Document:

8-K

Exhibit 10.3  

THIS GRANT LETTER, THE OPTION AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE, AND WILL BE
ISSUED IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “1933 ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR BASED ON AN OPINION
OF COUNSEL SATISFACTORY, IN FORM AND SUBSTANCE, TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN ACCORDANCE WITH REGULATION S, AS PROMULGATED BY THE SECURITIES AND
EXCHANGE COMMISSION (“REGULATION S”) APPLICABLE FEDERAL, STATE, AND FOREIGN
SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE 1933 ACT. 

ACRO INC. 

GRANT LETTER 

Date:_____________  

To the Participant,
______________, ID _____________ 

	1.  	You
are hereby notified that on _____________ the Board of Directors of the           Company
has resolved that you shall be granted _____________ options, each to           purchase
one share of Common Stock par value of US$0.001 of the Company at an           exercise
price per share of US$ ___(the “Options”). 

	2. 	The
Options, shares resulting from their exercise (“Shares”)           and
any additional rights including share bonus that shall be distributed to you           in
connection with the Options (“Additional Rights”), shall be
          granted on your behalf to the Trustee – the ESOP Trust Company (the
          “Trustee”). 

	3. 	The
Options, Shares and Additional Rights shall be allocated on your behalf to           the
Trustee under the provisions of the Capital Gains Tax Track and will be held           by
the Trustee for the period stated in Section 102 of the Income Tax Ordinance,
          1961 and the Income Tax Regulations (Tax Relieves in Allocation of Shares to
          Employees), 2003 promulgated thereunder (“Section 102”). 

	4. 	The
Options, Shares and Additional Rights are granted to you and allocated to           the
Trustee according to the provisions of Section 102, the 2008 Israeli Stock
          Option Plan adopted by the Company (“Plan”) and the Trust
          Agreement signed between the Company and the Trustee attached herewith and made
          a part of this notice. 

	5. 	Unless
otherwise determined by the Administrator, all Options granted to you on           this
date shall, subject to your continued employment with or service to the           Company
or Affiliate, become vested and exercisable in accordance with the           vesting
schedule detailed below. 

	 	
[_______________]  

	6. 	The
Options are granted to you on condition that you sign the Approval of the
          Participant as detailed below. 

	______________________ 	 	______________________
	Acro Inc. 	 	Date

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APPROVAL OF THE
PARTICIPANT:  

I hereby agree that all the Options
and Additional Rights granted to me, shall be allocated to the Trustee under provisions of
the Capital Gains Tax Track and shall be held by the Trustee for the period stated in
Section 102 and in accordance with the provisions of the Trust Agreement, or for a shorter
period if an approval is received from the tax authorities. 

I am aware of the fact that upon
termination of my employment in the Company, I shall not have a right to the Options,
except as specified in the Plan. 

I hereby confirm that: 

	1. 	I
read the Plan and I understand and accept its terms and conditions. I am aware
          of the fact that the Company agrees to grant me the Options based on my
          confirmation; 

	2. 	I
understand the provisions of Section 102 and the applicable tax track of this
          grant of Options; 

	3. 	I
agree to the terms and conditions of the Trust Agreement; 

	4. 	Subject
to the provisions of Section 102, I confirm that I shall not sell nor           transfer
the Options, Shares or Additional Rights from the Trustee until the end           of the
Holding Period; 

	5. 	If
I shall sell or withdraw the shares from the Trust before the end of the
          Holding Period as defined in Section 102 (“Violation”), either
          (A) I shall reimburse the Company within three (3) days of its demand for the
          employer portion of the payment by the Company to the National Insurance
          Institute plus linkage and interest in accordance with the law, as well as any
          other expense that the Company shall bear as a result of the said Violation
(all           such amounts defined as the “Payment”) or (B) I agree
that the           Company may, in its sole discretion, deduct such amounts directly from
any           monies to be paid to me as a result of my disposition of the Shares; 

	6. 	By
signing this letter, I hereby give an irrevocable proxy to the representative
          appointed by the Company’s Board of Directors in accordance with Section
16           of the Plan, to vote any Shares that will be issued to me or to the Trustee
for           my benefit following an exercise of Option granted to me under the Plan.
The           proxy shall be valid until consummation of an IPO by the Company; 

	7. 	I
understand that this grant of Options is conditioned upon the receipt of all
          required approvals from the tax authorities; 

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	8. 	Acknowledgements

	 	
I
hereby acknowledge and agree that:  

	 	(a) 	none
of the Options or Shares have been registered under the 1933 Act, or under
                    any state securities or “blue sky” laws of any state of the
United                     States, and, unless so registered, may not be offered or sold
in the United                     States or, directly or indirectly, except in accordance
with Regulation S,                     pursuant to an effective registration statement
under the 1933 Act, or based on                     an opinion of counsel satisfactory,
in form and substance, to the Company that                     such registration is not
required pursuant to an exemption from the registration                     requirements
of the 1933 Act; 

	 	(b) 	I
acknowledge that the Company has not undertaken, and will have no obligation,
                    to register any of the Options or Shares under the 1933 Act; 

	 	(c) 	I
represent and warrant that I am an Accredited Investor, as the term is defined
                    in Regulation D under the 1933 Act; 

	 	(d) 	the
decision to execute this Grant letter and receive the Options hereunder has
                    not been based upon any oral or written representation as to fact or
otherwise                     made by or on behalf of the Company; 

	 	(e) 	no
securities commission or similar regulatory authority has reviewed or passed
                    on the merits of the Options or Shares; 

	 	(f) 	I
am resident in the jurisdiction identified in my address set forth below; 

	 	(g) 	there
is no government or other insurance covering the Options or Shares; 

	 	(h) 	there
are risks associated with the exercise of the Options into Shares,
                    including but not limited to risks associated with investment in a
high-tech                     company; 

	 	(i) 	I
have had a reasonable opportunity to ask questions of and receive answers from
                    the Company in connection with the grant of the Options hereunder,
and to obtain                     additional information, to the extent possessed or
obtainable without                     unreasonable effort or expense, necessary to
verify the accuracy of the                     information about the Company; 

	 	(j) 	the
books and records of the Company were available upon reasonable notice for
                    inspection, subject to certain confidentiality restrictions, by me
during                     reasonable business hours at its principal place of business,
and all documents,                     records and books in connection with the grant of
the Options hereunder have                     been made available for inspection by me,
my lawyer and/or advisor(s); 

	 	(k) 	the
Company will refuse to register any transfer of the Options or Shares not
                    made in accordance with the provisions of this Regulation S, pursuant
to an                     effective registration statement under the 1933 Act or not
based upon an opinion                     of counsel satisfactory, in form and substance,
to the Company pursuant to an                     available exemption from the
registration requirements of the 1933 Act; 

	 	(l) 	I
have been advised to consult my own legal, tax and other advisors with respect
                    to the merits and risks of the exercise of the Options and with
respect to                     applicable resale restrictions, and I am solely
responsible (and the Company is                     not in any way responsible) for
compliance with: 

	 	(i) 	any
applicable laws of the jurisdiction in which the I am a resident in
                    connection with the grant of the Options hereunder, and  

	 	(ii) 	applicable
resale restrictions.  

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	9. 	Representations
and Warranties

	 	
I
hereby represent and warrant to the Company that:  

	 	(a) 	I
have the legal capacity and competence to enter into and execute this Grant
               letter and to take all actions required pursuant hereto; 

	 	(b) 	I
will exercise the Options into Shares for investment only and not with a view
               to resale or distribution and, in particular, I have no intention to
distribute                either directly or indirectly any of the Options or Shares; 

	 	(c) 	I
am receiving the Options as principal for my own account for investment
               purposes only, and not with a view to, or for, resale, distribution or
               fractionalization thereof, in whole or in part, and no other person has a
direct                or indirect beneficial interest in such Options or Shares; 

	 	(d) 	I
am not an underwriter of, or dealer in, the common shares of the Company, nor
               am I participating, pursuant to a contractual agreement or otherwise, in
the                distribution of the Options or Shares; 

	 	(e) 	I
am not aware of any advertisement of any of the Options;  

	 	(f) 	no
person has made to me any written or oral representations; 

	 	(i) 	that
any person will resell or repurchase any of the Options or Shares;  

	 	(ii) 	that
any person will refund the exercise price of any of the Options;  

	 	(iii) 	as
to the future price of value of any of the Options or Shares;  

	 	(iv) 	that
any of the Options or Shares will be listed and posted for trading on any
               stock exchange or automated dealer quotation system or that application
has been                made to list and post any of the Options of the Company on any
stock exchange or                automated dealer quotation system; or  

	 	(v) 	as
to the tax or accounting consequences of grant or exercise of the Options, or
               as to profits, losses or cash flow which may be received or sustained as a
               result of Options or Shares.  

	 	(g) 	I
am not a “U.S. person” as that term is defined under Regulation S; 

	 	(h) 	On
the date hereof, I am outside the United States, and the grant of the Options
               was not made to me in the U.S.; 

	 	(i) 	I
am receiving the Options for my own account and not for the account or benefit
               of a “U.S. person” (as defined in Regulation S), or is a U.S.
person                who purchased securities in a transaction that did not require
registration                under the 1933 Act, and the sale has not been prearranged
with a buyer in the                United States; 

5

	 	(j) 	I
acknowledge that I have not received the Options as a result of, and I will
               not engage in, any “directed selling efforts” (as defined in
               Regulation S under the 1933 Act) in the United States in respect of the
Options                and the Shares resulting from their exercise, which would include
any activities                undertaken for the purpose of, or that could reasonably be
expected to have the                effect of, conditioning the market in the United
States for the resale of the                Options and the Shares resulting from their
exercise; provided, however, that I                may sell or otherwise dispose of the
Options and the Shares resulting from their                exercise pursuant to
registration under the 1933 Act and any applicable state                and provincial
securities laws or under an exemption from such registration                requirements
and as otherwise provided herein; and  

	 	(k) 	The
statements made by me herein are true and correct and are confirmed hereby,
               and the Company shall be entitled to rely thereon.

	10.  	Legending
of the Options and the Shares

	 	(a) 	I
hereby acknowledge that upon the issuance thereof, and until such time as the
               same is no longer required under the applicable securities laws and
regulations,                the certificates representing the Options and the Shares will
bear a legend in                substantially the following form: 

THESE SECURITIES HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE AND HAVE BEEN ISSUED IN RELIANCE UPON THE EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR BASED ON AN OPINION OF COUNSEL SATISFACTORY, IN FORM AND SUBSTANCE, TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED PURSUANT TO AN AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IN ACCORDANCE WITH APPLICABLE FEDERAL,
STATE, AND FOREIGN SECURITIES LAWS, INCLUDING BUT NOT LIMITED TO REGULATION S AS
PROMULGATED BY THE SECURITIES AND EXCHANGE COMMISSION. HEDGING TRANSACTIONS INVOLVING
THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. 

	 	(b) 	I
hereby acknowledge and agree to the Company making a notation on its records
               or giving instructions to the registrar and transfer agent of the Company
in                order to implement the restrictions on transfer set forth and described
in this                Grant Letter. 

	11. 	I
hereby confirm that I read this letter thoroughly, received all the
          clarifications and explanations I requested, I understand the contents of this
          letter and the obligations I undertake in signing it. 

	——————————————

Name of Participant	——————————————

Signature	——————————————

Date

6Consulting Services Agreement

 Exhibit 10.1 
 CONSULTING SERVICES AGREEMENT 
 This Consulting Services Agreement (the
“Agreement”), made as of April 25, 2008 (the “Commencement Date”), is entered into by Akesis Pharmaceuticals, Inc., with an address at 888 Prospect Street, Suite 320, La Jolla, CA 92037 (the
“Company”), and Carl P. LeBel, PhD, with an address at 888 Prospect Street, Suite 320, La Jolla, CA 92037 (the “Consultant”). 
 Whereas, the Company desires to retain the services of the Consultant and the Consultant desires to perform certain services for the Company. 
 Now, Therefore, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties agree as follows: 
 1. Services. The Consultant agrees to
perform such consulting, advisory and related services to and for the Company as may be reasonably requested from time to time by the Company, including, but not limited to, the services specified in Exhibit A (collectively, the
“Services”) 
 2. Non-Compete. During the Consulting Period (as defined below), the Consultant shall not engage in any
activity that has a conflict of interest with the Company, including any competitive employment, business, or other activity, and shall not assist any other person or organization that competes, or intends to compete with the Company. 
 3. Term. This Agreement shall commence on the Commencement Date and shall continue for a period of 90 days following the Commencement Date (the
“Consulting Period”) unless earlier terminated in accordance with the provisions of Section 5. 
 4. Compensation.

 4.1. Consulting Fees. The Company shall pay to the Consultant a fee of US $250 per hour spent performing the Services. The
Consultant shall submit to the Company a monthly invoice, in a form that details hours worked and work completed during the previous month for such consulting fees incurred in the previous period. The Company shall pay to the Consultant amounts
shown on each such invoice within 30 days after receipt thereof. 
 4.2. Reimbursement of Expenses. The Company shall reimburse
the Consultant for travel, lodging, meals, and other prior approved out-of-pocket expenses incurred or paid by the Consultant in connection with, or related to, the performance of the Services. The Consultant shall invoice the Company for travel
time related to Company specific work at a multiple of 50% of the consulting rate specified in Section 4.1. All other expenditures shall be the sole responsibility of the Consultant. The Consultant shall submit to the Company with each invoice
an itemized statement, in a form satisfactory to the Company, of such expenses incurred in the previous period. The Company shall pay to the Consultant amounts shown on each such statement within 30 days after receipt thereof. 

 5. Termination. This Agreement may be terminated by either the Company or the Consultant at any time prior
to the end of the Consulting Period by giving five (5) days written notice of termination. Such notice may be given at any time for any reason, with or without cause. The Company will pay Consultant for all Services performed by Consultant
through the date of termination. 
 6. Non-Solicitation. During the Consulting Period and for a period of one (1) year thereafter, the
Consultant will not directly or indirectly recruit, solicit or hire any employee of the Company, or induce or attempt to induce any employee of the Company to terminate his/her employment with, or otherwise cease his/her relationship with, the
Company. 
 7. Cooperation. The Consultant shall use his best efforts in the performance of his obligations under this Agreement. The Company shall
provide such access to its information and property as may be reasonably required in order to permit the Consultant to perform his obligations hereunder. The Consultant shall cooperate with the Company’s personnel, shall not interfere with the
conduct of the Company’s business and shall observe all rules, regulations and security requirements of the Company concerning the safety of persons and property. 
 8. Independent Parties. It is the express intention of the parties to this Agreement that the Consultant is an independent contractor, and is classified by the Company as such for all employee benefit purposes,
and is not an employee, agent, joint venture, or partner of the Company. Nothing in this Agreement shall be interpreted or construed as creating or establishing an employment relationship between the Company and the Consultant. Both parties
understand and agree that the Consultant may perform services for others during the term of this Agreement. Consultant shall have no authority to assume, create, or enlarge any obligation or commitment on behalf of the Company without the prior
written consent of the Company. 
 9. Ownership. All work products developed by the Consultant shall be deemed “work made for hire”, and
Consultant shall have no proprietary interest or claim in or to any work product developed by the Consultant pursuant to this Agreement. Consultant hereby assigns and agrees to assign to the Company, its successors, assignees, or nominees,
Consultant’s right, title and interest, if any, in any patents, trade secrets, trademarks, copyrights, or other proprietary information embodied in or relating to Consultant’s work product under this Agreement. At the Company’s
request, the Consultant shall execute the Company’s standard form of Confidential Information and Invention Assignment Agreement in order to give effect to the provisions of this Section 9. 
 10. Proprietary Information. Consultant understands that the Company possesses Proprietary Information (as defined below) which is important to its
business and that this Agreement creates a relationship of confidence and trust between Consultant and the Company with regard to Proprietary Information. For purposes of this Agreement, “Proprietary Information” is information that
was 

 
or will be developed, created, or discovered by or on behalf of the Company, or is developed, created or discovered by Consultant while performing Services,
or which became or will become known by, or was or is conveyed to the Company which has commercial value in the Company’s business. Proprietary Information includes, but is not limited to, trade secrets, designs, technology, know-how, works of
authorship, source and object code, algorithms, processes, data, computer programs, ideas, techniques, inventions (whether patentable or not), business and product development plans, customers, customer lists and other information concerning the
Company’s actual or anticipated business, research or development, personnel information, terms of compensation and performance levels of Company employees, or information which is received in confidence by or for the Company from any other
person. At all times, both during the term of this Agreement and after its termination, Consultant will keep in confidence and trust, and will not use or disclose, any Proprietary Information without the prior written consent of an officer of the
Company, except as may be necessary in the ordinary course of performing the Services under this Agreement. 
 11. Notices. All notices
required or permitted under this Agreement shall be in writing and shall be deemed effective upon personal delivery or upon deposit in the United States Post Office, by registered or certified mail, postage prepaid, addressed to the other party at
the address shown above, or at such other address or addresses as either party shall designate to the other in accordance with this Section 11. 
 12. Entire Agreement. This Agreement constitutes this entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement.

 13. Amendment. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Consultant.

 14. Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of California,
without reference to its conflicts of laws principles. 
 15. Successors and Assigns. This Agreement shall be binding upon, and inure to the
benefit of, both parties and their respective successors and assigns, including any corporation with which, or into which, the Company may be merged or which may succeed to its assets or business, provided, however, that the obligations of the
Consultant are personal and shall not be assigned by the Consultant. 
 16. Miscellaneous.  
 16.1. No Waiver. No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any
other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion. 

 16.2. Captions. The captions of the sections of this Agreement are for convenience
of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement. 
 16.3.
Severability. In the event that any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year set forth above. 
  

	
	Akesis Pharmaceuticals, Inc.
	
	/s/ Jay Lichter, Ph.D.
	Jay Lichter, Ph.D.
	President and Chief Executive Officer
	
	Consultant
	
	/s/ Carl P. LeBel
	Carl P. LeBel

 EXHIBIT A 
 DESCRIPTION OF CONSULTING SERVICES 
  

	 	•	 	 Provide program management support and product development expertise for the Company’s diabetes candidate currently at the clinical stage

  

	 	•	 	 Provide tactical direction and guidance to the Company’s staff on the current Phase 2 clinical trial

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