATIONSHIP AS THE CHIEF COMPANY EXECUTIVE OR AS A SERVICE PROVIDER OF THE COMPANY OR ANY PARENT
OR SUBSIDIARY OF THE COMPANY AT ANY TIME, WITH OR WITHOUT CAUSE.

 

12.            Clawback.
Notwithstanding any provisions to the contrary under this Agreement, the Option shall be subject to any clawback policy of the
Company currently in effect or that may be established and/or amended from time to time that applies to the Option (the “Clawback
Policy”); provided that the Clawback Policy does not discriminate solely against Participant except as required
by Applicable Laws, and provided further that if there is a conflict between the terms of the Option and the Clawback Policy,
the more stringent terms, as determined by the Administrator in good faith, shall apply. The Administrator may require Participant
to forfeit, return or reimburse the Company all or a portion of the Option and any amounts paid thereunder pursuant to the terms
of the Clawback Policy or as necessary or appropriate to comply with Applicable Laws.

 

    	 	13	 

     

    

 

13.            Address
for Notices. Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company, in care
of the Chairperson of the Compensation Committee of the Board, at Sorrento Therapeutics, Inc., 4955 Directors Place, San Diego,
CA 92121, or at such other address as the Company may hereafter designate in writing.

 

14.            Amendment;
No Repricing. This Agreement may be amended only by a written agreement executed by the Company and Participant. The provisions
of this Agreement may not be waived or modified unless such waiver or modification is in writing and signed by a representative
of the Administrator. The Company may not, without the approval of the stockholders of the Company (excluding Participant): (a) reduce,
reprice or take any other action relative to the Option that would be treated as a repricing under applicable listing rules of
The Nasdaq Stock Market LLC (or the rules of any other exchange on which the Common Stock is then traded); (b) cancel
the Option in exchange for cash or in exchange for any other option or other equity security with an exercise price that is less
than the exercise price of the Option; or (c) extend the exercise period of the Option beyond 10 years from the Date of Grant.

 

15.            Non-Transferability
of Option. The Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Participant only by Participant.

 

16.            Successors
and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement
shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth,
this Agreement shall be binding upon Participant and Participant’s heirs, legatees, legal representatives, executors, administrators,
successors and assigns. The rights and obligations of Participant under this Agreement may be assigned only with the prior written
consent of the Company.

 

17.            Additional
Conditions to Issuance of Stock. If at any time the Company will determine, in its discretion, that the listing, registration,
qualification or rule compliance of the Shares upon any securities exchange or under any state, federal or non-U.S. law,
the tax code and related regulations or under the rulings or regulations of the SEC or any other governmental regulatory body or
the clearance, consent or approval of the SEC or any other governmental regulatory authority (together, the “Issuance
Requirements”) is necessary or desirable as a condition to the purchase by, or issuance of Shares to, Participant
(or Participant’s estate) hereunder, such purchase or issuance will not occur unless and until such Issuance Requirements
will have been completed, effected or obtained free of any conditions not acceptable to the Company. Shares will not be issued
pursuant to the exercise of the Option unless the exercise of the Option and the issuance and delivery of such Shares will comply
with Applicable Laws and, to the extent the Company determines to be appropriate, will be further subject to the approval of counsel
for the Company with respect to such compliance. Subject to the terms of the Agreement, the Company shall not be required to issue
any certificate or certificates for Shares hereunder prior to the lapse of such reasonable period of time following the date of
exercise of the Option as the Administrator may establish from time to time for reasons of administrative convenience. The Company
will make all reasonable efforts to meet the Issuance Requirements. Assuming such satisfaction of the Issuance Requirements, for
income tax purposes the Exercised Shares will be considered transferred to Participant on the date the Option is exercised with
respect to such Exercised Shares. The inability of the Company to meet the Issuance Requirements deemed by the Company’s
counsel to be necessary or advisable for the issuance and sale of any Shares hereunder, will relieve the Company of any liability
in respect of the failure to issue or sell such Shares as to which such Issuance Requirements will not have been met. As a condition
to the exercise of the Option, the Company may require the person exercising the Option to represent and warrant at the time of
any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute
such Shares if, in the opinion of counsel for the Company, such a representation is required.

 

    	 	14	 

     

    

 

18.            Administrator
Authority. The Administrator will have the power and authority to construe and interpret this Agreement and to adopt such rules for
the administration, interpretation and application of the Agreement as are consistent therewith and to interpret or revoke any
such rules (including, but not limited to, the determination of whether or not any Shares subject to the Option have vested
and whether any Change in Control or any Acquisition has occurred). No acceleration of vesting of any portion of the Option will
be permitted on a discretionary basis without the approval of the Company’s stockholders. All actions taken and all interpretations
and determinations made by the Administrator in good faith will be final and binding upon Participant, the Company and all other
interested persons. No member of the Administrator will be personally liable for any action, determination or interpretation made
in good faith with respect to this Agreement.

 

19.            Electronic
Delivery. The Company may, in its sole discretion, decide to deliver any documents related to Options awarded under this Agreement
or future options that may be awarded by the Company by electronic means or request Participant’s consent to participate
in any equity-based compensation plan or program maintained by the Company by electronic means. Participant hereby consents to
receive such documents by electronic delivery and agrees to participate in such plan or program through any on-line or electronic
system established and maintained by the Company or another third party designated by the Company.

 

20.            Captions.
Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 

21.            Agreement
Severable. In the event that any provision in this Agreement will be held invalid or unenforceable, such provision will be
severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of
this Agreement.

 

22.            Modifications
to the Agreement. This Agreement constitutes the entire understanding of the parties on the subjects covered. Participant expressly
warrants that he or she is not accepting this Agreement in reliance on any promises, representations or inducements other than
those contained herein. Modifications to this Agreement can be made only in an express written contract executed by a duly authorized
officer of the Company. Notwithstanding anything to the contrary in this Agreement, the Company reserves the right to revise this
Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Code
Section 409A or otherwise to avoid imposition of any additional tax or income recognition under Code Section 409A in
connection with the Option.

 

    	 	15	 

     

    

 

23.            No
Waiver. Either party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed
as a waiver of any such provision or provisions, nor prevent that party from thereafter enforcing each and every other provision
of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party’s
right to assert all other legal remedies available to it under the circumstances.

 

24.            No
Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations
regarding this Agreement, the Option or Participant’s acquisition or sale of the underlying Shares. Participant is hereby
advised to consult with Participant’s own tax, legal and financial advisors regarding this Agreement before taking any action
related to this Agreement.

 

25.            Governing
Law and Venue. This Agreement shall be governed, construed, interpreted and enforced in accordance with its express terms,
and otherwise in accordance with the substantive laws of the State of California without reference to the principles of conflicts
of law of the State of California or any other jurisdiction, and where applicable, the laws of the United States. Any suit brought
hereon shall be brought in the state or federal courts sitting in San Diego, California, the Company and Participant hereby waiving
any claim or defense that such forum is not convenient or proper. Each of the Company and Participant hereby agrees that any such
court shall have in personam jurisdiction over him or it and consents to service of process in any manner authorized by California
law.

 

26.            Arbitration.
Both Participant and the Company agree to submit any and all disputes, controversies or claims based upon, relating to or arising
from this Agreement or the terms, interpretation, performance, breach or arbitrability thereof to final and binding arbitration
before a single neutral arbitrator in San Diego County, California. Subject to the terms of this paragraph, the arbitration proceedings
shall be initiated in accordance with, and governed by, the applicable rules (the “Rules”) for the
resolution of employment disputes of the American Arbitration Association (“AAA”) (such rules previously
referred to as the National Rules for the Resolution of Employment Disputes). Participant acknowledges that a copy of the
current Rules have been provided to him. The arbitrator shall be appointed by agreement of the parties hereto or, if no agreement
can be reached, by the AAA pursuant to its Rules. Notwithstanding the Rules, the parties hereto may take discovery in accordance
with Sections 1283.05(a)-(d) of the California Code of Civil Procedure (but not subject to the restrictions of Section 1283.05(e)),
and prior to the arbitration hearing the parties hereto may file, and the arbitrator shall rule on, pre-trial motions such
as demurrers and motions for summary judgment (applying the procedural standard embodied in Rule 56 of the Federal Rules of
Civil Procedure). The time for filing such motions shall be determined by the arbitrator. The arbitrator will rule on all
pre-trial motions at least ten (10) business days prior to the scheduled hearing date. Arbitration may be compelled, the arbitration
award shall be enforced, and judgment thereon shall be entered, pursuant to the California Arbitration Act (Code of Civil Procedure
 §§ 1280 et seq.). Each party to this Agreement shall bear his or its own attorneys’ fees and costs (including expert
witness fees) incurred in connection with the arbitration; provided, however, Participant and the Company agree that, to the extent
permitted by law, the arbitrator may, in his or her discretion, award reasonable attorneys’ fees to the prevailing party.
The Company shall bear all other costs and expenses of arbitration, including AAA’s administrative fees and the arbitrator’s
fees and costs. If either party hereto is required to compel arbitration of a dispute governed by this paragraph, the party prevailing
in that proceeding shall be entitled to recover from the other party reasonable costs and attorneys’ fees incurred to compel
arbitration. This Section 26 is intended to be the exclusive method for resolving any and all claims by Participant or the
Company against each other for payment of damages under this Agreement or relating to Participant’s employment or service;
provided, however, that neither this Agreement nor the submission to arbitration shall limit Participant’s
or the Company’s right to seek provisional relief, including without limitation injunctive relief, in any court of competent
jurisdiction. Both Participant and the Company expressly waive their respective rights to a jury trial.

 

********

 

    	 	16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00315-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00315-of-00352.parquet"}]]