Document:

exh_44.htm

Exhibit 4.4

 

SIGNAL GENETICS, INC.

 

2014 STOCK INCENTIVE PLAN

 

	
1.  

	
Establishment, Purpose and Types of Awards

 

Signal Genetics, Inc., a Delaware corporation (the “Company”), hereby establishes the Signal Genetics, Inc. 2014 Stock Incentive Plan (the “Plan”).  The purpose of the Plan is to promote the long-term growth and profitability of the Company by (i) providing key people with incentives to improve stockholder value and to contribute to the growth and financial success of the Company through their future services, and (ii) enabling the Company to attract, retain and reward the best-available personnel.

 

The Plan permits the granting of stock options (including incentive stock options qualifying under Code section 422 and nonstatutory stock options), stock appreciation rights, restricted or unrestricted stock awards, restricted stock units, performance awards, other stock-based awards, or any combination of the foregoing.

 

	
2.  

	
Definitions

 

Under this Plan, except where the context otherwise indicates, the following definitions apply:

 

(a) “Administrator” means the Board or the committee(s) or officer(s) appointed by the Board that have authority to administer the Plan as provided in Section 3 hereof.

 

(b) “Affiliate” means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, the Company (including, but not limited to, joint ventures, limited liability companies, and partnerships). For this purpose, “control” shall mean ownership of 50% or more of the total combined voting power or value of all classes of stock or interests of the entity, or the power to direct the management and policies of the entity, by contract or otherwise.

 

(c) “Award” means any stock option, stock appreciation right, stock award, restricted stock unit award, performance award, or other stock-based award.

 

(d) “Board” means the Board of Directors of the Company.

 

(e) “Change in Control” means: a (i) Change in Ownership of the Company, (ii) Change in Effective Control of the Company, or (iii) Change in the Ownership of Assets of the Company, as described herein and construed in accordance with Code section 409A.

 

(i) A Change in Ownership of the Company shall occur on the date that any one Person acquires, or Persons Acting as a Group acquire, ownership of the capital stock of the Company that, together with the stock held by such Person or Group, constitutes more than 50% of the total fair market value or total voting power of the capital stock of the Company. However, if any one Person is, or Persons Acting as a Group are, considered to own more than 50% of the total fair market value or total voting power of the capital stock of the Company, the acquisition of additional stock by the same Person or Persons Acting as a Group is not considered to cause a Change in Ownership of the Company or to cause a Change in Effective Control of the Company (as described below). An increase in the percentage of capital stock owned by any one Person, or Persons Acting as a Group, as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock.

 

  

 

  

(ii) A Change in Effective Control of the Company shall occur on the date a majority of members of the Company’s Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board before the date of the appointment or election.

 

(iii) A Change in the Ownership of Assets of the Company shall occur on the date that any one Person acquires, or Persons Acting as a Group acquire (or has or have acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons), assets from the Company that have a total gross fair market value of more than 50% of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

 

The following rules of construction apply in interpreting the definition of Change in Control:

 

(A) A Person means any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than employee benefit plans sponsored or maintained by the Company and by entities controlled by the Company or an underwriter of the capital stock of the Company in a registered public offering.

 

(B) Persons will be considered to be Persons Acting as a Group (or Group) if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the corporation.  If a Person owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a Group with other shareholders only with respect to the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation. Persons will not be considered to be acting as a Group solely because they purchase assets of the same corporation at the same time or purchase or own stock of the same corporation at the same time, or as a result of the same public offering.

 

(C) For purposes of this Section 2(e), fair market value shall be determined by the Administrator.

 

(D) A Change in Control shall not include a transfer to a related person as described in Code section 409A or a public offering of capital stock of the Company.

 

(E) For purposes of this Section 2(e), Code section 318(a) applies to determine stock ownership. Stock underlying a vested option is considered owned by the individual who holds the vested option (and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option). For purposes of the preceding sentence, however, if a vested option is exercisable for stock that is not substantially vested (as defined by Treasury Regulation §1.83­3(b) and (j)), the stock underlying the option is not treated as owned by the individual who holds the option.

 

(f) “Code” means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

 

  

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(g) “Common Stock” means shares of common stock of the Company, par value of $0.01 per share.

 

(h) “Fair Market Value” means, with respect to the Common Stock, as of any date:

 

(i) if the principal market for the Common Stock (as determined by the Administrator if the Common Stock is listed or admitted to trading on more than one exchange or market) is a national securities exchange or an established securities market, the official closing price per share of Common Stock for the regular market session on that date on the principal exchange or market on which the Common Stock is then listed or admitted to trading or, if no sale is reported for that date, on the last preceding day on which a sale was reported;

 

(ii) if the principal market for the Common Stock is not a national securities exchange or an established securities market, the average of the highest bid and lowest asked prices for the Common Stock on that date as reported on a national quotation system or, if no prices are reported for that date, on the last preceding day on which prices were reported; or

 

(iii) if the Common Stock is neither listed nor admitted to trading on a national securities exchange or an established securities market, nor quoted by a national quotation system, the value determined by the Administrator in good faith.

 

With respect to property other than Common Stock, Fair Market Value means the value of the property determined by such methods or procedures to be established from time to time by the Board in accordance with Code section 409A.

 

(i) “Full-Value Award” means any Award other than (i) a stock option, (ii) a stock appreciation right or (iii) any other Award for which the Holder pays the intrinsic value existing as of the date of grant (whether directly or by forgoing a right to receive a payment from the Company or any subsidiary).

 

(j) “Grant Agreement” means a written document, including an electronic writing acceptable to the Administrator, memorializing the terms and conditions of an Award granted pursuant to the Plan and which shall incorporate the terms of the Plan.

 

(k) “Performance Measures” mean criteria established by the Administrator relating to any of the following, as it may apply to an individual, one or more business units, divisions or subsidiaries, or on a Company-wide basis, and in either absolute terms or relative to the performance of one or more comparable companies or an index covering multiple companies:

 

(i) Earnings or Profitability Metrics: including, but not limited to, earnings/loss (gross, operating, net, or adjusted); earnings/loss before interest and taxes (“EBIT”);  earnings/loss before interest, taxes, depreciation and amortization (“EBITDA”);  profit margins; expense levels or ratios; in each case adjusted to eliminate the effect of any one or more of the following: interest expense, asset impairments, early extinguishment of debt, stock-based compensation expense, changes in generally accepted accounting principles or critical accounting policies, or other extraordinary or non-recurring items, as specified by the plan administrator when establishing the performance goals;

 

(ii) Return Metrics: including, but not limited to, return on investment, assets, equity or capital (total or invested);

 

  

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(iii) Cash Flow Metrics: including, but not limited to, operating cash flow; cash flow sufficient to achieve financial ratios or a specified cash balance; free cash flow; cash flow return on capital; net cash provided by operating activities; cash flow per share; working capital;

 

(iv) Liquidity Metrics: including, but not limited to, capital raising; debt reduction; extension of maturity dates of outstanding debt; debt leverage (debt to capital, net debt-to-capital, debt-to-EBITDA or other liquidity ratios) or access to capital; debt ratings; total or net debt; other similar measures approved by the plan administrator;

 

(v) Stock Price and Equity Metrics: including, but not limited to, return on stockholders’ equity; total stockholder return; revenue (gross, operating or net); revenues from sales; revenues from search model; revenue growth; stock price; stock price appreciation; market capitalization; earnings/loss per share (basic or diluted) (before or after taxes); price-to-earnings ratio;

 

(vi) Strategic Metrics: including, but not limited to, number of users, site traffic, conversion ratios, product research and development; regulatory filings or approvals; patent application or issuance; manufacturing or process development; sales or net sales; geographic coverage; market share; market penetration; inventory control; growth in assets; key hires; business expansion; acquisitions, divestitures, affiliate agreements, collaborations, licensing or joint ventures; financing; resolution of significant litigation; legal compliance or risk reduction.

 

	
3.  

	
Administration

 

(a) Administration of the Plan.  The Plan shall be administered by the Board or by such committee or committees as may be appointed by the Board from time to time. To the extent allowed by applicable state law, the Board by resolution may authorize an officer or officers to grant Awards (other than Stock Awards) to other officers and employees of the Company and its Affiliates, and, to the extent of such authorization, such officer or officers shall be the Administrator.

 

(b) Powers of the Administrator.  The Administrator shall have all the powers vested in it by the terms of the Plan, such powers to include authority, in its sole and absolute discretion, to grant Awards under the Plan, prescribe Grant Agreements evidencing such Awards and establish programs for granting Awards.

 

The Administrator shall have full power and authority to take all other actions necessary to carry out the purpose and intent of the Plan, including, but not limited to, the authority to: (i) determine the eligible persons to whom, and the time or times at which Awards shall be granted; (ii) determine the types of Awards to be granted; (iii) determine the number of shares to be covered by or used for reference purposes for each Award; (iv) impose such terms, limitations, restrictions and conditions upon any such Award as the Administrator shall deem appropriate; (v) modify, amend, extend or renew outstanding Awards, or accept the surrender of outstanding Awards and substitute new Awards (provided, however, that, except as provided in Section 6 or 7(e) of the Plan, any modification that would materially adversely affect any outstanding Award shall not be made without the consent of the holder and no such modification, amendment or substitution that results in repricing the Award, within the meaning of the Nasdaq Marketplace Rule 5635(c) and IM-5635-1, or any successor provision, shall be made without prior stockholder approval); (vi) accelerate or otherwise change the time in which an Award may be exercised or becomes payable and to waive or accelerate the lapse, in whole or in part, of any restriction or condition with respect to such Award, including, but not limited to, any restriction or condition with respect to the vesting or exercisability of an Award following termination of any grantee’s employment or other relationship with the Company;  provided, however, that no such waiver or acceleration of lapse restrictions shall be made with respect to a performance-based stock award granted to an executive officer of the Company if such waiver or acceleration is inconsistent with Code section 162(m); (vii) establish objectives and conditions, if any, for earning Awards and determining whether Awards will be paid with respect to a performance period; (viii) for any purpose, including but not limited to, qualifying for preferred tax treatment under foreign tax laws or otherwise complying with the regulatory requirements of local or foreign jurisdictions, to establish, amend, modify, administer or terminate sub-plans, and prescribe, amend and rescind rules and regulations relating to such sub-plans; (ix) interpret and administer the Plan and any instrument or agreement relating to, or Award made under the Plan; (x) correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent it shall deem expedient to carry the Plan into effect; and (xi) make any other determination and take any other action that the Administrator deems necessary or desirable for the administration of the Plan.  All decisions and determinations of the Administrator shall be final, conclusive and binding on the Company, the participants in the Plan and any and all interested parties.

 

  

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The Administrator shall have full power and authority, in its sole and absolute discretion, to administer, construe and interpret the Plan, Grant Agreements and all other documents relevant to the Plan and Awards issued thereunder, to establish, amend, rescind and interpret such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Administrator deems necessary or advisable, and to correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent the Administrator shall deem it desirable to carry it into effect.

 

(c) Non-Uniform Determinations.  The Administrator’s determinations under the Plan (including without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the Grant Agreements evidencing such Awards) need not be uniform and may be made by the Administrator selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.

 

(d) Limited Liability.  To the maximum extent permitted by law, no member of the Administrator shall be liable for any action taken or decision made in good faith relating to the Plan or any Award thereunder.

 

(e) Indemnification.  To the maximum extent permitted by law and by the Company’s charter and by­laws, the members of the Administrator shall be indemnified by the Company in respect of all their activities under the Plan.

 

(f) Effect of Administrator’s Decision.  All actions taken and decisions and determinations made by the Administrator on all matters relating to the Plan pursuant to the powers vested in it hereunder shall be in the Administrator’s sole and absolute discretion and shall be conclusive and binding on all parties concerned, including the Company, its stockholders, any participants in the Plan and any other employee, consultant, or director of the Company, and their respective successors in interest.

 

	
4.  

	
Shares Available for the Plan; Maximum Awards

 

(a) Subject to adjustments as provided in Section 7(e) of the Plan, the aggregate number of shares of Common Stock that may be issued with respect to Awards granted under the Plan is 1,124,852; provided, however, that no more than 1,000,000 shares of Common Stock may be issued in the form of Full-Value Awards, and no more than 600,000 shares of Common Stock may be issued pursuant to incentive stock options intended to qualify under Code section 422. If any Award, or portion of an Award, under the Plan expires or terminates unexercised, becomes unexercisable, is settled in cash without delivery of shares of Common Stock, or is forfeited or otherwise terminated, surrendered or canceled as to any shares, or if any shares of Common Stock are repurchased by or surrendered to the Company in connection with any Award (whether or not such surrendered shares were acquired pursuant to any Award), or if any shares are withheld by the Company, the shares subject to such Award and the repurchased, surrendered and withheld shares shall thereafter be available for further Awards under the Plan; provided, however, that any such shares that are surrendered to or repurchased or withheld by the Company in connection with any Award or that are otherwise forfeited after issuance shall not be available for purchase pursuant to incentive stock options intended to qualify under Code section 422.

 

  

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(b) Subject to adjustments as provided in Section 7(e) of the Plan, the maximum number of shares of Common Stock subject to Awards of any combination that may be granted during any one fiscal year of the Company to any one individual under this Plan shall be limited to 750,000 shares. Such per-individual limit shall not be adjusted to effect a restoration of shares of Common Stock with respect to which the related Award is terminated, surrendered or canceled.

 

	
5.  

	
Participation

 

Participation in the Plan shall be open to all employees, officers, and directors of, and other individuals providing bona fide services to or for, the Company, or of any Affiliate of the Company, as may be selected by the Administrator from time to time. The Administrator may also grant Awards to individuals in connection with hiring, retention or otherwise, prior to the date the individual first performs services for the Company or an Affiliate, provided that such Awards shall not become vested or exercisable, and no shares shall be issued to such individual, prior to the date the individual first commences performance of such services.

 

	
6.  

	
Awards

 

The Administrator, in its sole discretion, establishes the terms of all Awards granted under the Plan.  Awards may be granted individually or in tandem with other types of Awards, concurrently with or with respect to outstanding Awards.  All Awards are subject to the terms and conditions provided in the Grant Agreement.

 

(a) Stock Options.  The Administrator may from time to time grant to eligible participants Awards of incentive stock options as that term is defined in Code section 422 or nonstatutory stock options; provided, however, that Awards of incentive stock options shall be limited to employees of the Company or of any current or hereafter existing “parent corporation” or “subsidiary corporation,” as defined in Code sections 424(e) and (f), respectively, of the Company and any other individuals who are eligible to receive incentive stock options under the provisions of Code section 422. Options must have an exercise price at least equal to Fair Market Value (110% of Fair Market Value for incentive stock options if the grantee is a 10% stockholder within the meaning of Code section 422) as of the date of grant and may not have a term in excess of ten years’ duration (five years’ duration for incentive stock options if the grantee is a 10% stockholder within the meaning of Code section 422). The Administrator shall not reduce the exercise price of an outstanding stock option, whether through amendment, cancellation or replacement of such stock option, unless such reduction is consistent with Code section 409A and other applicable law and is approved by the stockholders of the Company.  No stock option shall be an incentive stock option unless so designated by the Administrator at the time of grant or in the Grant Agreement evidencing such stock option.

 

  

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(b) Stock Appreciation Rights.  The Administrator may from time to time grant to eligible participants Awards of Stock Appreciation Rights (“SAR”). An SAR entitles the grantee to receive, subject to the provisions of the Plan and the Grant Agreement, a payment having an aggregate value equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one share of Common Stock over (B) the base price per share specified in the Grant Agreement, times (ii) the number of shares specified by the SAR, or portion thereof, which is exercised. The base price per share specified in the Grant Agreement shall not be less than the lower of the Fair Market Value on the grant date or the exercise price of any tandem stock option Award to which the SAR is related.  The Administrator shall not reduce the exercise price of an outstanding SAR, whether through amendment, cancellation or replacement of such SAR, unless such reduction consistent with Code section 409A and other applicable law and is approved by the stockholders of the Company.  No SAR shall have a term longer than ten years’ duration. Payment by the Company of the amount receivable upon any exercise of an SAR may be made by the delivery of Common Stock or cash, or any combination of Common Stock and cash, as determined in the sole discretion of the Administrator. If upon settlement of the exercise of an SAR a grantee is to receive a portion of such payment in shares of Common Stock, the number of shares shall be determined by dividing such portion by the Fair Market Value of a share of Common Stock on the exercise date. No fractional shares shall be used for such payment and the Administrator shall determine whether cash shall be given in lieu of such fractional shares or whether such fractional shares shall be eliminated.

 

(c) Stock Awards.

 

(i) The Administrator may from time to time grant stock awards to eligible participants in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as it shall determine. A stock award may be denominated in Common Stock or other securities, stock-equivalent units or restricted stock units, securities or debentures convertible into Common Stock, or any combination of the foregoing and may be paid in Common Stock or other securities, in cash, or in a combination of Common Stock or other securities and cash, all as determined in the sole discretion of the Administrator.

 

(ii) The Administrator may grant stock awards in a manner constituting “qualified performance­based compensation” within the meaning of Code section 162(m). The grant of, or lapse of restrictions with respect to, such performance-based stock awards shall be based upon one or more Performance Measures and objective performance targets to be attained relative to those Performance Measures, all as determined by the Administrator.  Performance targets may include minimum, maximum, intermediate and target levels of performance, with the size of the performance-based stock award or the lapse of restrictions with respect thereto based on the level attained. A performance target may be stated as an absolute value or as a value determined relative to prior performance, one or more indices, budget, one or more peer group companies, any other standard selected by the Administrator, or any combination thereof.  The Administrator shall be authorized to make adjustments in the method of calculating attainment of Performance Measures and performance targets in recognition of: (A) extraordinary or non-recurring items; (B) changes in tax laws; (C) changes in generally accepted accounting principles or changes in accounting policies; (D) charges related to restructured or discontinued operations; (E) restatement of prior period financial results; and (F) any other unusual, non­recurring gain or loss that is separately identified and quantified in the Company’s financial statements; provided that the Administrator’s decision as to whether such adjustments will be made with respect to any  “covered employee”, within the meaning of Code section 162(m), is determined when the performance targets are established for the applicable performance period. Notwithstanding the foregoing, the Administrator may, at its sole discretion, modify the performance results upon which Awards are based under the Plan to offset any unintended results arising from events not anticipated when the Performance Measures and performance targets were established; provided, that such modifications may be made with respect to an Award granted to any covered employee, within the meaning of Code section 162(m), only to the extent permitted by Code section 162(m) if the Award was intended to constitute “qualified performance­based compensation” within the meaning of Code section 162(m). Notwithstanding anything in the Plan to the contrary, the Administrator is not authorized to waive or accelerate the lapse of restrictions on a performance-based stock award granted to any covered employee, within the meaning of Code section 162(m), except upon death, disability or a change of ownership or control of the Company. In the event that a Change in Control occurs after a performance-based stock award has been granted but before completion of the applicable performance period, a pro rata portion of such Award shall become payable (or a pro rata portion of the lapse restrictions shall lapse, as applicable) as of the date of the Change in Control to the extent otherwise earned on the basis of achievement of the pro rata portion of the Performance Measures and performance targets relating to the portion of the performance period completed as of the date of the Change in Control.

 

  

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7.  

	
Miscellaneous

 

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

 

(b) Withholding of Taxes.  Grantees and holders of Awards shall pay to the Company or its Affiliate, or make provision satisfactory to the Administrator for payment of, any taxes required to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability. The Company or its Affiliate may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the grantee or holder of an Award. In the event that payment to the Company or its Affiliate of such tax obligations is made in shares of Common Stock, such shares shall be valued at Fair Market Value on the applicable date for such purposes and shall not exceed in amount the minimum statutory tax withholding obligation.

 

(c) Loans.  To the extent otherwise permitted by law, the Company or its Affiliate may make or guarantee loans to grantees to assist grantees in exercising Awards and satisfying any withholding tax obligations.

 

  

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(d) Transferability.  Except as otherwise determined by the Administrator, no Award granted under the Plan may be assigned or transferred, hypothecated or encumbered, in whole or in part, either directly or by operation of law or otherwise, including, but not limited to, by execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner, except transfer by will or by the laws of descent and distribution.  All rights with respect to Awards granted under the Plan shall be exercisable during the participant’s lifetime only by the participant or the participant’s guardian or legal representative.

 

(e) Adjustments for Corporate Transactions and Other Events.

 

(i) Stock Dividend, Stock Split and Reverse Stock Split. In the event of a stock dividend of, or stock split or reverse stock split affecting, the Common Stock, (A) the maximum number of shares of such Common Stock as to which Awards may be granted under this Plan and the maximum number of shares with respect to which Awards may be granted during any one fiscal year of the Company to any individual, as provided in Section 4 of the Plan, and (B) the number of shares covered by and the exercise price and other terms of outstanding Awards, shall, without further action of the Board, be adjusted to reflect such event. The Administrator may make adjustments, in its discretion, to address the treatment of fractional shares and fractional cents that arise with respect to outstanding Awards as a result of the stock dividend, stock split or reverse stock split.

 

(ii) Non-Change in Control Transactions.  Except with respect to the transactions set forth in Section 7(e)(i), in the event of any change affecting the Common Stock, the Company or its capitalization, by reason of a spin-off, split-up, dividend, recapitalization, merger, consolidation or share exchange, other than any such change that is part of a transaction resulting in a Change in Control of the Company, the Administrator, in its discretion and without the consent of the holders of the Awards, shall make (A) appropriate adjustments to the maximum number and kind of shares reserved for issuance or with respect to which Awards may be granted under the Plan, in the aggregate and with respect to any individual during any one fiscal year of the Company, as provided in Section 4 of the Plan; and (B) any adjustments in outstanding Awards, including but not limited to modifying the number, kind and price of securities subject to Awards.

 

(iii) Change in Control Transactions. In the event of any transaction resulting in a Change in Control of the Company, outstanding stock options and other Awards that are payable in or convertible into Common Stock under this Plan will terminate upon the effective time of such Change in Control unless provision is made in connection with the transaction for the continuation or assumption of such Awards by, or for the substitution of the equivalent awards, as determined in the sole discretion of the Administrator, of, the surviving or successor entity or a parent thereof. In the event of such termination, the holders of stock options and other Awards under the Plan will be permitted, immediately before the Change in Control, to exercise or convert all portions of such stock options or other Awards under the Plan that are then exercisable or convertible or which become exercisable or convertible upon or prior to the effective time of the Change in Control.

 

(iv) Unusual or Non-recurring Events.  The Administrator is authorized to make, in its discretion and without the consent of holders of Awards, adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or non-recurring events affecting the Company, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.

 

  

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(f) Substitution of Awards in Mergers and Acquisitions.  Awards may be granted under the Plan from time to time in substitution for awards held by employees, officers, consultants or directors of entities who become or are about to become employees, officers, consultants or directors of the Company or an Affiliate as the result of a merger or consolidation of the employing entity with the Company or an Affiliate, or the acquisition by the Company or an Affiliate of the assets or stock of the employing entity.  The terms and conditions of any substitute Awards so granted may vary from the terms and conditions set forth herein to the extent that the Administrator deems appropriate at the time of grant to conform the substitute Awards to the provisions of the awards for which they are substituted.

 

(g) Termination, Amendment and Modification of the Plan.  The Board may terminate, amend or modify the Plan or any portion thereof at any time. Except as otherwise determined by the Board, termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

 

(h) No Stockholders Rights.  Except as otherwise provided herein, a participant shall have none of the rights of a stockholder with respect to shares of Common Stock covered by any Award until the participant becomes the record owner of such shares of Common Stock.

 

(i) Issuance of Shares; Paperless Administration.  Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by any applicable law, rule or regulation, the Company may choose to not deliver to any participant certificates evidencing shares issued in connection with any Award and instead record such shares in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).  In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a participant may be permitted through the use of such an automated system.

 

(j) Effect of Plan upon Other Compensation Plans.  The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any subsidiary.  Nothing in the Plan shall be construed to limit the right of the Company or any subsidiary:  (a) to establish any other forms of incentives or compensation for employees, directors or other service providers of the Company or any subsidiary, or (b) to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate purpose including without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm or association.  No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any subsidiary except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

 

(k) Non-Guarantee of Employment or Service.  Nothing in the Plan or in any Grant Agreement thereunder shall confer any right on an individual to continue in the service of the Company or shall interfere in any way with the right of the Company to terminate such service at any time with or without cause or notice and whether or not such termination results in (i) the failure of any Award to vest; (ii) the forfeiture of any unvested or vested portion of any Award; and/or (iii) any other adverse effect on the individual’s interests under the Plan.

 

  

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(l) Compliance with Securities Laws; Listing and Registration.  If at any time the Administrator determines that the delivery of Common Stock under the Plan is or may be unlawful under the laws of any applicable jurisdiction, or Federal, state or foreign securities laws, the right to exercise an Award or receive shares of Common Stock pursuant to an Award shall be suspended until the Administrator determines that such delivery is lawful. If at any time the Administrator determines that the delivery of Common Stock under the Plan is or may violate the rules of the national exchange on which the shares are then listed for trade, the right to exercise an Award or receive shares of Common Stock pursuant to an Award shall be suspended until the Administrator determines that such delivery would not violate such rules. The Company shall have no obligation to effect any registration or qualification of the Common Stock under Federal, state or foreign laws.

 

The Company may require that a grantee, as a condition to exercise of an Award, and as a condition to the delivery of any share certificate, make such written representations (including representations to the effect that such person will not dispose of the Common Stock so acquired in violation of Federal, state or foreign securities laws) and furnish such information as may, in the opinion of counsel for the Company, be appropriate to permit the Company to issue the Common Stock in compliance with applicable Federal, state or foreign securities laws. The stock certificates for any shares of Common Stock issued pursuant to this Plan may bear a legend restricting transferability of the shares of Common Stock unless such shares are registered or an exemption from registration is available under the Securities Act of 1933, as amended, and applicable state or foreign securities laws.

 

(m) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a grantee or any other person. To the extent that any grantee or other person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.

 

(n) Governing Law.  The validity, construction and effect of the Plan, of Grant Agreements entered into pursuant to the Plan, and of any rules, regulations, determinations or decisions made by the Administrator relating to the Plan or such Grant Agreements, and the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance with applicable federal laws and the laws of the State of Delaware, without regard to its conflict of laws principles.

 

(o) 409A Savings Clause.  The Plan and all Awards granted hereunder are intended to comply with, or otherwise be exempt from, Code section 409A. The Plan and all Awards granted under the Plan shall be administered, interpreted, and construed in a manner consistent with Code section 409A to the extent necessary to avoid the imposition of additional taxes under Code section 409A(a)(1)(B). Should any provision of the Plan, any Award Agreement, or any other agreement or arrangement contemplated by the Plan be found not to comply with, or otherwise be exempt from, the provisions of Code section 409A, such provision shall be modified and given effect (retroactively if necessary), in the sole discretion of the Administrator, and without the consent of the holder of the Award, in such manner as the Administrator determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Code section 409A. Notwithstanding anything to the contrary in the Plan, to the extent required to avoid accelerated taxation and tax penalties under section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following the participant’s separation from service shall instead be paid on the first payroll date after the six-month anniversary of the participant’s separation from service (or the participant’s death, if earlier).  Notwithstanding anything in the Plan to the contrary, in no event shall the Administrator exercise its discretion to accelerate the payment or settlement of an Award where such payment or settlement constitutes deferred compensation within the meaning of Code section 409A unless, and solely to the extent that, such accelerated payment or settlement is permissible under Treasury Regulation section 1.409A-3(j)(4) or any successor provision.

 

  

-11-

  

(p) Participants Subject to Taxation Outside the United States.  With respect to participants who are believed by the Administrator to be subject to taxation in countries other than the United States, the Administrator may make grants on such terms and conditions, consistent with the Plan, as the Administrator deems appropriate to comply with the laws of the applicable countries, and the Administrator may create such procedures, addenda and subplans and make such modifications as may be necessary or advisable to comply with such laws. The Board may amend the Plan in such manner as may be necessary to enable the Plan to achieve its stated purposes in any jurisdiction outside the United States in a tax-efficient manner and in compliance with local rules and regulations. Furthermore, if any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Administrator, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Administrator, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

 

(q) Effective Date; Termination Date.  The Plan is effective as of the date on which the Plan is adopted by the Board, subject to approval of the stockholders within twelve months before or after such date. No Award shall be granted under the Plan after the close of business on the day immediately preceding the tenth anniversary of the effective date of the Plan, or if earlier, the tenth anniversary of the date this Plan is approved by the stockholders. Subject to other applicable provisions of the Plan, all Awards made under the Plan prior to such termination of the Plan shall remain in effect until such Awards have been satisfied or terminated in accordance with the Plan and the terms of such Awards.

 

PLAN APPROVAL

 

Date Approved by the Board:                 June 17, 2014

 

Date Approved by the Stockholders:    June 17, 2014

 

 

 

-12-exh_45.htm

Exhibit 4.5

 

Grant No. __________

 

SIGNAL GENETICS, INC.

 

STOCK OPTION GRANT AGREEMENT

UNDER THE 2014 STOCK INCENTIVE PLAN

 

This Stock Option Grant Agreement (this “Grant Agreement”), is made and entered into as of the date of grant set forth below (the “Date of Grant”) by and between Signal Genetics, Inc., a Delaware corporation (the “Company”), and the participant named below (the “Participant”), pursuant to the Signal Genetics, Inc. 2014 Stock Incentive Plan (the “Plan”).  Capitalized terms not defined herein have the meanings ascribed to them in the Plan.  Where the context permits, references to the Company include any successor to the Company.

 

Name of Participant:  _________________________________

 

Social Security No.:   _________________________________

 

Number of Shares Subject to Option: _____________________

 

Exercise Price Per Share: ______________________________

 

Date of Grant: ______________________________________

 

Expiration Date:  Ten (10) years from Date of Grant

 

Classification of Option (check one):      ☐ Incentive Stock Option        ☐ Nonstatutory Stock Option

 

Vesting Schedule:

 

	
Percentage of the Option Award Vesting

	
Anniversary Date

	
25%

	
First anniversary of the Date of Grant

	
25%

	
Second anniversary of the Date of Grant

	
25%

	
Third anniversary of the Date of Grant

	
25%

	
Fourth anniversary of the Date of Grant

 

1. Grant of Options.  The Company hereby grants to the Participant an option (the “Option”) to purchase the total number of shares of Common Stock set forth above (the “Shares”) at the Exercise Price Per Share set forth above, which may not be less than the Fair Market Value of the Common Stock on the Date of Grant (the “Exercise Price”), subject to all of the terms and conditions of this Grant Agreement and the Plan.  The term of the Option commences on the Date of Grant above and, unless previously terminated as described in this Grant Agreement, terminates on the Expiration Date set forth above.

 

2. Vesting and Exercisability.

 

(a)           Subject to the provisions of Sections 2(b), (c) and (d), this Option Award will vest and become exercisable in accordance with the vesting schedule set forth above, if the Participant remains in continuous service with the Company as of each applicable anniversary date (each, an “Anniversary Date”) and has not received a notice of termination from the Company prior to such Anniversary Date.

 

(b)           Upon Participant’s termination from service with the Company for any reason prior to the first anniversary of the Date of Grant, with or without Cause (as defined below) or by mutual agreement, the Participant shall immediately forfeit any right to vest in the Option, the Option shall terminate and this Grant Agreement will be of no further effect.

 

  

 

  

(c)           If, following the first anniversary of the Date of Grant, the Participant’s service with the Company is terminated for any reason other than termination by the Company for Cause, and Participant has not received a notice of termination from the Company for Cause as of such separation date, (i) a prorated portion of the portion of the Option which otherwise would have become vested and exercisable on the next Anniversary Date shall become immediately vested and exercisable, and (ii) such prorated portion of the Option, as well as any other vested and unexercised portion of the Option, will be exercisable to the extent specified in Paragraph 3.  For purposes of this Paragraph 2(c), the prorated portion shall be determined by dividing the number of complete calendar months the Participant has served with the Company since the most recent Anniversary Date by twelve.

 

(d)           If a Participant’s service to the Company is terminated for Cause at any time, all of such Participant’s rights to exercise the Option (whether vested or unvested) shall terminate on the date of such termination of service and this Grant Agreement will be of no further force or effect.

 

(e)           For purposes of this Grant Agreement, “Cause” shall have the meaning ascribed to such term in any employment agreement between Participant and the Company, or, if no such agreement exists, then “Cause” shall mean:  (i) a material breach by the Participant of his or her fiduciary or other duties to the Company; (ii) a material breach or violation by the Participant of the terms of this Grant Agreement or any other agreement between the Participant and the Company, or of any of the Company’s policies, practices, or procedures, which remains uncured for a period of 30 days following the Participant’s receipt of written notice specifying the nature of the breach or violation, or, where such breach or violation is not subject to or capable of cure, effective immediately; (iii) the commission by the Participant of any act of embezzlement, fraud, larceny or theft on or from the Company; (iv) substantial and continuing willful neglect or inattention by the Participant of the duties of his or her employment or other service, refusal to perform the lawful and reasonable directives of superiors, or the willful misconduct or gross negligence of the Participant in connection with the performance of such duties which remain uncured for a period of 30 days following the Participant’s receipt of written notice specifying the nature of the misconduct, or, where such misconduct is not subject to or capable of cure, effective immediately; (v) the commission by the Participant of any crime involving moral turpitude or a felony; or (vi) the Participant’s performance or omission of any act which, in the judgment of the Company, if known to the customers, clients, stockholders or any regulators of the Company, would have a material adverse impact on the business of the Company.

 

3. Exercise of Option.  The Option may be exercised only to the extent it has become vested and exercisable pursuant to Paragraph 2 above, and then such vested and exercisable portion may be exercised in whole or in part, at any time, by delivery of a notice of exercise and payment of the exercise price in accordance with the terms of the Plan and in the manner specified by the Administrator.  The exercise price shall be equal to the Exercise Price Per Share set forth above, multiplied by the number of Shares with respect to which the Option is being exercised.  The Option must be exercised, if at all, on or prior to the earlier of:

 

(a)           three (3) months following the Participant’s termination of service for any reason (other than Cause); and

 

(b)           the Expiration Date;

 

and if not exercised prior thereto, shall terminate and no longer be exercisable.  Any unvested portion of the Option shall terminate immediately upon the Participant’s termination from service.  Upon the Participant’s termination from service by the Company for Cause, the Option, whether vested or unvested, shall immediately terminate and be forfeited, and shall not be exercisable.

 

  

2

  

4. Nontransferability.  The Option Award issued pursuant to this Grant Agreement may not be assigned, transferred, hypothecated, or encumbered, in whole or in part, either directly or by operation of law or otherwise including, but not limited to, by execution, levy, garnishment, attachment, pledge, bankruptcy, or in any other manner, except transfer by will or by the laws of descent and distribution.  All rights with respect to the Option shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian or legal representative.

 

5. No Stockholder Rights Prior to Issuance.  The Participant shall have no rights as a stockholder of the Company with respect to any Shares underlying this Option Award until the Option is validly exercised and Shares are issued (as evidenced by the appropriate entry on the books of the Company or a duly authorized transfer agent of the Company).  Unless otherwise required by the Plan, no adjustment shall be made for dividends, distributions, or other rights for which the record date is prior to the date, if any, that the Option is exercised and the Shares are issued.

 

6. No Employment or Other Rights.  Nothing in the Plan or this Grant Agreement confers upon the Participant any right to continue in the employ or service of the Company or any Affiliate or will interfere with or restrict the right of the Company (or of an Affiliate) to terminate the Participant’s employment or services at any time and for any reason whatsoever, with or without Cause.  Participation in the Plan is voluntary.  The grant of this Option Award does not create any contractual or other right to receive any subsequent Award under the Plan; future grants, if any, will be at the sole discretion of the Company.  Further, the value of the Option Award is an extraordinary item of compensation, which is not part of the Participant’s normal or expected compensation for purposes of any benefit plan or program of the Company or any Affiliate (unless such plan or program specifically provides otherwise).

 

7. Tax Withholding.  The Company is entitled to require a cash payment by or on behalf of the Participant and/or to withhold an appropriate number of Shares from any Option exercised hereunder and/or to deduct from other compensation payable to the Participant to satisfy any sums required by federal, state, or local tax law to be withheld or to satisfy any applicable payroll deductions with respect to the grant, vesting, or exercise of the Option.  The Company may refuse to deliver Shares or permit exercise of the Option to the extent the Participant fails to make appropriate accommodation for his or her tax obligations.

 

8. No Compensation Deferral.  This Option Award is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code.  The Exercise Price Per Share of the Option shall not be less than the Fair Market Value of the Common Stock on the Date of Grant.

 

9. Incentive Stock Option Provisions.  If, and only if, this Option Award is designated as an incentive stock option in this Grant Agreement, the following provisions apply:  This Option is intended to qualify as an “incentive stock option” as defined in Section 422 of the Code to the extent permitted under applicable law.  Accordingly, the Participant understands that in order to obtain the benefits of an incentive stock option under Section 422 of the Code, no sale or other disposition may be made of Shares for which incentive stock option treatment is desired within the one year period beginning on the day after the day of the transfer of such Shares to him or her, nor within the two year period beginning on the Date of Grant, and all other requirements of Section 422 of the Code must be satisfied.  If the Participant disposes of any such Shares (whether by sale, gift, transfer or otherwise) within either of these periods, he or she must notify the Company within 30 days.  The Participant also agrees to provide the Company with any information concerning any such dispositions required by the Company for tax purposes.  Further, to the extent that this Option together with any other incentive stock options of the Participant vest in any year having an aggregate Fair Market Value in excess of $100,000 (determined as of the Grant Date), such options will not qualify as incentive stock options.

 

  

3

  

10. Notices.  Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address of such party set forth in this Grant Agreement or at such other address as such party may designate in writing from time to time to the other party.  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means or request the Participant’s consent to participate in the Plan by electronic means.  The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through any online or electronic system established and maintained by the Company or another third party designated by the Company.

 

11. Tax and Legal Advice.  The Participant acknowledges that he or she has had the opportunity to seek the advice of counsel and other personal advisers, and that the Company has provided no advice to, or made any warranties or representations with respect to, the tax consequences of the transactions contemplated by this Grant Agreement or the economic or other impacts to the Participant of the arrangements contemplated hereby.  The Participant is in no respect relying on the Company or its representatives for an assessment of such tax, legal, economic, or other consequences.  Without limiting the generality of the foregoing, if the Option is designated as an “incentive stock option” in this Grant Agreement, such designation is not a representation or warranty by the Company or the Administrator that the Option qualifies as such, either at the time of grant or upon exercise thereof, or that the Participant is entitled to any particular tax treatment in connection with the exercise of the Option or subsequent disposition of such Shares.

 

12. Participant Restrictive Covenants.  By accepting this Award, the Participant hereby agrees as follows:

 

(a) Confidentiality.  The Participant recognizes and acknowledges that the Participant will have access to Confidential Information (as defined below) relating to the business or interests of the Company or of persons with whom the Company may have business relationships.  Except as permitted herein or as may be approved by the Company from time to time, the Participant will not use or disclose to any other person or entity, any Confidential Information of the Company (except as required by applicable law or in connection with performance of the Participant’s duties and responsibilities hereunder or to Participant’s legal and financial advisors so long as such advisors agree to be bound by the terms and conditions of this Paragraph 12(a)).  The Participant shall disclose the existence of the obligations under this Paragraph 12(a) to future employers.  If the Participant is requested or becomes legally compelled to disclose any Confidential Information, if permitted by applicable law, the Participant will give prompt notice of such request or legal compulsion to the Company.  The Company may waive compliance with this Paragraph 12(a) or will provide Participant with legal counsel at no cost to the Participant to seek an appropriate remedy; provided however the Participant may disclose any Confidential Information in the event, notwithstanding all such efforts, the Participant is compelled by court order to do so.  Notwithstanding the foregoing, nothing in this Paragraph shall be construed as, or shall interfere with, abridge, limit, restrain, or restrict the Participant’s right to:  (i) engage in any activity or conduct protected by Section 7 or any other provision of the National Labor Relations Act; or (ii) communicate with any federal, state, or local government agency charged with the enforcement and/or investigation of claims of discrimination, harassment, retaliation, improper wage payments, or any other unlawful employment practices under federal, state, or local law, or to file a charge, claim, or complaint with, or participate in or cooperate with any investigation or proceeding conducted by, any such agency.

 

(b) Return of Company Materials.  The Participant agrees to return all Company Materials (as defined below), including copies thereof, upon termination of the Participant’s service with the Company, and/or upon the written request of the Company.

 

  

4

  

(c) Intellectual Property; Work for Hire.

 

	
(i)  

	
Intellectual Property (as defined below) shall be the exclusive property of the Company, and the Participant shall have no right, title, or interest in, or to, the Intellectual Property.  The Company shall have the sole and exclusive right, title, and interest in, and to, the Intellectual Property, which right shall continue notwithstanding the cessation of the Participant’s services to the Company.   The Participant also hereby irrevocably waives any “moral rights” that he or she may have in the Intellectual Property, and confirms that the Company shall have the right, in addition to the other rights granted hereunder and notwithstanding the termination of the Participant’s services for any reason, to make or have made, and own, enhancements, derivative works, and other modifications to any part of the Intellectual Property.

 

	
(ii)  

	
The Participant hereby assigns to the Company any right, title, and interest that he or she may have in, and to, the Intellectual Property in any patent, copyright, industrial design, trademark registration, and any other similar right pertaining to the Intellectual Property which the Participant may have.

 

	
(iii)  

	
The Participant acknowledges that the assignments in Paragraph 12(c)(ii) above are undertaken in part as a contingency against the possibility that any Intellectual Property, by operation of law, may not be considered a work made for hire by the Participant for the Company.  The Company and its successors and assigns shall have the right to obtain and hold in their own name all copyright registrations, patents, and other evidence of rights that may be available for the Intellectual Property and/or any portion thereof.  The Participant further acknowledges that all United States copyrights and all other intellectual property rights in the Intellectual Property (including any and all patents that may issue with respect thereto) shall be exclusively owned by the Company and shall be considered “works made for hire,” as such term is defined in the United States Copyright Act, by the Participant for the Company.

 

	
(iv)  

	
The Participant hereby covenants and binds Participant and Participant’s successors, assigns and legal representatives to cooperate fully and promptly with the Company and its designees, successors, and assigns, at the Company’s reasonable expense, and to do all acts necessary or requested by the Company and its designee, successors, and assigns, to secure, maintain, enforce, and defend the Company’s rights in the Intellectual Property.  Without limitation to the foregoing, the Participant shall execute on demand, and bind the Participant and Participant’s successors, assigns and legal representatives, whether during Participant’s service to the Company or at any time following the cessation of the Participant’s services, to any applications, transfers, assignments, and other documents as the Company may consider necessary for the purpose of:  (A) vesting in, or assigning to, the Company absolute title to, (B) applying for, prosecuting, obtaining, maintaining, or protecting, or (C) maintaining, enforcing, and/or defending the Company’s rights in, any patent, copyright, industrial design, trademark registration, or any other right pertaining to the Intellectual Property in any countries in the world.  The Participant further agrees, and binds the Participant and his or her successors, assigns and legal representatives, to cooperate fully and assist the Company in every way possible in the application for, or prosecution of, such rights pertaining to the Intellectual Property and not developed during the Participant’s service with the Company.

 

  

5

  

	
(v)  

	
The Participant shall promptly disclose to the Company any patent application filed within one (1) year after termination of the Participant’s services to the Company.  The Participant shall have the burden of proving that any invention that relates, or pertains, to the Company’s business, and which is conceived less than one (1) year after the effective date of the termination of the Participant’s services, was in fact made after such termination and not developed during Participant’s service to the Company.  The Participant agrees that, during the Participant’s service to the Company, the Participant will disclose to the Company all ideas, proposals, and plans, invented or developed by him or her, which relate to the business of the Company and its subsidiaries.

 

(d) Non-Solicitation.  The Participant acknowledges that the Company has invested substantial time, money and resources in the development and retention of its Confidential Information (including trade secrets), customers, patients, accounts and business partners, and further acknowledges that, during the course of the Participant’s service to the Company, the Participant will have access to the Company’s Confidential Information (including trade secrets), and will be introduced to existing and prospective customers and patients, vendors, accounts and business partners of the Company.  The Participant acknowledges and agrees that any and all “goodwill” associated with any existing or prospective customer or patient, vendor, account or business partner belongs exclusively to the Company, including, but not limited to, any goodwill created as a result of direct or indirect contacts or relationships between the Participant and any existing or prospective customers or patients, vendors, accounts or business partners.  Additionally, the Parties acknowledge and agree that the Participant possesses skills that are special, unique or extraordinary and that the value of the Company depends upon the Participant’s use of such skills on its behalf.  The Participant acknowledges that as a result of the foregoing the restrictions contained herein and elsewhere Paragraph 12 are reasonably necessary to protect the Company from unfair competition by the Participant.  Accordingly, the Participant covenants and agrees that:  (i) during the Participant’s service with the Company and for one year thereafter, the Participant may not directly or indirectly induce, attempt to induce, solicit, attempt to solicit or encourage any employee, consultant, or contractor to leave the employment or engagement with the Company or any Affiliate; and (ii) during the Participant’s service with the Company, the Participant may not divert or take advantage of any actual or potential business opportunities of the Company in which it has a current interest or is actively pursuing.

 

(e) Non-Disparagement.  The Participant hereby agrees that during the Participant’s service to the Company and at all times thereafter, the Participant shall not make any public statement, or engage in any conduct, that is disparaging, derogatory, or otherwise is a negative or false statement about the Company or about any of its executives, officers, directors, or shareholders, including, but not limited to, any statement that disparages the products, services, finances, financial condition, capabilities or any other aspect of the business of the Company.  Notwithstanding any term to the contrary herein, the Participant shall not be in breach of this Paragraph 12(e) for the making of truthful statements under oath or in a judicial or other proceeding.

 

(f) Definitions.

 

	
(i)  

	
“Company Materials” shall include, but are not limited to computers, computer software, computer disks, tapes, printouts, source, HTML and other codes, flowcharts, schematics, designs, graphics, drawings, photographs, charts, graphs, notebooks, patient lists, customer lists, sound recordings, other tangible or intangible manifestation of content, and all other documents whether printed, typewritten, handwritten, electronic, or stored on computer disks, tapes, hard drives, or any other tangible medium, as well as samples, prototypes, models, products and the like.

 

  

6

  

	
(ii)  

	
“Confidential Information” shall mean information relating to the Company’s business affairs, proprietary technology, trade secrets, patented processes, research and development data, know-how, market studies and forecasts, competitive analyses, pricing policies, executive lists, the substance of agreements with patients, customers, suppliers, and others, marketing arrangements, patient lists, customer lists, commercial arrangements, or any other information relating to the Company’s business which is treated as confidential or proprietary by the Company in accordance with its policies.  Notwithstanding the immediately preceding sentence, the provisions of Paragraph 12(a) shall not apply to any information that:  (A) is in the public domain; (B) is or becomes available to the public other than as a result of a disclosure by the Participant in violation of Paragraph 12(a); (C) was available to the Participant on a non-confidential basis prior to the date of this Grant Agreement; or (D) becomes available to the Participant on a non-confidential basis from a source other than the Company (other than through a known breach of a confidentiality obligation).  This obligation shall continue until such Confidential Information becomes publicly available, other than pursuant to a breach of Paragraph 12(a) by the Participant, regardless of whether the Participant continues to provide services to the Company.

 

	
(iii)  

	
“Intellectual Property” shall mean any of the following that are conceived of, developed, reduced to practice, created, modified, or improved by the Participant, either solely or with others, in whole or in part, in the course of, or as a result of, the Participant’s employment by or services to the Company in any capacity, whether at the Company’s place of business or otherwise, and whether on the Company’s time or on the Participant’s own time:  (A) writings (including notes, reports, manuals and instructions), software, source code, algorithms, works and copyrightable subject matter and rights, title and interest in copyrights and copyright registrations, (B) rights, title and interest in know-how, technical information, processes, practices and systems, whether or not protectable by patent, copyright or trade secret law, (C) trademarks, trade names, service marks, emblems, logos, symbols and insignia and rights with respect thereto, including registrations and registration rights, (D) all developments, including trade secrets of any kind, discoveries, improvements, and ideas directly relating to or useable in the Company business, and (E) licenses granted by third parties of rights to use any of the foregoing.

 

13. Grant Agreement Subject to Plan; Acceptance.  This Grant Agreement is made pursuant to all of the provisions of the Plan, which is incorporated herein by this reference, and is intended, and shall be interpreted in a manner to comply therewith.  In the event of any conflict between the provisions of this Grant Agreement and the provisions of the Plan, the provisions of the Plan govern.  By accepting this Award, the Participant: (a) acknowledges receipt of and represents that the Participant has read and is familiar with this Grant Agreement, the Plan, and a prospectus for the Plan prepared in connection with the registration of the Common Stock to be issued pursuant to the Plan with the Securities and Exchange Commission, (b) acknowledges that this Option Award is subject to all of the terms and conditions of this Grant Agreement and the Plan, and (c) agrees to accept as binding, conclusive, and final all decisions or interpretations of the Administrator on any questions arising under the Grant Agreement or the Plan.

 

 

[Signature Page Follows]

 

 

  

7

  

IN WITNESS WHEREOF, the parties have executed this Grant Agreement as of the date first written above.

 

 

	
SIGNAL GENETICS, INC.

 

By: _________________________

     Samuel D. Riccitelli

     667 Madison Avenue, 14th Floor

     New York, NY  10065

	
PARTICIPANT

 

_________________________

Print Name: ________________

Date: _____________________

Address: __________________

_________________________

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