Document:

Blueprint

 

 Exhibit 10.4

 

ADGERO
BIOPHARMACEUTICALS HOLDINGS, INC.

 

2016
EQUITY INCENTIVE PLAN

 

 

1.

Establishment
and Purpose

1.1 The purpose of the
Adgero Biopharmaceuticals Holdings, Inc. 2016 Equity Incentive Plan
(the “Plan”) is to provide a means whereby eligible
employees, officers, non-employee directors and other individual
service providers develop a sense of proprietorship and personal
involvement in the development and financial success of the Company
and to encourage them to devote their best efforts to the business
of the Company, thereby advancing the interests of the Company and
its stockholders. The Company, by means of the Plan, seeks to
retain the services of such eligible persons and to provide
incentives for such persons to exert maximum efforts for the
success of the Company and its Subsidiaries.

1.2 The Plan permits
the grant of Nonqualified Stock Options, Incentive Stock Options,
Stock Appreciation Rights, Restricted Stock, Stock Units,
Performance Shares, Performance Units, Incentive Bonus Awards,
Other Cash-Based Awards and Other Stock-Based Awards. This Plan
shall become effective upon the date set forth in Section 18.1
hereof.

 

2.

Definitions

 

Wherever the
following capitalized terms are used in the Plan, they shall have
the meanings specified below:

2.1 “Affiliate” means, with
respect to a Person, a Person that directly or indirectly Controls,
or is Controlled by, or is under common Control with, such
Person.

2.2 “Applicable Law” means the
requirements relating to the administration of equity-based awards
or equity compensation plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or
quotation system on which the Common Stock is listed or quoted and
the applicable laws of any foreign country or jurisdiction where
Awards are, or will be, granted under the Plan.

2.3 “Award” means an award of
a Stock Option, Stock Appreciation Right, Restricted Stock, Stock
Unit, Performance Share, Performance Unit, Incentive Bonus Award,
Other Cash-Based Award and/or Other Stock-Based Award granted under
the Plan.

2.4 “Award Agreement” means
either (i) a written or electronic agreement entered into between
the Company and a Participant setting forth the terms and
conditions of an Award including any amendment or modification
thereof, or (ii) a written or electronic statement issued by the
Company to a Participant describing the terms and provisions of
such Award, including any amendment or modification thereof. The
Committee may provide for the use of electronic, internet or other
non-paper Award Agreements, and the use of electronic, internet or
other non-paper means for the acceptance thereof and actions
thereunder by a Participant. Each Award Agreement shall be subject
to the terms and conditions of the Plan and need not be
identical.

 

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

2.6 “Cause” means (i)
conviction of, or the entry of a plea of guilty or no contest to, a
felony or any other crime that causes the Company or its Affiliates
public disgrace or disrepute, or materially and adversely affects
the Company’s or its Affiliates’ operations or
financial performance or the relationship the Company has with its
customers, (ii) gross negligence or willful misconduct with respect
to the Company or any of its Affiliates, including, without
limitation fraud, embezzlement, theft or proven dishonesty in the
course of his or her employment; (iii) refusal to perform any
lawful, material obligation or fulfill any duty (other than any
duty or obligation of the type described in clause (v) below) to
the Company or its Affiliates (other than due to a Disability),
which refusal, if curable, is not cured within 10 days after
delivery of written notice thereof; (iv) material breach of any
agreement with or duty owed to the Company or any of its
Affiliates, which breach, if curable, is not cured within 10 days
after the delivery of written notice thereof; or (v) any breach of
any obligation or duty to the Company or any of its Affiliates
(whether arising by statute, common law or agreement) relating to
confidentiality, noncompetition, nonsolicitation or proprietary
rights. Notwithstanding the foregoing, if a Participant and the
Company (or any of its Affiliates) have entered into an employment
agreement, consulting agreement or other similar agreement that
specifically defines “cause,” then with respect to such
Participant, “Cause” shall have the meaning defined in
that employment agreement, consulting agreement or other
agreement.

2.7 “Change in Control” means,
unless otherwise provided in an Award Agreement, the occurrence of
any one of the following events:

(i)           any
“person,” including a “group” (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act, but
excluding the Company, any entity controlling, controlled by or
under common control with the Company, any trustee, fiduciary or
other person or entity holding securities under any employee
benefit plan or trust of the Company or any such entity, and, with
respect to any particular Participant, the Participant and any
“group” (as such term is used in Section 13(d)(3) of
the Exchange Act) of which the Participant is a member), is or
becomes the “beneficial owner” (as defined in Rule
13(d)(3) under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of either (A)
the combined voting power of the Company’s then outstanding
securities or (B) the then outstanding shares of Common Stock (in
either such case other than as a result of an acquisition of
securities directly from the Company); or

 

(ii)           any
consolidation or merger of the Company where the stockholders of
the Company, immediately prior to the consolidation or merger,
would not, immediately after the consolidation or merger,
beneficially own (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, shares representing in the
aggregate 50% or more of the combined voting power of the
securities of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if
any); or

 

(iii)           there
shall occur (A) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by
any party as a single plan) of all or substantially all of the
assets of the Company, other than a sale or disposition by the
Company of all or substantially all of the Company’s assets
to an entity, at least 50% of the combined voting power of the
voting securities of which are owned by “persons” (as
defined above) in substantially the same proportion as their
ownership of the Company immediately prior to such sale or (B) the
approval by stockholders of the Company of any plan or proposal for
the liquidation or dissolution of the Company; or

 

 

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(iv)           the
members of the Board at the beginning of any consecutive
24-calendar-month period (the “Incumbent Directors”)
cease for any reason other than due to death to constitute at least
a majority of the members of the Board; provided that any Director
whose election, or nomination for election by the Company’s
stockholders, was approved or ratified by a vote of at least a
majority of the members of the Board then still in office who were
members of the Board at the beginning of such 24-calendar-month
period, shall be deemed to be an Incumbent Director.

 

Notwithstanding the
foregoing, no event or condition shall constitute a Change in
Control to the extent that, if it were, a 20% tax would be imposed
under Section 409A of the Code; provided that, in such a case, the
event or condition shall continue to constitute a Change in Control
to the maximum extent possible (e.g., if applicable, in respect of
vesting without an acceleration of distribution) without causing
the imposition of such 20% tax.

 

2.8 “Code” means the Internal
Revenue Code of 1986, as amended. For purposes of this Plan,
references to sections of the Code shall be deemed to include
references to any applicable regulations thereunder and any
successor or similar provision.

2.9 “Committee” means the
committee of the Board delegated with the authority to administer
the Plan, or the full Board, as provided in Section 3 of the Plan.
With respect to any decision involving an Award intended to satisfy
the requirements of Section 162(m) of the Code, the Committee shall
consist of two or more directors of the Company who are
“outside directors” within the meaning of Section
162(m) of the Code. With respect to any decision relating to a
Reporting Person, the Committee shall consist solely of two or more
directors who are disinterested within the meaning of Rule 16b-3
promulgated under the Exchange Act, as amended from time to time,
or any successor provision. The fact that a Committee member shall
fail to qualify under any of these requirements shall not
invalidate an Award if the Award is otherwise validly made under
the Plan. The Board may at any time appoint additional members to
the Committee, remove and replace members of the Committee with or
without cause, and fill vacancies on the Committee however
caused.

2.10 “Common
Stock” means the Company’s Common Stock, par
value $.0001 per share.

2.11 “Company”
means Adgero Biopharmaceuticals Holdings, Inc., a Delaware
corporation, and any successor thereto as provided in Section
16.8.

2.12 “Control”
means, as to any Person, the power to direct or cause the direction
of the management and policies of such Person, or the power to
appoint directors of the Company, whether through the ownership of
voting securities, by contract or otherwise (the terms
“Controlled
by” and “under common Control
with” shall have correlative meanings).

 

3

 

2.13 “Date
of Grant” means the date on which an Award under the
Plan is granted by the Committee, or such later date as the
Committee may specify to be the effective date of an
Award.

2.14 “Disability”
means a Participant being considered “disabled” within
the meaning of Section 409A of the Code and Treasury Regulation
1.409A-3(i)(4), as well as any successor regulation or
interpretation.

2.15 “Effective
Date” means the date set forth in Section 18.1
hereof.

2.16 “Eligible
Person” means any person who is an employee, officer,
director, consultant, advisor or other individual service provider
of the Company or any Subsidiary, or any person who is determined
by the Committee to be a prospective employee, officer, director,
consultant, advisor or other individual service provider of the
Company or any Subsidiary.

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

2.18 “Fair
Market Value” of a share of Common Stock shall be, as
applied to a specific date (i) the closing price of a share of
Common Stock as of such date on the principal established stock
exchange or national market system on which the Common Stock is
then traded (or, if there is no trading in the Common Stock as of
such date, the closing price of a share of Common Stock on the most
recent date preceding such date on which trades of the Common Stock
were recorded), or (ii) if the shares of Common Stock are not then
traded on an established stock exchange or national market system
but are then traded in an over-the-counter market, the average of
the closing bid and asked prices for the shares of Common Stock in
such over-the-counter market as of such date (or, if there are no
closing bid and asked prices for the shares of Common Stock as of
such date, the average of the closing bid and the asked prices for
the shares of Common Stock on the most recent date preceding such
date on which such closing bid and asked prices are available on
such over-the-counter market), or (iii) if the shares of Common
Stock are not then listed on a national securities exchange or
national market system or traded in an over-the-counter market, the
price of a share of Common Stock as determined by the Committee in
its discretion in a manner consistent with Section 409A of the Code
and Treasury Regulation 1.409A-1(b)(5)(iv), as well as any
successor regulation or interpretation. Notwithstanding the
preceding sentence, if the date for which Fair Market Value is
determined is the date on which the final prospectus relating to
the Company’s Initial Public Offering is filed, the Fair
Market Value shall be the “Price to the Public” (or
equivalent) set forth on the cover page for the final prospectus
relating to the Company’s Initial Public
Offering.

2.19 “Fully
Diluted” means, as applied to a specific date, the
total number of shares of Common Stock outstanding as of such date
plus the number of shares of Common Stock issuable upon the
exercise of outstanding warrants, stock options and other awards
exercisable for (or convertible into) Common Stock under an equity
compensation plan of the Company, as well as upon the exercise of
outstanding warrants that are not part of any equity compensation
plan, but excluding shares of Common Stock issuable upon the
conversion of any convertible notes.

 

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2.20 “Incentive
Bonus Award” means an Award granted under Section 12
of the Plan.

2.21 “Incentive
Stock Option” means a Stock Option granted under
Section 6 hereof that is intended to meet the requirements of
Section 422 of the Code and the regulations promulgated
thereunder.

2.22 “Initial Public Offering”
means the consummation of the first underwritten, firm commitment
public offering pursuant to an effective registration statement
under the Securities Act covering the offer and sale by the Company
of its equity securities, or such other event as a result of or
following which the Common Stock shall be publicly
held.

2.23 “Nonqualified
Stock Option” means a Stock Option granted under
Section 6 hereof that is not an Incentive Stock
Option.

2.24 “Other
Cash-Based Award” means a contractual right granted to
an Eligible Person under Section 13 hereof entitling such Eligible
Person to receive a cash payment at such times, and subject to such
conditions, as are set forth in the Plan and the applicable Award
Agreement.

2.25 “Other
Stock-Based Award” means a contractual right granted
to an Eligible Person under Section 13 representing a notional unit
interest equal in value to a share of Common Stock to be paid and
distributed at such times, and subject to such conditions as are
set forth in the Plan and the applicable Award
Agreement.

2.26 “Participant”
means any Eligible Person who holds an outstanding Award under the
Plan.

2.27 “Person”
shall mean any individual, partnership, firm, trust, corporation,
limited liability company or other similar entity. When two or more
Persons act as a partnership, limited partnership, syndicate or
other group for the purpose of acquiring, holding or disposing of
Common Stock, such partnership, limited partnership, syndicate or
group shall be deemed a “Person”

2.28 “Performance
Goals” shall mean performance goals established by the
Committee as contingencies for the grant, exercise, vesting,
distribution, payment and/or settlement, as applicable, of
Awards.

2.29 “Performance
Measures” mean the measures of performance of the
Company and its Subsidiaries as more fully described in Section 14
of the Plan and Exhibit A hereto.

2.30 “Performance
Shares” means a contractual right granted to an
Eligible Person under Section 10 hereof representing a notional
unit interest equal in value to a share of Common Stock to be paid
and distributed at such times, and subject to such conditions, as
are set forth in the Plan and the applicable Award
Agreement.

2.31 “Performance
Unit” means a contractual right granted to an Eligible
Person under Section 11 hereof representing a notional dollar
interest as determined by the Committee to be paid and distributed
at such times, and subject to such conditions, as are set forth in
the Plan and the applicable Award Agreement.

 

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2.32 “Plan”
means this Adgero Biopharmaceuticals Holdings, Inc. 2016 Equity
Incentive Plan, as it may be amended from time to
time.

2.33 Private
Placement” means the private placement of units
consisting of shares of Common Stock and warrants to purchase
Common Stock pursuant to the Private Placement Memorandum of Adgero
Biopharmaceutical Holdings, Inc. dated January 11,
2016.

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

2.35 “Restricted
Stock Award” means a grant of shares of Common Stock
to an Eligible Person under Section 8 hereof that are issued
subject to such vesting and transfer restrictions and such other
conditions as are set forth in the Plan and the applicable Award
Agreement.

2.36 “Section
162(m) Award” shall mean any Award granted pursuant to
the Plan that is intended to qualify for the exception for
“qualified performance-based compensation” under
Section 162(m) of the Code and the regulations
thereunder.

2.37 “Securities
Act” means the Securities Act of 1933, as
amended.

2.38 “Service”
means a Participant’s employment or other service
relationship with the Company or any Subsidiary.

2.39 “Stock
Appreciation Right” means a contractual right granted
to an Eligible Person under Section 7 hereof entitling such
Eligible Person to receive a payment, upon the exercise of such
right, in such amount and at such time, and subject to such
conditions, as are set forth in the Plan and the applicable Award
Agreement.

2.40 “Stock
Option” means a contractual right granted to an
Eligible Person under Section 6 hereof to purchase shares of Common
Stock at such time and price, and subject to such conditions, as
are set forth in the Plan and the applicable Award
Agreement.

2.41 “Stock
Unit Award” means a contractual right granted to an
Eligible Person under Section 9 hereof representing notional unit
interests equal in value to a share of Common Stock to be paid and
distributed at such times, and subject to such conditions, as are
set forth in the Plan and the applicable Award
Agreement.

2.42  “Subsidiary”
means an entity (whether or not a corporation) that is wholly or
majority owned or controlled, directly or indirectly, by the
Company; provided, however, that with respect to Incentive Stock
Options, the term “Subsidiary” shall include only an
entity that qualifies under section 424(f) of the Code as a
“subsidiary corporation” with respect to the
Company.

 

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3.

Administration

3.1 Committee Members. The Plan
shall be administered by the Committee; provided that the entire
Board may act in lieu of the Committee on any matter, subject to
Code Section 162(m) and 16b-3 Award requirements referred to in
Section 2.9 of the Plan. If and to the extent permitted by
Applicable Law, the Committee may authorize one or more Reporting
Persons (or other officers) to make Awards to Eligible Persons who
are not Reporting Persons (or other officers whom the Committee has
specifically authorized to make Awards). Subject to Applicable Law
and the restrictions set forth in the Plan, the Committee may
delegate administrative functions to individuals who are Reporting
Persons, officers, or employees of the Company or its
Subsidiaries.

 

3.2          Committee
Authority. The Committee shall have such powers and
authority as may be necessary or appropriate for the Committee to
carry out its functions as described in the Plan. Subject to the
express limitations of the Plan, the Committee shall have authority
in its discretion to determine the Eligible Persons to whom, and
the time or times at which, Awards may be granted, the number of
shares, units or other rights subject to each Award, the exercise,
base or purchase price of an Award (if any), the time or times at
which an Award will become vested, exercisable or payable, the
performance criteria, performance goals and other conditions of an
Award, the duration of the Award, and all other terms of the Award.
Subject to the terms of the Plan, the Committee shall have the
authority to amend the terms of an Award in any manner that is not
inconsistent with the Plan (including to extend the
post-termination exercisability period of Stock Options and Stock
Appreciation Rights), provided that no such action shall adversely
affect the rights of a Participant with respect to an outstanding
Award without the Participant’s consent. The Committee shall
also have discretionary authority to interpret the Plan, to make
all factual determinations under the Plan, and to make all other
determinations necessary or advisable for Plan administration,
including, without limitation, to correct any defect, to supply any
omission or to reconcile any inconsistency in the Plan or any Award
Agreement hereunder. The Committee may prescribe, amend, and
rescind rules and regulations relating to the Plan. The
Committee’s determinations under the Plan need not be uniform
and may be made by the Committee selectively among Participants and
Eligible Persons, whether or not such persons are similarly
situated. The Committee shall, in its discretion, consider such
factors as it deems relevant in making its interpretations,
determinations and actions under the Plan including, without
limitation, the recommendations or advice of any officer or
employee of the Company or such attorneys, consultants, accountants
or other advisors as it may select. All interpretations,
determinations, and actions by the Committee shall be final,
conclusive, and binding upon all parties.

3.3          No
Liability; Indemnification. Neither the Board nor any
Committee member, nor any Person acting at the direction of the
Board or the Committee, shall be liable for any act, omission,
interpretation, construction or determination made in good faith
with respect to the Plan, any Award or any Award Agreement. 
The Company and its Subsidiaries shall pay or reimburse any member
of the Committee, as well as any other Person who takes action on
behalf of the Plan, for all reasonable expenses incurred with
respect to the Plan, and to the full extent allowable under
Applicable Law shall indemnify each and every one of them for any
claims, liabilities, and costs (including reasonable
attorney’s fees) arising out of their good faith performance
of duties on behalf of the Company with respect to the Plan. 
The Company and its Subsidiaries may, but shall not be required to,
obtain liability insurance for this purpose.

 

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4.              Shares
Subject to the Plan

 

4.1           Share
Limitation.

 

(a)             Subject
to adjustment pursuant to Section 4.2 and any other applicable
provisions hereof, the maximum aggregate number of shares of Common
Stock which may be issued under all Awards granted to Participants
under the Plan initially shall be 750,000 shares, which number
shall increase to 15% of the total number of shares of the Company
outstanding, on a Fully Diluted basis, immediately following the
final closing of the Private Placement (at such time as the Board
determines that the final closing has occurred), up to a maximum of
2,000,000 shares. All of the shares available pursuant to this
Section 4.1(a) may, but need not, be issued in respect of Incentive
Stock Options.

(b)             The
number of shares of Common Stock available for issuance under the
Plan shall automatically increase on January 1st of each year for a
period of ten years commencing on January 1, 2017 and ending on
(and including) January 1, 2026, in an amount equal to six percent
(6%) of the total number of shares of Common Stock outstanding on
December 31st of the preceding calendar year. Notwithstanding the
foregoing, the Board may act prior to the first day of any calendar
year, to provide that there shall be no increase in the share
reserve for such calendar year or that the increase in the share
reserve for such calendar year shall be a lesser number of shares
of Common Stock than would otherwise occur pursuant to the
preceding sentence. For avoidance of doubt, none of the shares of
Common Stock available for issuance pursuant to this Section 4.1(b)
shall be issued in respect of Incentive Stock Options.

(c)             Shares
of Common Stock issued under the Plan may be either authorized but
unissued shares or shares held in the Company’s treasury. Any
shares of Common Stock subject to Awards that are settled in Common
Stock shall be counted against the maximum share limitations of
this Section 4.1 as one share of Common Stock for every share of
Common Stock subject thereto, regardless of the number of shares of
Common Stock actually issued to settle the Stock Option or Stock
Appreciation Right upon exercise. To the extent that any Award
under the Plan payable in shares of Common Stock is forfeited,
cancelled, returned to the Company for failure to satisfy vesting
requirements or upon the occurrence of other forfeiture events, or
otherwise terminates without payment being made thereunder, the
shares of Common Stock covered thereby will no longer be counted
against the foregoing maximum share limitations and may again be
made subject to Awards under the Plan pursuant to such limitations.
Shares of Common Stock that otherwise would have been issued upon
the exercise of a Stock Option or in payment with respect to any
other form of Award, that are surrendered in payment or partial
payment of taxes required to be withheld with respect to the
exercise of such Stock Option or the making of such payment, will
no longer be counted against the foregoing maximum share
limitations and may again be made subject to Awards under the Plan
pursuant to such limitations.

 

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4.2           Adjustments.
If there shall occur any change with respect to the outstanding
shares of Common Stock by reason of any recapitalization,
reclassification, stock dividend, extraordinary dividend, stock
split, reverse stock split, or other distribution with respect to
the shares of Common Stock, or any merger, reorganization,
consolidation, combination, spin-off or other similar corporate
change, or any other change affecting the Common Stock, the
Committee shall, in the manner and to the extent that it deems
appropriate and equitable to the Participants and consistent with
the terms of the Plan, cause an adjustment to be made in (i) the
maximum numbers and kind of shares provided in Section 4.1 hereof,
(ii) the numbers and kind of shares of Common Stock, units, or
other rights subject to then outstanding Awards, (iii) the price
for each share or unit or other right subject to then outstanding
Awards, (iv) the performance measures or goals relating to the
vesting of an Award and (v) any other terms of an Award that are
affected by the event to prevent dilution or enlargement of a
Participant’s rights under an Award. Notwithstanding the
foregoing, in the case of Incentive Stock Options, any such
adjustments shall, to the extent practicable, be made in a manner
consistent with the requirements of Section 424(a) of the
Code.

 

5.              Participation
and Awards

 

5.1           Designation
of Participants. All Eligible Persons are eligible to be
designated by the Committee to receive Awards and become
Participants under the Plan. The Committee has the authority, in
its discretion, to determine and designate from time to time those
Eligible Persons who are to be granted Awards, the types of Awards
to be granted and the number of shares of Common Stock or units
subject to Awards granted under the Plan. In selecting Eligible
Persons to be Participants and in determining the type and amount
of Awards to be granted under the Plan, the Committee shall
consider any and all factors that it deems relevant or
appropriate.

 

5.2           Determination
of Awards. The Committee shall determine the terms and
conditions of all Awards granted to Participants in accordance with
its authority under Section 3.2 hereof. An Award may consist of one
type of right or benefit hereunder or of two or more such rights or
benefits granted in tandem or in the alternative. To the extent
deemed appropriate by the Committee, an Award shall be evidenced by
an Award Agreement as described in Section 16.1
hereof.

 

6.              Stock
Options

 

6.1           Grant
of Stock Option. A Stock Option may be granted to any
Eligible Person selected by the Committee. Subject to the
provisions of Section 6.6 hereof and Section 422 of the Code, each
Stock Option shall be designated, in the discretion of the
Committee, as an Incentive Stock Option or as a Nonqualified Stock
Option.

6.2           Exercise
Price. The exercise price per share of a Stock Option shall
not be less than 100% of the Fair Market Value of a share of Common
Stock on the Date of Grant, subject to adjustments as provided for
under Section 4.2, provided that the Committee may in its
discretion specify for any Stock Option an exercise price per share
that is higher than the Fair Market Value on the Date of
Grant.

 

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6.3           Vesting
of Stock Options. The Committee shall in its discretion
prescribe the time or times at which, or the conditions upon which,
a Stock Option or portion thereof shall become vested and/or
exercisable. The requirements for vesting and exercisability of a
Stock Option may be based on the continued Service of the
Participant with the Company or a Subsidiary for a specified time
period (or periods) and/or on the attainment of a specified
performance goal (or goals) established by the Committee in its
discretion. The Committee may, in its discretion, accelerate the
vesting or exercisability of any Stock Option at any time. The
Committee in its sole discretion may allow a Participant to
exercise unvested Nonqualified Stock Options, in which case the
shares of Common Stock then issued shall be Restricted Stock having
analogous vesting restrictions to the unvested Nonqualified Stock
Options.

6.4           Term
of Stock Options. The Committee shall in its discretion
prescribe in an Award Agreement the period during which a vested
Stock Option may be exercised, provided that the maximum term of a
Stock Option shall be ten (10) years from the Date of Grant. A
Stock Option may be earlier terminated as specified by the
Committee and set forth in an Award Agreement upon or following the
termination of a Participant’s Service with the Company or
any Subsidiary, including by reason of voluntary resignation,
death, Disability, termination for Cause or any other reason.
Except as otherwise provided in this Section 6 or in an Award
Agreement as such agreement may be amended from time to time upon
authorization of the Committee, no Stock Option may be exercised at
any time during the term thereof unless the Participant is then in
the Service of the Company or one of its Subsidiaries.
Notwithstanding the foregoing, unless an Award Agreement provides
otherwise:

(a) If a Participant
who holds a Stock Option incurs a termination of Service with the
Company (including, if applicable, any of its Subsidiaries) by
reason of his or her death, such Stock Option may, to the extent
then exercisable, be exercised by such Participant’s estate
or any person who acquires the right to exercise such Stock Option
by bequest or inheritance at any time in accordance with its terms
for up to one year after the date of such Participant’s death
(but in no event after the earlier of the expiration of the term of
such Stock Option or such time as the Stock Option is otherwise
canceled or terminated in accordance with its terms). Upon
expiration of such one-year period, no portion of the Stock Option
held by such Participant shall be exercisable and the Stock Option
shall be deemed to be canceled, forfeited and of no further force
or effect.

(b) If a Participant
who holds a Stock Option incurs a termination of Service with the
Company (including, if applicable, any of its Subsidiaries) by
reason of his or her Disability, such Stock Option may, to the
extent then exercisable, be exercised by the Participant or his or
her personal representative at any time in accordance with its
terms for up to one year after the date of such Participant’s
termination of Service (but in no event after the earlier of the
expiration of the term of such Stock Option or such time as the
Stock Option is otherwise canceled or terminated in accordance with
its terms). Upon expiration of such one-year period, no portion of
the Stock Option held by such Participant shall be exercisable and
the Stock Option shall be deemed to be canceled, forfeited and of
no further force or effect.

(c) If a Participant
who holds a Stock Option incurs a termination of Service with the
Company (including, if applicable, any of its Subsidiaries) for any
reason other than death, Disability or Cause, such Stock Option
may, to the extent then exercisable, be exercised up until ninety
(90) days following such termination of Service (but in no event
after the earlier of the expiration of the term of such Stock
Option or such time as the Stock Option is otherwise canceled or
terminated in accordance with its terms). Upon expiration of such
90-day period, no portion of the Stock Option held by such
Participant shall be exercisable and the Stock Option shall be
deemed to be canceled, forfeited and of no further force or
effect.

 

10

 

 

6.5           Stock
Option Exercise. Subject to such terms and conditions as
shall be specified in an Award Agreement, a Stock Option may be
exercised in whole or in part at any time during the term thereof
by notice in the form required by the Company, and payment of the
aggregate exercise price by certified or bank check, or such other
means as the Committee may accept. As set forth in an Award
Agreement or otherwise determined by the Committee, in its sole
discretion, at or after grant, payment in full or in part of the
exercise price of an Option may be made: (i) in the form of shares
of Common Stock that have been held by the Participant for such
period as the Committee may deem appropriate for accounting
purposes or otherwise, valued at the Fair Market Value of such
shares on the date of exercise; (ii) by surrendering to the Company
shares of Common Stock otherwise receivable on exercise of the
Option; (iii) by a cashless exercise program implemented by the
Committee in connection with the Plan; and/or (iv) by such other
method as may be approved by the Committee and set forth in an
Award Agreement. Subject to any governing rules or regulations, as
soon as practicable after receipt of written notification of
exercise and full payment of the exercise price and satisfaction of
any applicable tax withholding pursuant to Section 17.5, the
Company shall deliver to the Participant evidence of book entry
shares of Common Stock, or upon the Participant’s request,
Common Stock certificates in an appropriate amount based upon the
number of shares of Common Stock purchased under the Option. Unless
otherwise determined by the Committee, all payments under all of
the methods indicated above shall be paid in United States dollars
or shares of Common Stock, as applicable.

 

6.6           Additional
Rules for Incentive Stock Options.

 

(a)             Eligibility.     An
Incentive Stock Option may only be granted to an Eligible Person
who is considered an employee under Treasury Regulation
§1.421-7(h) of the Company or any Subsidiary.

(b)             Annual
Limits.     No Incentive Stock
Option shall be granted to an Eligible Person as a result of which
the aggregate Fair Market Value (determined as of the Date of
Grant) of the stock with respect to which Incentive Stock Options
are exercisable for the first time in any calendar year under the
Plan and any other stock option plans of the Company or any
Subsidiary would exceed $100,000, determined in accordance with
Section 422(d) of the Code. This limitation shall be applied by
taking Incentive Stock Options into account in the order in which
granted.

(c)             Ten
Percent Stockholders.     If a
Stock Option granted under the Plan is intended to be an Incentive
Stock Option, and if the Participant, at the time of grant, owns
stock possessing ten percent or more of the total combined voting
power of all classes of Common Stock of the Company or any
Subsidiary, then (A) the Stock Option exercise price per share
shall in no event be less than 110% of the Fair Market Value of the
Common Stock on the date of such grant and (B) such Stock Option
shall not be exercisable after the expiration of five (5) years
following the date such Stock Option is granted.

 

11

 

(d)             Termination
of Employment.     An Award of an
Incentive Stock Option shall provide that such Stock Option may be
exercised not later than three (3) months following termination of
employment of the Participant with the Company and all
Subsidiaries, or not later than one (1) year following death or a
permanent and total disability within the meaning of Section
22(e)(3) of the Code, as and to the extent determined by the
Committee to be necessary to comply with the requirements of
Section 422 of the Code.

(e)             Disqualifying
Dispositions.     If shares of
Common Stock acquired by exercise of an Incentive Stock Option are
disposed of within two (2) years following the Date of Grant or one
(1) year following the transfer of such shares to the Participant
upon exercise, the Participant shall, promptly following such
disposition, notify the Company in writing of the date and terms of
such disposition and provide such other information regarding the
disposition as the Company may reasonably require.

 

7.              Stock
Appreciation Rights

 

7.1           Grant
of Stock Appreciation Rights. A Stock Appreciation Right may
be granted to any Eligible Person selected by the Committee. Stock
Appreciation Rights may be granted on a basis that allows for the
exercise of the right by the Participant or that provides for the
automatic payment of the right upon a specified date or
event.

7.2           Base
Price. The base price of a Stock Appreciation Right shall be
determined by the Committee in its sole discretion; provided,
however, that the base price for any grant of a Stock Appreciation
Right shall not be less than 100% of the Fair Market Value of a
share of Common Stock on the Date of Grant, subject to adjustments
as provided for under Section 4.2.

7.3           Vesting
Stock Appreciation Rights. The Committee shall in its
discretion prescribe the time or times at which, or the conditions
upon which, a Stock Appreciation Right or portion thereof shall
become vested and/or exercisable. The requirements for vesting and
exercisability of a Stock Appreciation Right may be based on the
continued Service of a Participant with the Company or a Subsidiary
for a specified time period (or periods) or on the attainment of a
specified performance goal (or goals) established by the Committee
in its discretion. The Committee may, in its discretion, accelerate
the vesting or exercisability of any Stock Appreciation Right at
any time.

7.4           Term
of Stock Appreciation Rights. The Committee shall in its
discretion prescribe in an Award Agreement the period during which
a vested Stock Appreciation Right may be exercised, provided that
the maximum term of a Stock Appreciation Right shall be ten (10)
years from the Date of Grant. A Stock Appreciation Right may be
earlier terminated as specified by the Committee and set forth in
an Award Agreement upon or following the termination of a
Participant’s Service with the Company or any Subsidiary,
including by reason of voluntary resignation, death, Disability,
termination for Cause or any other reason. Except as otherwise
provided in this Section 7 or in an Award Agreement as such
agreement may be amended from time to time upon authorization of
the Committee, no Stock Appreciation Right may be exercised at any
time during the term thereof unless the Participant is then in the
Service of the Company or one of its Subsidiaries.

 

12

 

7.5           Payment
of Stock Appreciation Rights. Subject to such terms and
conditions as shall be specified in an Award Agreement, a vested
Stock Appreciation Right may be exercised in whole or in part at
any time during the term thereof by notice in the form required by
the Company and payment of any exercise price. Upon the exercise of
a Stock Appreciation Right and payment of any applicable exercise
price, a Participant shall be entitled to receive an amount
determined by multiplying: (i) the excess of the Fair Market Value
of a share of Common Stock on the date of exercise of the Stock
Appreciation Right over the base price of such Stock Appreciation
Right, by (ii) the number of shares as to which such Stock
Appreciation Right is exercised. Payment of the amount determined
under the immediately preceding sentence may be made, as approved
by the Committee and set forth in the Award Agreement, in shares of
Common Stock valued at their Fair Market Value on the date of
exercise, in cash, or in a combination of shares of Common Stock
and cash, subject to applicable tax withholding requirements set
forth in Section 17.5. If Stock Appreciation Rights are settled in
shares of Common Stock, then as soon as practicable following the
date of settlement the Company shall deliver to the Participant
evidence of book entry shares of Common Stock, or upon the
Participant’s request, Common Stock certificates in an
appropriate amount.

 

8.            Restricted
Stock Awards

 

8.1           Grant
of Restricted Stock Awards. A Restricted Stock Award may be
granted to any Eligible Person selected by the Committee. The
Committee may require the payment by the Participant of a specified
purchase price in connection with any Restricted Stock Award. The
Committee may provide in an Award Agreement for the payment of
dividends and distributions to the Participant at such times as
paid to stockholders generally or at the times of vesting or other
payment of the Restricted Stock Award. If any dividends or
distributions are paid in stock while a Restricted Stock Award is
subject to restrictions under Section 8.3 of the Plan or Code
Section 162(m), the dividends or other distributions shares shall
be subject to the same restrictions on transferability as the
shares of Common Stock to which they were paid unless otherwise set
forth in the Award Agreement. The Committee may also subject the
grant of any Restricted Stock Award to the execution of a voting
agreement with the Company or with any Affiliate of the
Company.

8.2           Vesting
Requirements. The restrictions imposed on shares of Common
Stock granted under a Restricted Stock Award shall lapse in
accordance with the vesting requirements specified by the Committee
in the Award Agreement. Upon vesting of a Restricted Stock Award,
such Award shall be subject to the tax withholding requirement set
forth in Section 17.5. The requirements for vesting of a Restricted
Stock Award may be based on the continued Service of the
Participant with the Company or its Subsidiaries for a specified
time period (or periods) or on the attainment of a specified
performance goal (or goals) established by the Committee in its
discretion. The Committee may, in its discretion, accelerate the
vesting of a Restricted Stock Award at any time. If the vesting
requirements of a Restricted Stock Award shall not be satisfied,
the Award shall be forfeited and the shares of Common Stock subject
to the Award shall be returned to the Company. In the event that
the Participant paid any purchase price with respect to such
forfeited shares, unless otherwise provided by the Committee in an
Award Agreement, the Company will refund to the Participant the
lesser of (i) such purchase price and (ii) the Fair Market Value of
such shares on the date of forfeiture.

 

13

 

8.3           Restrictions.
Shares granted under any Restricted Stock Award may not be
transferred, assigned or subject to any encumbrance, pledge, or
charge until all applicable restrictions are removed or have
expired, unless otherwise allowed by the Committee. The Committee
may require in an Award Agreement that certificates representing
the shares granted under a Restricted Stock Award bear a legend
making appropriate reference to the restrictions imposed, and that
certificates representing the shares granted or sold under a
Restricted Stock Award will remain in the physical custody of an
escrow holder until all restrictions are removed or have
expired.

8.4           Rights
as Stockholder. Subject to the foregoing provisions of this
Section 8 and the applicable Award Agreement, the Participant to
whom a Restricted Stock Award is made shall have all rights of a
stockholder with respect to the shares granted to the Participant
under the Restricted Stock Award, including the right to vote the
shares and receive all dividends and other distributions paid or
made with respect thereto, unless the Committee determines
otherwise at the time the Restricted Stock Award is
granted.

8.5           Section
83(b) Election. If a Participant makes an election pursuant
to Section 83(b) of the Code with respect to a Restricted Stock
Award, the Participant shall file, within 30 days following the
Date of Grant, a copy of such election with the Company (directed
to the Secretary thereof) and with the Internal Revenue Service, in
accordance with the regulations under Section 83 of the Code. The
Committee may provide in an Award Agreement that the Restricted
Stock Award is conditioned upon the Participant’s making or
refraining from making an election with respect to the Award under
Section 83(b) of the Code.

 

9.              Stock
Unit Awards

 

9.1           Grant
of Stock Unit Awards. A Stock Unit Award may be granted to
any Eligible Person selected by the Committee. The value of each
stock unit under a Stock Unit Award is equal to the Fair Market
Value of the Common Stock on the applicable date or time period of
determination, as specified by the Committee. A Stock Unit Award
shall be subject to such restrictions and conditions as the
Committee shall determine. A Stock Unit Award may be granted
together with a dividend equivalent right with respect to the
shares of Common Stock subject to the Award, which may be
accumulated and may be deemed reinvested in additional stock units,
as determined by the Committee in its discretion. If any dividend
equivalents are paid while a Stock Unit Award is subject to
restrictions under Section 9 of the Plan or Code Section 162(m),
the dividend equivalents shall be subject to the same restrictions
on transferability as the Stock Units to which they were paid,
unless otherwise set forth in the Award Agreement.

 

14

 

9.2           Vesting
of Stock Unit Awards. On the Date of Grant, the Committee
shall, in its discretion, determine any vesting requirements with
respect to a Stock Unit Award, which shall be set forth in the
Award Agreement. The requirements for vesting of a Stock Unit Award
may be based on the continued Service of the Participant with the
Company or its Subsidiaries for a specified time period (or
periods) or on the attainment of a specified performance goal (or
goals) established by the Committee in its discretion. The
Committee may, in its discretion, accelerate the vesting of a Stock
Unit Award at any time. A Stock Unit Award may also be granted on a
fully vested basis, with a deferred payment date as may be
determined by the Committee or elected by the Participant in
accordance with rules established by the Committee.

9.3           Payment
of Stock Unit Awards. A Stock Unit Award shall become
payable to a Participant at the time or times determined by the
Committee and set forth in the Award Agreement, which may be upon
or following the vesting of the Award. Payment of a Stock Unit
Award may be made, at the discretion of the Committee, in cash or
in shares of Common Stock, or in a combination thereof as described
in the Award Agreement, subject to applicable tax withholding
requirements set forth in Section 17.5. Any cash payment of a Stock
Unit Award shall be made based upon the Fair Market Value of the
Common Stock, determined on such date or over such time period as
determined by the Committee. Notwithstanding the foregoing, unless
specified otherwise in the Award Agreement, any Stock Unit, whether
settled in Common Stock or cash, shall be paid no later than two
and one-half months after the later of the calendar year or fiscal
year in which the Stock Units vest. If Stock Unit Awards are
settled in shares of Common Stock, then as soon as practicable
following the date of settlement, the Company shall deliver to the
Participant evidence of book entry shares of Common Stock, or upon
the Participant’s request, Common Stock certificates in an
appropriate amount.

 

10.              Performance
Shares

 

10.1           Grant
of Performance Shares. Performance Shares may be granted to
any Eligible Person selected by the Committee. A Performance Share
Award shall be subject to such restrictions and condition as the
Committee shall specify. A Performance Share Award may be granted
with a dividend equivalent right with respect to the shares of
Common Stock subject to the Award, which may be accumulated and may
be deemed reinvested in additional stock units, as determined by
the Committee in its discretion.

10.2           Value
of Performance Shares. Each Performance Share shall have an
initial value equal to the Fair Market Value of a Share on the Date
of Grant. The Committee shall set performance goals in its
discretion that, depending on the extent to which they are met over
a specified time period, shall determine the number of Performance
Shares that shall be paid to a Participant.

10.3           Earning
of Performance Shares. After the applicable time period has
ended, the number of Performance Shares earned by the Participant
over such time period shall be determined as a function of the
extent to which the applicable corresponding performance goals
have been achieved. This determination shall be made solely by the
Committee. The Committee may, in its discretion, waive any
performance or vesting conditions relating to a Performance Share
Award.

 

15

 

10.4           Form
and Timing of Payment of Performance Shares. The Committee
shall pay at the close of the applicable Performance Period, or as
soon as practicable thereafter, any earned Performance Shares in
the form of cash or in shares of Common Stock or in a combination
thereof, as specified in a Participant’s Award Agreement,
subject to applicable tax withholding requirements set forth in
Section 17.5. Notwithstanding the foregoing, unless specified
otherwise in the Award Agreement, all Performance Shares shall be
paid no later than two and one-half months following the later of
the calendar year or fiscal year in which such Performance Shares
vest. Any shares of Common Stock paid to a Participant under this
Section 10.4 may be subject to any restrictions deemed appropriate
by the Committee. If Performance Shares are settled in shares of
Common Stock, then as soon as practicable following the date of
settlement the Company shall deliver to the Participant evidence of
book entry shares of Common Stock, or upon the Participant’s
request, Common Stock certificates in an appropriate
amount.

 

11.          Performance
Units

 

11.1           Grant
of Performance Units. Performance Units may be granted to
any Eligible Person selected by the Committee. A Performance Unit
Award shall be subject to such restrictions and condition as the
Committee shall specify in a Participant’s Award
Agreement.

11.2           Value
of Performance Units. Each Performance Unit shall have an
initial notional value equal to a dollar amount determined by the
Committee, in its sole discretion. The Committee shall set
performance goals in its discretion that, depending on the extent
to which they are met over a specified time period, will determine
the number of Performance Units that shall be settled and paid to
the Participant.

11.3           Earning
of Performance Units. After the applicable time period has
ended, the number of Performance Units earned by the Participant,
and the amount payable in cash, in shares or in a combination
thereof, over such time period shall be determined as a function of
the extent to which the applicable corresponding performance
goals have been achieved. This determination shall be made solely
by the Committee. The Committee may, in its discretion, waive any
performance or vesting conditions relating to a Performance Unit
Award

11.4           Form
and Timing of Payment of Performance Units. The Committee
shall pay at the close of the applicable Performance Period, or as
soon as practicable thereafter, any earned Performance Units in the
form of cash or in shares of Common Stock or in a combination
thereof, as specified in a Participant’s Award Agreement,
subject to applicable tax withholding requirements set forth in
Section 17.5. Notwithstanding the foregoing, unless specified
otherwise in the Award Agreement, all Performance Units shall be
paid no later than two and one-half months following the later of
the calendar year or fiscal year in which such Performance Units
vest. Any shares of Common Stock paid to a Participant under this
Section 11.4 may be subject to any restrictions deemed appropriate
by the Committee. If Performance Units are settled in shares of
Common Stock, then as soon as practicable following the date of
settlement the Company shall deliver to the Participant evidence of
book entry shares of Common Stock, or upon the Participant’s
request, Common Stock certificates in an appropriate
amount.

 

16

 

12.            Incentive
Bonus Awards

12.1           Incentive
Bonus Awards. The Committee, at its discretion, may grant
Incentive Bonus Awards to such Participants as it may designate
from time to time. The terms of a Participant’s Incentive
Bonus Award shall be set forth in the Participant’s Award
Agreement. Each Award Agreement shall specify such general terms
and conditions as the Committee shall determine.

12.2           Incentive
Bonus Award Performance Criteria. The determination of
Incentive Bonus Awards for a given year or years may be based upon
the attainment of specified levels of Company or Subsidiary
performance as measured by pre-established, objective performance
criteria determined at the discretion of the Committee, including
any or all of the Performance Measures set forth in Exhibit A hereto. The Committee
shall (i) select those Participants who shall be eligible to
receive an Incentive Bonus Award, (ii) determine the performance
period, (iii) determine target levels of performance, and (iv)
determine the level of Incentive Bonus Award to be paid to each
selected Participant upon the achievement of each performance
level. The Committee generally shall make the foregoing
determinations prior to the commencement of services to which an
Incentive Bonus Award relates (or for Incentive Bonus Awards
intended to satisfy Code Section 162(m), within the permissible
time period established for exemption under Code Section 162(m) and
the regulations promulgated thereunder), to the extent applicable,
and while the outcome of the performance goals and targets is
uncertain.

12.3           Payment
of Incentive Bonus Awards.

(a)
Incentive Bonus Awards shall be paid in cash or Common Stock, as
set forth in a Participant’s Award Agreement. Payments shall
be made following a determination by the Committee that the
performance targets were attained and shall be made within two and
one-half months after the later of the end of the fiscal or
calendar year in which the Incentive Award is no longer subject to
a substantial risk of forfeiture.

(b) The
amount of an Incentive Bonus Award to be paid upon the attainment
of each targeted level of performance shall equal a percentage of a
Participant’s base salary for the fiscal year, a fixed dollar
amount, or such other formula, as determined by the
Committee.

13. Other
Cash-Based Awards and Other Stock-Based Awards

13.1           Other
Cash-Based and Stock-Based Awards. The Committee may grant
other types of equity-based or equity-related Awards not otherwise
described by the terms of this Plan (including the grant or offer
for sale of unrestricted Shares) in such amounts and subject to
such terms and conditions, as the Committee shall determine. Such
Awards may involve the transfer of actual shares of Common Stock to
a Participant, or payment in cash or otherwise of amounts based on
the value of shares of Common Stock. In addition, the Committee, at
any time and from time to time, may grant Cash-Based Awards to a
Participant in such amounts and upon such terms as the Committee
shall determine, in its sole discretion.

 

17

 

13.2
Value of Cash-Based Awards
and Other Stock-Based Awards. Each Other Stock-Based Award
shall be expressed in terms of shares of Common Stock or units
based on shares of Common Stock, as determined by the Committee, in
its sole discretion. Each Other Cash-Based Award shall specify a
payment amount or payment range as determined by the Committee, in
its sole discretion. If the Committee exercises its discretion to
establish performance goals, the value of Other Cash-Based Awards
that shall be paid to the Participant will depend on the extent to
which such performance goals are met.

13.3
Payment of Cash-Based
Awards and Other Stock-Based Awards. Payment, if any, with
respect to Other Cash-Based Awards and Other Stock-Based Award
shall be made in accordance with the terms of the Award, in cash or
Shares as the Committee determines.

 

14.
Section 162(m) Awards

 

14.1
Awards Granted Under Code
Section 162(m). The Committee, at its discretion, may
designate that a Restricted Stock, Stock Unit, Performance Share,
Performance Unit, Incentive Bonus, Other Stock Award or Other Cash
Award shall be granted as a Section 162(m) Award. Such an Award
must comply with the following additional requirements, which shall
control over any other provision that pertains to such
Award.

 

14.2
Performance
Measures.

 

(a)
Each Section 162(m) Award shall be based upon the attainment of
specified levels of pre-established, objective Performance Measures
that are intended to satisfy the performance based compensation
exemption requirements of Code Section 162(m) and the regulations
promulgated thereunder. Further, at the discretion of the
Committee, an Award also may be subject to goals and restrictions
in addition to the Performance Measures.

 

(b)
“Performance Measures” means the measures of
performance of the Company and its Subsidiaries used to determine a
Participant’s entitlement to an Award under the Plan. Such
performance measures shall have the same meanings as used in the
Company’s financial statements, or, if such terms are not
used in the Company’s financial statements, they shall have
the meaning applied pursuant to generally accepted accounting
principles, or as used generally in the Company’s industry.
Performance Measures shall be calculated with respect to the
Company and each Subsidiary consolidated therewith for financial
reporting purposes or such division or other business unit as may
be selected by the Committee. For purposes of the Plan, the
Performance Measures shall be calculated in accordance with
generally accepted accounting principles to the extent applicable,
but, unless otherwise determined by the Committee, prior to the
accrual or payment of any Award under this Plan for the same
performance period and excluding the effect (whether positive or
negative) of any change in accounting standards or any
extraordinary, unusual or nonrecurring item, as determined by the
Committee, occurring after the establishment of the performance
goals. Performance Measures shall be based on one or more of the
criteria set forth in Exhibit A which is hereby incorporated by
reference, as determined by the Committee.

 

18

 

(c)             For
each Section 162(m) Award, the Committee shall (i) select the
Participant who shall be eligible to receive a Section 162(m)
Award, (ii) determine the applicable performance period, (iii)
determine the target levels of the Company or Subsidiary
Performance Measures, and (iv) determine the number of shares of
Common Stock or cash or other property (or combination thereof)
subject to an Award to be paid to each selected Participant. The
Committee shall make the foregoing determinations prior to the
commencement of services to which an Award relates (or within the
permissible time period established under Code Section 162(m)) and
while the outcome of the performance goals and targets is
uncertain.

 

14.3                Attainment
of Code Section 162(m) Goals.

 

(a)             After
each performance period, the Committee shall certify in writing
(which may include the written minutes for any meeting of the
Committee): (i) if the Company has attained the performance
targets, and (ii) the number of shares pursuant to the Award that
are to become freely transferable, if applicable, or the cash or
other property payable under the Award. The Committee shall have no
discretion to waive all or part of the conditions, goals and
restrictions applicable to the receipt of full or partial payment
of an Award except in the case of a Change in Control of the
Corporation or the death or Disability of a
Participant.

(b)             Notwithstanding
the foregoing, the Committee may, in its discretion, reduce any
Award based on such factors as may be determined by the Committee,
including, without limitation, a determination by the Committee
that such a reduction is appropriate in light of pay practices of
competitors, or the performance of the Company, a Subsidiary or a
Participant relative to the performance of competitors, or
performance with respect to the Company’s strategic business
goals.

 

14.4                Individual
Participant Limitations. Subject to adjustment as provided
in Section 4.2, the maximum number of shares of Common Stock with
respect to which Stock Options or Stock Appreciation Rights may be
granted to any one individual under the Plan during any calendar
year shall be 500,000 shares. Subject to adjustment as provided in
Section 4.2, the maximum number of shares of Common Stock subject
to Section 162(m) Awards (other than Stock Options and Stock
Appreciation Rights) that may be paid to any one individual in
respect of any calendar year if the applicable Performance Goals
are attained is 500,000 shares. The maximum cash amount that may be
paid pursuant to Section 162(m) Awards (other than Stock Options
and Stock Appreciation Rights) to any one individual in respect of
any calendar year if the applicable Performance Goals are attained
is $1,000,000. In the case of Performance Goals based on
performance periods beginning and ending in different calendar
years, the number of shares of Common Stock or cash amount which is
paid in respect of each calendar year during the performance period
shall be determined by multiplying the total number of shares or
cash amount, as applicable, paid for the performance period by a
fraction, of which (i) the numerator is the number of days during
the performance period in that particular calendar year, and (ii)
the denominator is the total number of days during the performance
period. The limitations in this Section 14.4 shall be interpreted
and applied in a manner consistent with Section 162(m) of the Code
and the regulations thereunder. If an Award is cancelled, the
cancelled Award shall continue to be counted towards the applicable
limitations.

 

 

19

 

15.          Change
in Control

 

15.1                Effect
of Change in Control.

 

(a)             The
Committee may, at the time of the grant of an Award and as set
forth in an Award Agreement, provide for the effect of a
“Change in Control” on an Award. Such provisions may
include any one or more of the following: (i) the acceleration or
extension of time periods for purposes of exercising, vesting in,
or realizing gain from any Award, (ii) the elimination or
modification of performance or other conditions related to the
payment or other rights under an Award, (iii) provision for the
cash settlement of an Award for an equivalent cash value, as
determined by the Committee, or (iv) such other modification or
adjustment to an Award as the Committee deems appropriate to
maintain and protect the rights and interests of Participants upon
or following a Change in Control. To the extent necessary for
compliance with Section 409A of the Code, an Award Agreement shall
provide that an Award subject to the requirements of Section 409A
that would otherwise become payable upon a Change in Control shall
only become payable to the extent that the requirements for a
“change in control” for purposes of Section 409A have
been satisfied.

(b)             Notwithstanding
anything to the contrary set forth in the Plan, unless otherwise
provided by an Award Agreement, upon or in anticipation of any
Change in Control, the Committee may, in its sole and absolute
discretion and without the need for the consent of any Participant,
take one or more of the following actions contingent upon the
occurrence of that Change in Control: (i) cause any or all
outstanding Stock Options and Stock Appreciation Rights held by
Participants affected by the Change in Control to become vested and
immediately exercisable, in whole or in part; (ii) cause any or all
outstanding Restricted Stock, Stock Units, Performance Shares,
Performance Units, Incentive Bonus Award and any other
Award held by
Participants affected by the Change in Control to become
non-forfeitable, in whole or in part; (iii) cancel any Stock Option
or Stock Appreciation Right in exchange for a substitute option in
a manner consistent with the requirements of Treasury
Regulation. §1.424-1(a) (notwithstanding the fact that
the original Stock Option may never have been intended to satisfy
the requirements for treatment as an Incentive Stock Option); (iv)
cancel any Restricted Stock, Stock Units, Performance Shares or
Performance Units held by a Participant in exchange for restricted
stock or performance shares of or stock or performance units in
respect of the capital stock of any successor corporation; (v)
redeem any Restricted Stock held by a Participant affected by the
Change in Control for cash and/or other substitute consideration
with a value equal to the Fair Market Value of an unrestricted
share of Common Stock on the date of the Change in Control; (vi)
cancel any Stock Option or Stock Appreciation Right held by a
Participant affected by the Change in Control in exchange for cash
and/or other substitute consideration with a value equal to (A) the
number of shares of Common Stock subject to that Stock Option or
Stock Appreciation Right, multiplied by (B) the difference, if any,
between the Fair Market Value per share of Common Stock on the date
of the Change in Control and the exercise price of that Stock
Option or Stock Appreciation Right; provided, that if the Fair Market Value
per share of Common Stock on the date of the Change in Control does
not exceed the exercise price of any such Stock Option or Stock
Appreciation Right, the Committee may cancel that Stock Option or
Stock Appreciation Right without any payment of consideration
therefor; (vii) cancel any Stock Unit or Performance Unit held by a
Participant affected by the Change in Control in exchange for cash
and/or other substitute consideration with a value equal to the
Fair Market Value per share of Common Stock on the date of the
Change in Control (provided that such cancelation and exchange does
not violate Section 409A of the Code); or (ix) make such other
modifications, adjustments or amendments to outstanding Awards or
this Plan as the Committee deems necessary or
appropriate.

 

20

 

 

16.          General
Provisions

 

16.1                Award
Agreement. To the extent deemed necessary by the Committee,
an Award under the Plan shall be evidenced by an Award Agreement in
a written or electronic form approved by the Committee setting
forth the number of shares of Common Stock or units subject to the
Award, the exercise price, base price, or purchase price of the
Award, the time or times at which an Award will become vested,
exercisable or payable and the term of the Award. The Award
Agreement may also set forth the effect on an Award of termination
of Service under certain circumstances. The Award Agreement shall
be subject to and incorporate, by reference or otherwise, all of
the applicable terms and conditions of the Plan, and may also set
forth other terms and conditions applicable to the Award as
determined by the Committee consistent with the limitations of the
Plan. Award Agreements evidencing Incentive Stock Options shall
contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 422 of the Code. The grant of an
Award under the Plan shall not confer any rights upon the
Participant holding such Award other than such terms, and subject
to such conditions, as are specified in the Plan as being
applicable to such type of Award (or to all Awards) or as are
expressly set forth in the Award Agreement.

16.2                Forfeiture
Events/Representations. The Committee may specify in an
Award Agreement at the time of the Award that the
Participant’s rights, payments and benefits with respect to
an Award shall be subject to reduction, cancellation, forfeiture or
recoupment upon the occurrence of certain specified events, in
addition to any otherwise applicable vesting or performance
conditions of an Award. Such events shall include, but shall not be
limited to, termination of Service for Cause, violation of material
Company policies, breach of noncompetition, confidentiality or
other restrictive covenants that may apply to the Participant, or
other conduct by the Participant that is detrimental to the
business or reputation of the Company. The Committee may also
specify in an Award Agreement that the Participant’s rights,
payments and benefits with respect to an Award shall be conditioned
upon the Participant making a representation regarding compliance
with noncompetition, confidentiality or other restrictive covenants
that may apply to the Participant and providing that the
Participant’s rights, payments and benefits with respect to
an Award shall be subject to reduction, cancellation, forfeiture or
recoupment on account of a breach of such representation.
In addition and without limitation of
the foregoing, any amounts paid hereunder shall be subject to
recoupment in accordance with The Dodd–Frank Wall Street
Reform and Consumer Protection Act and any implementing regulations
thereunder, any “clawback” policy adopted by the
Company or as is otherwise required by applicable law or stock
exchange listing condition.

 

21

 

16.3                No
Assignment or Transfer; Beneficiaries.

 

(a)             Awards
under the Plan shall not be assignable or transferable by the
Participant, except by will or by the laws of descent and
distribution, and shall not be subject in any manner to assignment,
alienation, pledge, encumbrance or charge. Notwithstanding the
foregoing, the Committee may provide in an Award Agreement that the
Participant shall have the right to designate a beneficiary or
beneficiaries who shall be entitled to any rights, payments or
other benefits specified under an Award following the
Participant’s death. During the lifetime of a Participant, an
Award shall be exercised only by such Participant or such
Participant’s guardian or legal representative. In the event
of a Participant’s death, an Award may, to the extent
permitted by the Award Agreement, be exercised by the
Participant’s beneficiary as designated by the Participant in
the manner prescribed by the Committee or, in the absence of an
authorized beneficiary designation, by the legatee of such Award
under the Participant’s will or by the Participant’s
estate in accordance with the Participant’s will or the laws
of descent and distribution, in each case in the same manner and to
the same extent that such Award was exercisable by the Participant
on the date of the Participant’s death.

(b)             Limited
Transferability Rights. Notwithstanding anything else in
this Section 16.3 to the contrary, the Committee may in its
discretion provide in an Award Agreement that an Award in the form
of a Nonqualified Stock Option, share-settled Stock Appreciation
Right, Restricted Stock, Performance Share or share-settled Other
Stock-Based Award may be transferred, on such terms and conditions
as the Committee deems appropriate, either (i) by instrument to the
Participant’s “Immediate Family” (as defined
below), (ii) by instrument to an inter vivos or testamentary trust
(or other entity) in which the Award is to be passed to the
Participant’s designated beneficiaries, or (iii) by gift to
charitable institutions. Any transferee of the Participant’s
rights shall succeed and be subject to all of the terms of the
applicable Award Agreement and the Plan. “Immediate
Family” means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece,
nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, and shall include adoptive
relationships.

 

16.4                Rights
as Stockholder. A Participant shall have no rights as a
holder of shares of Common Stock with respect to any unissued
securities covered by an Award until the date the Participant
becomes the holder of record of such securities. Except as provided
in Section 4.2 hereof, no adjustment or other provision shall be
made for dividends or other stockholder rights, except to the
extent that the Award Agreement provides for dividend payments or
dividend equivalent rights.

16.5                Employment
or Service. Nothing in the Plan, in the grant of any Award
or in any Award Agreement shall confer upon any Eligible Person or
Participant any right to continue in the Service of the Company or
any of its Subsidiaries, or interfere in any way with the right of
the Company or any of its Subsidiaries to terminate the employment
or other service relationship of an Eligible Person or Participant
for any reason at any time.

 

22

 

16.6                Fractional
Shares. In the case of any fractional share or unit
resulting from the grant, vesting, payment or crediting of
dividends or dividend equivalents under an Award, the Committee
shall have the discretionary authority to (i) disregard such
fractional share or unit, (ii) round such fractional share or unit
to the nearest lower or higher whole share or unit, or (iii)
convert such fractional share or unit into a right to receive a
cash payment.

16.7                Other
Compensation and Benefit Plans. The amount of any
compensation deemed to be received by a Participant pursuant to an
Award shall not constitute includable compensation for purposes of
determining the amount of benefits to which a Participant is
entitled under any other compensation or benefit plan or program of
the Company or any Subsidiary, including, without limitation, under
any bonus, pension, profit-sharing, life insurance, salary
continuation or severance benefits plan, except to the extent
specifically provided by the terms of any such plan.

16.8                Plan
Binding on Transferees. The Plan shall be binding upon the
Company, its transferees and assigns, and the Participant, the
Participant’s executor, administrator and permitted
transferees and beneficiaries. In addition, all obligations of the
Company under this Plan with respect to Awards granted hereunder
shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the
Company.

16.9                Foreign
Jurisdictions. The Committee may adopt, amend and terminate
such arrangements and grant such Awards, not inconsistent with the
intent of the Plan, as it may deem necessary or desirable to comply
with any tax, securities, regulatory or other laws of other
jurisdictions with respect to Awards that may be subject to such
laws. The terms and conditions of such Awards may vary from the
terms and conditions that would otherwise be required by the Plan
solely to the extent the Committee deems necessary for such
purpose. Moreover, the Board may approve such supplements to or
amendments, restatements or alternative versions of the Plan, not
inconsistent with the intent of the Plan, as it may consider
necessary or appropriate for such purposes, without thereby
affecting the terms of the Plan as in effect for any other
purpose.

16.10                Substitute
Awards in Corporate Transactions. Nothing contained in the
Plan shall be construed to limit the right of the Committee to
grant Awards under the Plan in connection with the acquisition,
whether by purchase, merger, consolidation or other corporate
transaction, of the business or assets of any corporation or other
entity. Without limiting the foregoing, the Committee may grant
Awards under the Plan to an employee or director of another
corporation who becomes an Eligible Person by reason of any such
corporate transaction in substitution for awards previously granted
by such corporation or entity to such person. The terms and
conditions of the substitute Awards may vary from the terms and
conditions that would otherwise be required by the Plan solely to
the extent the Committee deems necessary for such purpose. Any
shares of Common Stock subject to these substitute Awards shall not
be counted against any of the maximum share limitations set forth
in the Plan.

 

 

23

 

17.          Legal
Compliance

 

17.1                Securities
Laws. No shares of Common Stock will be issued or
transferred pursuant to an Award unless and until all then
applicable requirements imposed by Federal and state securities and
other laws, rules and regulations and by any regulatory agencies
having jurisdiction, and by any exchanges upon which the shares of
Common Stock may be listed, have been fully met. As a condition
precedent to the issuance of shares pursuant to the grant or
exercise of an Award, the Company may require the Participant to
take any reasonable action to meet such requirements. The Committee
may impose such conditions on any shares of Common Stock issuable
under the Plan as it may deem advisable, including, without
limitation, restrictions under the Securities Act, as amended,
under the requirements of any exchange upon which such shares of
the same class are then listed, and under any blue sky or other
securities laws applicable to such shares. The Committee may also
require the Participant to represent and warrant at the time of
issuance or transfer that the shares of Common Stock are being
acquired only for investment purposes and without any current
intention to sell or distribute such shares. All Common Stock
issued pursuant to the terms of this Plan shall constitute
“restricted securities,” as that term is defined in
Rule 144 promulgated pursuant to the Securities Act, and may not be
transferred except in compliance herewith and with the registration
requirements of the Securities Act or an exemption therefrom.
Certificates representing Common Stock acquired pursuant to an
Award may bear such legend as the Company may consider appropriate
under the circumstances. If an Award is made to an Eligible Person
who is subject to Chinese jurisdiction, and approval of the Award
by China’s State Administration of Foreign Exchange is
needed, the Award may be converted to cash or other equivalent
amount if and to the extent that such
approval is not obtained.

17.2                Incentive
Arrangement. The Plan is designed to provide an on-going,
pecuniary incentive for Participants to produce their best efforts
to increase the value of the Company. The Plan is not intended to
provide retirement income or to defer the receipt of payments
hereunder to the termination of a Participant’s employment or
beyond. The Plan is thus intended not to be a pension or welfare
benefit plan that is subject to Employee Retirement Income Security
Act of 1974 (“ERISA”), and shall be construed
accordingly. All interpretations and determinations hereunder shall
be made on a basis consistent with the Plan’s status as not
an employee benefit plan subject to ERISA.

17.3                Unfunded
Plan. The adoption of the Plan and any reservation of shares
of Common Stock or cash amounts by the Company to discharge its
obligations hereunder shall not be deemed to create a trust or
other funded arrangement. Except upon the issuance of Common Stock
pursuant to an Award, any rights of a Participant under the Plan
shall be those of a general unsecured creditor of the Company, and
neither a Participant nor the Participant’s permitted
transferees or estate shall have any other interest in any assets
of the Company by virtue of the Plan. Notwithstanding the
foregoing, the Company shall have the right to implement or set
aside funds in a grantor trust, subject to the claims of the
Company’s creditors or otherwise, to discharge its
obligations under the Plan.

 

24

 

17.4
Section 409A
Compliance. To the extent applicable, it is intended that
the Plan and all Awards hereunder comply with the requirements of
Section 409A of the Code or an exemption thereto, and the Plan and
all Award Agreements shall be interpreted and applied by the
Committee in a manner consistent with this intent in order to avoid
the imposition of any additional tax under Section 409A of the
Code. Notwithstanding anything in the Plan or an Award Agreement to
the contrary, in the event that any provision of the Plan or an
Award Agreement is determined by the Committee, in its sole
discretion, to not comply with the requirements of Section 409A of
the Code or an exemption thereto, the Committee shall, in its sole
discretion, have the authority to take such actions and to make
such interpretations or changes to the Plan or an Award Agreement
as the Committee deems necessary, regardless of whether such
actions, interpretations, or changes shall adversely affect a
Participant, subject to the limitations, if any, of applicable law.
In no event whatsoever shall the Company be liable for any
additional tax, interest or penalties that may be imposed on any
Participant by Section 409A of the Code or any damages for failing
to comply with Section 409A of the Code.

 

17.5
Tax
Withholding.

 

(a) The
Company shall have the power and the right to deduct or withhold,
or require a participant to remit to the Company, the minimum
statutory amount to satisfy federal, state, and local taxes,
domestic or foreign, required by law or regulation to be withheld
with respect to any taxable event arising as a result of this Plan,
but in no event shall such deduction or withholding or remittance
exceed the minimum statutory withholding requirements. Notwithstanding the foregoing, if a minimum
statutory amount of withholding does not apply under the laws of
any foreign jurisdiction, the Company may withhold such amount for
remittance to the applicable taxing authority of such jurisdiction
as the Company determines in its discretion, uniformly applied, to
be appropriate.

 

(b) A Participant may, in order to fulfill the
withholding obligation, tender previously-acquired shares of Common
Stock or have shares of stock withheld from the exercise, provided
that the shares have an aggregate Fair Market Value sufficient to
satisfy in whole or in part the applicable withholding taxes. The
broker-assisted exercise procedure described in Section 6.5 may
also be utilized to satisfy the withholding requirements related to
the exercise of a Stock Option.

 

(c) Notwithstanding the foregoing, a Participant
may not use shares of Common Stock to satisfy the withholding
requirements to the extent that (i) there is a substantial
likelihood that the use of such form of payment or the timing of
such form of payment would subject the Participant to a substantial
risk of liability under Section 16 of the Exchange Act; or (ii)
such withholding would constitute a violation of the provisions of
any law or regulation (including the Sarbanes-Oxley Act of
2002).

 

17.6
No Guarantee of Tax
Consequences. Neither the Company, the Board, the Committee
nor any other Person make any commitment or guarantee that any
federal, state, local or foreign tax treatment will apply or be
available to any Participant or any other person
hereunder.

 

 

25

 

17.7                Severability.
If any provision of the Plan or any Award Agreement shall be
determined to be illegal or unenforceable by any court of law in
any jurisdiction, the remaining provisions hereof and thereof shall
be severable and enforceable in accordance with their terms, and
all provisions shall remain enforceable in any other
jurisdiction.

17.8                Stock
Certificates; Book Entry Form. Notwithstanding
any provision of the Plan to the contrary, unless otherwise
determined by the Committee or required by any applicable law, rule
or regulation, any obligation set forth in the Plan pertaining to
the delivery or issuance of stock certificates evidencing shares of
Common Stock may be satisfied by having issuance and/or ownership
of such shares recorded on the books and records of the
Company (or,
as applicable, its transfer agent or stock plan
administrator).

17.9                Governing
Law. The Plan and all rights hereunder shall be subject to
and interpreted in accordance with the laws of the State of
Delaware, without reference to the principles of conflicts of laws,
and to applicable Federal securities laws.

 

18.          Effective
Date, Amendment and Termination

 

18.1                Effective
Date. The effective date of the Plan shall be the date on
which the Plan is approved by the requisite percentage of the
holders of the Common Stock of the Company; provided, however, that
Awards granted under the Plan subsequent to the approval of the
Plan by the Board shall be valid if such stockholder approval
occurs within one year of the date on which such Board approval
occurs.

18.2                Amendment;
Termination. The Board may suspend or terminate the Plan (or
any portion thereof) at any time and may amend the Plan at any time
and from time to time in such respects as the Board may deem
advisable or in the best interests of the Company or any
Subsidiary; provided, however, that (a) no such amendment,
suspension or termination shall materially and adversely affect the
rights of any Participant under any outstanding Awards, without the
consent of such Participant, (b) to the extent necessary and
desirable to comply with any applicable law, regulation, or stock
exchange rule, the Company shall obtain stockholder approval of any
Plan amendment in such a manner and to such a degree as required,
and (c) stockholder approval is required for any amendment to
the Plan that (i) increases the number of shares of Common
Stock available for issuance under the Plan, or (ii) changes
the persons or class of persons eligible to receive Awards. The
Plan will continue in effect until terminated in accordance with
this Section 18.2; provided,
however, that no Award will be granted hereunder on or after
the 10th anniversary of the date of the Plan’s initial
adoption by the Board; but
provided further, that Awards granted prior to such 10th
anniversary may extend beyond that date.

 

INITIAL
BOARD APPROVAL: 01/08/2016

INITIAL
STOCKHOLDER APPROVAL: 02/04/2016

 

26

 

EXHIBIT
A

PERFORMANCE
MEASURES

Section
162(m) Awards shall be based on the attainment of objective
performance goals that are established by the Committee and relate
to one or more Performance Measures, in each case on specified date
or over any period, up to 10 years, as determined by the
Committee.

“Performance
Measures” means the following business criteria (or any
combination thereof) with respect to one or more of the Company,
any Subsidiary or any division or operating unit
thereof:

● pre-tax
income,

● after-tax
income,

● net income (meaning
net income as reflected in the Company’s financial reports
for the applicable period, on an aggregate, diluted and/or per
share basis, or economic net income),

● operating income or
profit,

● cash flow, free
cash flow, cash flow return on investment (discounted or
otherwise), net cash provided by operations, or cash flow in excess
of cost of capital,

● earnings per share
(basic or diluted),

● return on
equity,

● returns on sales or
revenues,

● return on invested
capital or assets (gross or net),

● cash, funds or
earnings available for distribution,

● appreciation in the
fair market value of the Common Stock,

● operating
expenses,

● implementation or
completion of critical projects or processes,

● return on
investment,

● total return to
stockholders (meaning the aggregate Common Stock price appreciation
and dividends paid (assuming full reinvestment of dividends) during
the applicable period),

● net earnings
growth,

 

27

 

● return measures
(including but not limited to return on assets, capital, equity, or
sales),

● increase in
revenues,

● the Company’s
published ranking against its peer group of pharmaceutical
companies based on total stockholder return,

● net
earnings,

● changes (or the
absence of changes) in the per share price of the Company’s
Common Stock,

● preclinical,
clinical or regulatory milestones,

● earnings before or
after any one or more of the following items: interest, taxes,
depreciation or amortization, as reflected in the Company’s
financial reports for the applicable period,

● total revenue
growth (meaning the increase in total revenues after the date of
grant of an award and during the applicable period, as reflected in
the Company’s financial reports for the applicable
period),

● economic value
created,

● operating margin or
profit margin,

● share price or
total shareholder return,

● cost targets,
reductions and savings, productivity and efficiencies,

● strategic business
criteria, consisting of one or more objectives based on meeting
objectively determinable criteria: specified market penetration,
geographic business expansion, investor satisfaction, employee
satisfaction, human resources management, supervision of
litigation, information technology, and goals relating to
acquisitions, divestitures, joint ventures and similar
transactions, and budget comparisons,

● objectively
determinable personal or professional objectives, including any of
the following performance goals: the implementation of policies and
plans, the negotiation of transactions, the development of long
term business goals, formation of joint ventures, research or
development collaborations, and the completion of other corporate
transactions, and

● any combination of,
or a specified increase or improvement in, any of the
foregoing.

 

28

 

Where
applicable, the Performance Measures may be expressed in terms of
attaining a specified level of the particular criteria or the
attainment of a percentage increase or decrease in the particular
criteria, and may be applied to one or more of the Company, a
Subsidiary or affiliate, or a division or strategic business unit
of the Company, or may be applied to the performance of the Company
relative to a market index, a group of other companies or a
combination thereof, all as determined by the
Committee.

The
Performance Measures may include a threshold level of performance
below which no payment shall be made (or no vesting shall occur),
levels of performance at which specified payments shall be made (or
specified vesting shall occur), and a maximum level of performance
above which no additional payment shall be made (or at which full
vesting shall occur).

Except
as otherwise expressly provided, all financial terms are used as
defined under Generally Accepted Accounting Principles
(“GAAP”) and all determinations shall be made in
accordance with GAAP, as applied by the Company in the preparation
of its periodic reports to stockholders.

To the
extent permitted by Section 162(m) of the Code, unless the
Committee provides otherwise at the time of establishing the
performance goals, for each fiscal year of the Company, the
Committee shall have the authority to make equitable adjustments to
the Performance Measures in recognition of unusual or non-recurring
events affecting the Company or any Subsidiary or affiliate or the
financial statements of the Company or any Subsidiary or affiliate
and may provide for objectively determinable adjustments, as
determined in accordance with GAAP, to any of the Performance
Measures described above for one or more of the items of gain,
loss, profit or expense: (A) determined to be extraordinary or
unusual in nature or infrequent in occurrence, (B) related to the
disposal of a segment of a business, (C) related to a change in
accounting principle under GAAP or a change in applicable laws or
regulations, (D) related to discontinued operations that do not
qualify as a segment of a business under GAAP, and (E) attributable
to the business operations of any entity acquired by the Company
during the fiscal year.

 

29Blueprint

 

 Exhibit 10.5

INCENTIVE
STOCK OPTION GRANT AGREEMENT

ADGERO BIOPHARMACEUTICALS HOLDINGS, INC.

 

This
Stock Option Grant Agreement (the “Grant Agreement”) is made
and entered into effective on the Date of Grant set forth in
Exhibit A (the
“Date of
Grant”) by and between Adgero Biopharmaceuticals
Holdings, Inc., a Delaware corporation (the “Company”), and the
individual named in Exhibit A hereto (the
“Optionee”).

 

WHEREAS, the
Company desires to provide the Optionee an incentive to participate
in the success and growth of the Company through the opportunity to
earn a proprietary interest in the Company; and

 

WHEREAS, to give
effect to the foregoing intention, the Company desires to grant the
Optionee an option pursuant to the Adgero Biopharmaceuticals
Holdings, Inc. 2016 Equity Incentive Plan (the “Plan”) to acquire the
Company’s common stock, par value $.0001 per share
(the “Common
Stock”);

 

NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for good and valuable consideration, the parties hereto
agree as follows:

 

1.           
Grant. The Company
hereby grants the Optionee an Incentive Stock Option (the
“Option”) to purchase up
to the number of shares of Common Stock (the “Shares”) set forth in
Exhibit A hereto at
the exercise price per Share (the “Exercise Price”) set
forth in Exhibit A,
and on the vesting schedule set forth in Exhibit A, subject to the terms
and conditions set forth herein and the provisions of the Plan, the
terms of which are incorporated herein by reference. Capitalized
terms used but not otherwise defined in this Grant Agreement shall
have the meanings as set forth in the Plan.

 

This
Option is intended to qualify as an Incentive Stock Option
(“ISO”)
under Section 422 of the Code. However, notwithstanding such
designation, if the Optionee becomes
eligible in any given year to exercise ISOs for Shares having a
Fair Market Value in excess of $100,000, those options representing
the excess shall be treated as Non-Qualified Stock Options. In the
previous sentence, “ISOs” include ISOs granted under
any plan of the Company or any parent or any Subsidiary of the
Company. For the purpose of
deciding which options apply to Shares that “exceed”
the $100,000 limit, ISOs shall be taken into account in the same
order as granted. The Fair Market Value of the Shares shall
be determined as of the time the Option with respect to such Shares
is granted. The Optionee hereby acknowledges that there is no
assurance that the Option will, in fact, be treated as an Incentive
Stock Option under Section 422 of the Code.

 

2.           Exercise
Period Following Termination of Service. This Option shall
terminate and be canceled to the extent not exercised within three
(3) months following termination of the Optionee’s employment
or other Service with the Company and all Subsidiaries; provided,
except that if such termination is due to the Optionee’s
death or permanent and total disability within the meaning of
Section 22(e)(3) of the Code, this Option shall terminate and be
cancelled one (1) year from the date of termination of Service with
the Company and all Subsidiaries. Notwithstanding the foregoing, in
the event that the Optionee’s employment or other Service
with the Company and its Subsidiaries is terminated for Cause, then
the Option shall immediately terminate on the date of such
termination of Service and shall not be exercisable for any period
following such date. In no event, however, shall this Option be
exercised later than the Expiration Date set forth in Exhibit A and in no event shall
this Option be exercised for more Shares than the Shares which
otherwise have become exercisable as of the date of
termination.

 

1

 

 

3.           Method
of Exercise. This Option is exercisable by delivery to the
Company of an exercise notice (the “Exercise Notice”) in a
form satisfactory to the Committee or by such other form or means
as the Committee may permit or require. Any Exercise Notice shall
state or provide the number of Shares with respect to which the
Option is being exercised (the “Exercised Shares”), and
include such other representations and agreements as may be
required by the Company pursuant to the provisions of the Plan. The
Exercise Notice shall be accompanied by payment of the aggregate
Exercise Price for the Exercised Shares in (i) cash; (ii) check; or
(iii) such other manner as is acceptable to the Committee, provided
that such form of consideration is permitted by the Plan and by
applicable law. Upon exercise of the Option by the Optionee and
prior to the delivery of such Exercised Shares, the Company shall
have the right to require the Optionee to satisfy applicable
Federal and state tax income tax withholding requirements and the
Optionee’s share of applicable employment withholding taxes
in a method satisfactory to the Company. Notwithstanding the
foregoing, no Exercised Shares shall be issued unless such exercise
and issuance complies with the requirements relating to the
administration of stock option plans and other applicable equity
plans under U.S. state corporate laws, U.S. federal and state
securities laws, the Code, any stock exchange or quotation system
on which the Common Stock is listed or quoted, and the applicable
laws of any foreign country or jurisdiction where stock grants or
other applicable equity grants are made under the Plan; assuming
such compliance, for income tax purposes the Exercised Shares shall
be considered transferred to the Optionee on the date the Option is
exercised with respect to such Shares.

 

4.           Covenants
Agreement. This Option shall be subject to forfeiture at the
election of the Company in the event that the Optionee breaches any
agreement between the Optionee and the Company with respect to
noncompetition, nonsolicitation, assignment of inventions and
contributions and/or nondisclosure obligations of the
Optionee.

 

5.           Taxes.
By executing this Grant Agreement, Optionee acknowledges and agrees
that Optionee is solely responsible for the satisfaction of any
applicable taxes that may be imposed on Optionee that arise as a
result of the grant, vesting or exercise of the Option, including
without limitation any taxes arising under Section 409A of the Code
(regarding deferred compensation) or Section 4999 of the Code
(regarding golden parachute excise taxes), and that neither the
Company nor the Committee shall have any obligation whatsoever to
pay such taxes or otherwise indemnify or hold Optionee harmless
from any or all of such taxes.

 

6.           Non-Transferability
of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of the Optionee only by
the Optionee. The terms of the Plan and this Grant Agreement shall
be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.

 

2

 

 

7.           Securities
Matters. All Shares and Exercised Shares shall be subject to
the restrictions on sale, encumbrance and other disposition
provided by Federal or state law. The Company shall not be
obligated to sell or issue any Shares or Exercised Shares pursuant
to this Grant Agreement unless, on the date of sale and issuance
thereof, such Shares are either registered under the Securities Act
of 1933, as amended (the “Securities Act”), and all
applicable state securities laws, or are exempt from registration
thereunder. Regardless of whether the offering and sale of Shares
under the Plan have been registered under the Securities Act, or
have been registered or qualified under the securities laws of any
state, the Company at its discretion may impose restrictions upon
the sale, pledge or other transfer of such Shares (including the
placement of appropriate legends on stock certificates or the
imposition of stop-transfer instructions) if, in the judgment of
the Company, such restrictions are necessary in order to achieve
compliance with the Securities Act or the securities laws of any
state or any other law.

 

8.           Investment
Purpose. The Optionee represents and warrants that unless
the Shares are registered under the Securities Act, any and all
Shares acquired by the Optionee under this Grant Agreement will be
acquired for investment for the Optionee’s own account and
not with a view to, for resale in connection with, or with an
intent of participating directly or indirectly in, any distribution
of such Shares within the meaning of the Securities Act. The
Optionee agrees not to sell, transfer or otherwise dispose of such
Shares unless they are either (1) registered under the Securties
Act and all applicable state securities laws, or (2) exempt from
such registration in the opinion of Company counsel.

 

9.           Lock-Up
Agreement. The Optionee hereby agrees that in the event that
the Optionee exercises this Option during a period in which any
directors or officers of the Company have agreed with one or more
underwriters not to sell securities of the Company, then, as a
condition to such exercise, the Optionee shall enter into an
agreement, in form and substance satisfactory to the Company,
pursuant to which the Optionee shall agree to restrictions on
transferability of the Shares comparable to the restrictions agreed
upon by such directors or officers of the Company.

 

10.           Other
Plans. No
amounts of income received by the Optionee pursuant to this Grant
Agreement shall be considered compensation for purposes of any
pension or retirement plan, insurance plan or any other employee
benefit plan of the Company or its subsidiaries, unless otherwise
expressly provided in such plan.

 

11.           No
Guarantee of Continued Service. The Optionee acknowledges
and agrees that the right to exercise the Option pursuant to the
exercise schedule hereof is earned only by continuing employment or
Service with the Company and/or its Subsidiaries (and not through
the act of being hired, being granted an option or purchasing
shares hereunder). The Optionee further acknowledges and agrees
that (i) this Grant Agreement, the transactions contemplated
hereunder and the exercise schedule set forth herein do not
constitute an express or implied promise of continued employment or
Service for the exercise period or for any other period, and shall
not interfere with the Optionee’s right or the right of the
Company or its Subsidiaries to terminate the employment or Service
relationship at any time, with or without cause, subject to the
terms of any written employment agreement that the Optionee may
have entered into with the Company or any of its Subsidiaries; and
(ii) the Company would not have granted this Option to the Optionee
but for these acknowledgements and agreements.

 

3

 

 

12.
Entire Agreement;
Governing Law. The Plan is incorporated herein by reference.
The Plan and this Grant Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements
of the Company and the Optionee with respect to the subject matter
hereof, and may not be modified adversely to the Optionee’s
interest except by means of a writing signed by the Company and the
Optionee. In the event of any conflict between this Grant Agreement
and the Plan, the Plan shall be controlling, except as otherwise
specifically provided in the Plan. This Grant Agreement shall be
construed under the laws of the State of Delaware, without regard
to conflict of laws principles.

 

13.
Opportunity for
Review. Optionee and the Company agree that this Option is
granted under and governed by the terms and conditions of the Plan
and this Grant Agreement. The Optionee has reviewed the Plan and
this Grant Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Grant
Agreement and fully understands all provisions of the Plan and this
Grant Agreement. The Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the
Committee upon any questions relating to the Plan and this Grant
Agreement. The Optionee further agrees to notify the Company upon
any change in the residence address indicated herein.

 

14.
Section 409A. This
Option is intended to be excepted from coverage under Section 409A
and shall be administered, interpreted and construed accordingly.
The Company may, in its sole discretion and without the
Optionee’s consent, modify or amend the terms of this
Grant Agreement,
impose conditions on the timing and effectiveness of the exercise
of the Option by Optionee, or take any other action it deems
necessary or advisable, to cause the Option to be excepted from
Section 409A (or to comply therewith to the extent the Company
determines it is not excepted).

 

 

4

 

IN
WITNESS WHEREOF, the parties hereto have executed this Grant
Agreement as of the date set forth in Exhibit A.

 

ADGERO
BIOPHARMACEUTICALS HOLDINGS, INC.

 

 

By:________________________________

      Name:

      Title:

 

 

 

OPTIONEE

 

 

___________________________________

Name:

 

 

5

 

 

EXHIBIT A

 

INCENTIVE STOCK OPTION GRANT AGREEMENT

 

ADGERO BIOPHARMACEUTICALS HOLDINGS, INC.

 

 

(a).           Optionee’s
Name:                                                                                                           

 

 

(b).           Date
of
Grant:                                                                           

 

 

(c).           Number
of Shares Subject to the Option: 

 

 

(d).           Exercise
Price: $______ per
Share

 

 

(e).           Expiration
Date:                                                                           

 

 

(f).           Vesting
Schedule:

 

 

_______
(Initials)

Optionee

 

 

_______
(Initials)

Company
Signatory

 

 

 

6

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