Document:

Executive Employment Agreement Michael F. Zendan II

 Exhibit 10.32 
  

			
	  
 

  
 3318
Lakemont Blvd.
  
 Fort Mill, SC 29708

 
 803 396.3000
  
 Tel 800 331.3340
  
 www.muzak.com
	  	 MUZAK EMPLOYEE AGREEMENT
  
 Muzak LLC, a Delaware limited liability company, hereinafter referred to as “Company”, and Michael F. Zendan II, hereinafter referred to as
“Employee”, hereby enter into the following Agreement:
  
 1.
EMPLOYMENT
  
 Effective March 30, 2007 (the “Effective
Date”), the Company hereby agrees to continue to employ Employee in the position of Vice President and General Counsel, and Employee hereby accepts continued employment upon the terms and conditions contained herein. Any previous Employment
Agreement(s) between the Company and Employee are superseded by this Agreement.
  
 2.
COMPENSATION
  
 During the term of employment, Employee shall be
entitled to continue to receive that annual base salary being paid to Employee as of March 30, 2007 (as in effect from time to time, the “Base Salary”). Effective December 1, 2007 and each anniversary of such date, the Base
Salary shall increase by 5% over the preceding year. The Base Salary will be payable in regular installments in accordance with the general payroll practices of the Company.
  
 In addition to the Base Salary, the CEO of the Company in his sole discretion
may award a bonus (as in effect from time to time, the “Bonus”) to Employee following the end of each fiscal year during the Employment Period as the CEO deems appropriate based upon the following considerations: (i) up to 30% of the
Base Salary as then in effect in consideration of the Company’s achievement of budgeted goals and (ii) up to 10% of the Base Salary as then in effect in consideration of Employee’s achievement of personal goals; all such goals shall
be established by the CEO in advance of each fiscal year. The Bonus, if awarded, for a fiscal year shall be paid in a single payment within thirty (30) days after the audited financial statements for such fiscal year have been reviewed by the
Board of Directors. For any fiscal year which Executive is not employed by the Company at the end of the fiscal year, Employee shall not be entitled to receive any Bonus.
  
 Employee will be entitled to also participate in any health insurance plans,
vacation plans, retirement savings plans and other similar benefits which the Company makes available generally to other Company executives. The Company will further reimburse Employee for all reasonable expenses incurred by him in the course of
performing his duties and which are consistent with the Company’s policies in effect from time to time with respect to professional licenses, travel, entertainment and other business expenses, subject to the Company’s requirements with
respect to reporting and documentation of such expenses.
  
 3. TERMINATION AT WILL AND
SEVERANCE
  
 Employee’s employment may be terminated at will
(for any reason or no reason at all). During the term hereof, Employee agrees to comply with all of the Company’s policies and procedures and acknowledges that policies and procedures may periodically change.
  

  

 1 

			
	  
 

  
 3318
Lakemont Blvd.
  
 Fort Mill, SC 29708

 
 803 396.3000
  
 Tel 800 331.3340
  
 www.muzak.com
	  	 If the Company terminates Employee’s employment for any reason other than cause (cause is defined as (i) a material
breach by Employee of any material provision of this Agreement which breach has not been cured within ten (10) days after written notice to Employee, (ii) violation in any material respect of a written directive of the Board of Directors
or CEO, or (iii) violation of a material Company policy), the Company shall pay the Employee one (1) year of Base Salary then in effect. Such compensation will be payable in regular and equal installments in accordance with the general
payroll practices of the Company.
  
 If the Company terminates
Employee’s employment for any reason other than cause, Employee and his family will further be eligible to receive health and dental coverage for such Employee and his family and the Company shall pay all COBRA premiums associated with such
coverages for the one (1) year period following such Employee’s termination.
  
 4. NO OTHER SIMILAR EMPLOYMENT
  
 The Employee shall
not, during the term of his employment, be interested directly or indirectly in any manner, as a partner, officer, director, significant stockholder (i.e. greater than 5% interest), advisor, employee or in any capacity, in any other business similar
to the Company’s business; the Company’s business includes, but is not limited to, the furnishing of products and services involving background and foreground music, audio messaging, music videos, commercial television, digital signage,
and drive-thru systems to commercial and industrial establishments. Notwithstanding the foregoing, the Employee may engage in investment activities in related businesses, but may not be an active participant in such businesses.
  
 5. NO OTHER EMPLOYMENT AGREEMENTS
  
 Employee warrants that he is not a party to any employment or like agreement or
restrictive contract or agreement which limits the scope of his employment as described in this Agreement. Employee agrees to hold the Company harmless from any and all suits and claims arising out of any such employment agreement or restrictive
contracts or agreements.
  
 6. NONDISCLOSURE COVENANT
  
 The Employee shall not, at any time or in any manner, either directly or
indirectly, divulge, disclose, or communicate to any person, firm or corporation in any manner whatsoever trade secrets of the Company including but not limited to any information relating to the manner of Company’s operations, its plans,
clients, processes, financials, forecasts, cost and pricing strategies, or other data. The parties hereby stipulate as among them, all such matters relating to the Company are important, material, confidential and gravely affect the effective and
successful conduct of the business of the Company and the Company’s goodwill, and that any breach of the terms of this Section 6 shall be a material breach of this Agreement. Employee also agrees that he shall, upon termination of his
employment for any reason whatsoever, deliver to his supervisor any and all tangible embodiments of such trade secrets including lists of names or other client or account data, contracts, proposals, studies, records, engineering or economic data,
forms, notes and any other articles or papers which have come into his possession by reason of his employment
  

  

 2 

			
	  
 

  
 3318
Lakemont Blvd.
  
 Fort Mill, SC 29708

 
 803 396.3000
  
 Tel 800 331.3340
  
 www.muzak.com
	  	 or which he holds for the Company, irrespective of whether or not any of said items were prepared by him, and he shall not retain memoranda or
copies of any such items. Employee acknowledges that in addition to the nondisclosure provisions contained in this Agreement, the Company’s trade secrets and confidential information also are protected from use or disclosure by the Delaware
Uniform Trade Secrets Act, DEL. CODE ANN. tit. 6, § 2001et seq. (2005).
  
 7. NON-SOLICITATION COVENANT
  
 In recognition of the
uniqueness of the services which the Company provides, as well as the confidential information and trade secrets which will be disclosed to the Employee during the course of his employment with the Company, and in consideration of his employment by
the Company, the Employee hereby agrees that he will not directly or indirectly during a period of two (2) years from the last date on which the Employee is employed by the Company (i) solicit or seek to solicit or induce or attempt to
induce any employee or full-time independent contractor of the Company to leave the employ of, or contracting relationship with, the Company, (ii) solicit or seek to solicit or induce or attempt to induce any client, supplier or other business
relation of the Company to cease doing business with the Company, or (iii) solicit or seek to solicit or induce or attempt to induce any client, supplier or other business relation of the Company to enter into a commercial relationship to the
detriment of the Company.
  
 8. REMEDIES
  
 Employee acknowledges that the restrictions contained in Sections 6 and 7 of this
Agreement, in view of the nature of the business in which the Company is engaged and the Employee’s role in that business, are reasonable and necessary to protect the legitimate interests of the Company. Employee understands and agrees that his
violation will cause irreparable injury within a short period of time, and that the Company or its affiliates shall be entitled to seek and obtain preliminary, permanent and other injunctive relief against any such actual or threatened violations.
Employee further agrees that the Company shall be entitled to recover damages including an equitable accounting of all earnings, profits, and other benefits arising from any such violations by Employee. Such relief shall be in addition to, and in no
way in limitation of, any and all other remedies the Company shall have in law or in equity for the enforcement of such covenants and provisions. Employee shall pay any and all reasonable attorneys’ fees and associated costs incurred by the
Company in enforcing this Agreement and/or seeking any relief or damages.
  
 9. EFFECT
OF WAIVER
  
 The waiver by the Company of a breach of any
provision of this Agreement by Employee shall not operate as a waiver of any subsequent or other breach by Employee.
  
 10. INVALID PROVISIONS
  
 In the event any
provision(s) of this Agreement are held invalid or unenforceable, such holding shall not affect the validity or enforceability of the remaining provisions of this Agreement, and such remaining provisions shall nonetheless be deemed in full force and
effect.

  

 3 

			
	  
 

  
 3318
Lakemont Blvd.
  
 Fort Mill, SC 29708

 
 803 396.3000
  
 Tel 800 331.3340
  
 www.muzak.com
	  	 11. SUCCESSORS AND ASSIGNS
  
 This Agreement is fully assignable by the Company and will inure to the benefit of and be enforceable by the Company’s successors and
assigns.
  
 12. CHOICE OF LAW AND FORUM
  
 The laws of the state of Delaware (without giving effect to its conflict of law
principles) govern all matters arising out of or relating to this Agreement, including without limitation, its validity, interpretation, construction, performance, and enforcement.
  
 Any party bringing a legal action or proceeding against any other party arising
out of or relating to this Agreement may bring the legal action or proceeding in the United States District Court for the District of Delaware or in any Court of Chancery of the State of Delaware.
  
 Each party to this Agreement waives, to the fullest extent permitted by law,
(i) any objection which it may now or later have to the laying of venue of any legal action or proceeding arising out of or relating to this Agreement brought in any Court of Chancery of the State of Delaware or the United States District Court
for the District of Delaware, and (ii) any claim that any action or proceeding brought in any such court has been brought in an inconvenient forum.
  
 Each party to this Agreement submits to the nonexclusive jurisdiction of (i) the United States District Court for the District of Delaware and
its appellate courts, and (ii) any court of Chancery of the State of Delaware and its appellate courts, for the purpose of all legal actions and proceedings arising out of or relating to this Agreement.
  
 Employee irrevocably consents to the service of process by mailing a copy of the
process to Employee via certified mail to the last known address provided by Employee in writing to the Company’s Team Member Services Department.
  
 13. ENTIRE AGREEMENT
  
 This Agreement embodies the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.
  
 EMPLOYEE ATTESTS THAT HE HAS BEEN AFFORDED THE OPPORTUNITY TO CONSIDER THIS
AGREEMENT, HAS CAREFULLY READ THIS ENTIRE AGREEMENT, AND HAS BEEN ADVISED BY THE COMPANY TO DISCUSS THIS AGREEMENT WITH AN ATTORNEY OF HIS CHOICE. EMPLOYEE AFFIRMS THAT HE IS FULLY COMPETENT TO EXECUTE THIS AGREEMENT AND THAT HE DOES SO VOLUNTARILY.
EMPLOYEE FURTHER ATTESTS THAT HE POSSESSES SUFFICIENT EDUCATION AND/OR EXPERIENCE TO FULLY UNDERSTAND THE EXTENT AND IMPACT OF THIS AGREEMENT’S PROVISIONS.

  

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		 	 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

	 

  
 3318 Lakemont Blvd.
  
 Fort Mill, SC 29708
  

803 396.3000
  
 Tel 800 331.3340
  
 www.muzak.com
	 	
	 		 	  
  
	  	
	 		 	Employee	  	
	 		 	  
 Muzak LLC
	  	
	 		 	  
  
	  	
	 		 	 By
	  	
	 		 	  
  
	  	
	 		 	 Title
	  	
	 	 This Agreement shall be duplicated, one copy to be retained by Employee, one copy to be retained in the Employee’s personnel
file.

	 	Rev. 03/2007

  

 5Novacea, Inc. 2006 Equity Incentive Plan

 Exhibit 10.2 
 NOVACEA, INC. 
 2006 INCENTIVE AWARD PLAN 
 (Amended and Restated) 
 ARTICLE 1.

 PURPOSE 
 The
purpose of the Novacea, Inc. 2006 Incentive Award Plan (the “Plan”) is to promote the success and enhance the value of Novacea, Inc. (the “Company”) by linking the personal interests of the members of the Board,
Employees, and Consultants to those of Company stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company stockholders. The Plan is further intended to provide flexibility to
the Company in its ability to motivate, attract, and retain the services of members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely
dependent. 
 ARTICLE 2. 
 DEFINITIONS AND CONSTRUCTION 
 Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates. 
 2.1
“Award” means an Option, a Restricted Stock award, a Stock Appreciation Right award, a Performance Share award, a Performance Stock Unit award, a Dividend Equivalents award, a Stock Payment award, a Deferred Stock award, a
Restricted Stock Unit award, a Performance Bonus Award, or a Performance-Based Award granted to a Participant pursuant to the Plan. 
 2.2
“Award Agreement” means any written agreement, contract, or other instrument or document evidencing an Award, including through electronic medium. 
 2.3 “Board” means the Board of Directors of the Company. 
 2.4 “Cause”
means, unless otherwise defined in any applicable Award Agreement, employment, severance or other applicable agreement with the Participant, at any time after the happening of one or more of the following events, in each case as determined in good
faith by the Board: 
 (a) The Participant’s gross negligence or willful misconduct in the performance of his or her
duties to the Company; 
 (b) The Participant’s repeated or unjustified absence from the Company; 

 (c) The Participant’s commission of any act of fraud with respect to the Company;

 (d) The Participant’s conviction of or plea of guilty or nolo contendere to felony criminal conduct or a crime
involving moral turpitude; or 
 (e) The Participant’s violation of any noncompetition or confidentiality agreement that
the Participant has entered into with the Company. 
 2.5 “Change in Control” means and includes each of the following:

 (a) A transaction or series of transactions (other than an offering of Stock to the general public through a registration
statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any
of its subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the
Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities
outstanding immediately after such acquisition; or 
 (b) During any period of two consecutive years, individuals who, at the
beginning of such period, constitute the Board together with any new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 2.5(a) or
Section 2.5(b)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the
two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; or 
 (c) The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business
combination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case
other than a transaction: 
 (i) Which results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or
indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined
voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and 
  

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 (ii) After which no person or group beneficially owns voting securities representing 50%
or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this Section 2.5(c)(ii) as beneficially owning 50% or more of combined voting power of the
Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction; or 
 (d) The Company’s stockholders approve a liquidation or dissolution of the Company. 
 The Committee shall have full and final authority, which
shall be exercised in its discretion, to determine conclusively whether a Change in Control of the Company has occurred pursuant to the above definition, and the date of the occurrence of such Change in Control and any incidental matters relating
thereto. 
 2.6 “Code” means the Internal Revenue Code of 1986, as amended. 
 2.7 “Committee” means the committee of the Board described in Article 13. 
 2.8 “Common Stock” means the common stock of the Company, par value $0.001 per share. 
 2.9 “Constructive Termination” means, unless otherwise defined in any applicable Award Agreement, employment, severance or other
applicable agreement with the Participant, the Participant’s voluntary resignation following (i) any reduction in the Participant’s level of base salary, or (ii) a relocation of the Participant’s principal place of
employment by more than fifty (50) miles (other than reasonable business travel required as part of the job duties associated with the Participant’s position), provided, and only in the event that, such change, reduction or relocation is
effected by the Company without cause and without the Participant’s consent. 
 2.10 “Consultant” means any consultant
or adviser if: (a) the consultant or adviser renders bona fide services to the Company or any Subsidiary; (b) the services rendered by the consultant or adviser are not in connection with the offer or sale of securities in a
capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities; and (c) the consultant or adviser is a natural person. 
 2.11 “Covered Employee” means an Employee who is, or could be, a “covered employee” within the meaning of Section 162(m)
of the Code. 
 2.12 “Deferred Stock” means a right to receive a specified number of shares of Stock during specified time
periods pursuant to Section 8.5. 
 2.13 “Disability” means that the Participant qualifies to receive long-term
disability payments under the Company’s long-term disability insurance program, as it may be amended from time to time. 
 2.14
“Dividend Equivalents” means a right granted to a Participant pursuant to Section 8.3 to receive the equivalent value (in cash or Stock) of dividends paid on Stock. 
  

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 2.15 “Effective Date” shall have the meaning set forth in Section 14.1. 

2.16 “Eligible Individual” means any person who is an Employee, a Consultant or an Independent Director, as determined by the
Committee. 
 2.17 “Employee” means any officer or other employee (as defined in accordance with Section 3401(c) of the
Code) of the Company or any Subsidiary. 
 2.18 “Equity Restructuring” means a nonreciprocal transaction between the Company
and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the shares of Stock (or other securities of the Company) or the share price of Stock
(or other securities) and causes a change in the per share value of the Stock underlying outstanding Awards. 
 2.19 “Exchange
Act” means the Securities Exchange Act of 1934, as amended. 
 2.20 “Fair Market Value” means, as of any date, the
value of Common Stock determined as follows: 
 (a) If the Stock is listed on any established stock exchange or a national
market system, its Fair Market Value shall be the closing sales price for the Stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for such date, or if no bids or sales were reported for such date, then the
closing sales price (or the closing bid, if no sales were reported) on the trading date immediately prior to such date during which a bid or sale occurred, in each case, as reported in The Wall Street Journal or such other source as the
Committee deems reliable; 
 (b) If the Stock is regularly quoted by a recognized securities dealer but selling prices are
not reported, its Fair Market Value shall be the mean of the closing bid and asked prices for the Stock on such date, or if no closing bid and asked prices were reported for such date, the date immediately prior to such date during which closing bid
and asked prices were quoted for the Stock, in each case, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or 
 (c) In the absence of an established market for the Stock, the Fair Market Value thereof shall be determined in good faith by the
Committee. 
 2.21 “Incentive Stock Option” means an Option that is intended to meet the requirements of Section 422 of
the Code or any successor provision thereto. 
 2.22 “Independent Director” means a member of the Board who is not an
Employee of the Company. 
 2.23 “Non-Employee Director” means a member of the Board who qualifies as a “Non-Employee
Director” as defined in Rule 16b-3(b)(3) under the Exchange Act, or any successor rule. 
  

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 2.24 “Non-Qualified Stock Option” means an Option that is not intended to be an
Incentive Stock Option. 
 2.25 “Option” means a right granted to a Participant pursuant to Article 5 of the Plan to
purchase a specified number of shares of Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option. 
 2.26 “Participant” means any Eligible Individual who, as a member of the Board, Consultant or Employee, has been granted an Award
pursuant to the Plan. 
 2.27 “Performance-Based Award” means an Award granted to selected Covered Employees pursuant to
Section 8.7, but which is subject to the terms and conditions set forth in Article 9. 
 2.28 “Performance Bonus Award”
has the meaning set forth in Section 8.7. 
 2.29 “Performance Criteria” means the criteria that the Committee selects
for purposes of establishing the Performance Goal or Performance Goals for a Participant for a Performance Period. The Performance Criteria that will be used to establish Performance Goals are limited to the following: net earnings (either before or
after interest, taxes, depreciation and amortization), economic value-added, sales or revenue, net income (either before or after taxes), operating earnings, cash flow (including, but not limited to, operating cash flow and free cash flow), cash
flow return on capital, return on net assets, return on stockholders’ equity, return on assets, return on capital, stockholder returns, return on sales, gross or net profit margin, productivity, expense, margins, operating efficiency, customer
satisfaction, working capital, earnings per share, price per share of Stock, and market share, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group. The Committee
shall define in an objective fashion the manner of calculating the Performance Criteria it selects to use for such Performance Period for such Participant. 
 2.30 “Performance Goals” means, for a Performance Period, the goals established in writing by the Committee for the Performance Period based upon the Performance Criteria. Depending on the Performance
Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of a division, business unit, or an individual. The Committee, in its discretion, may, within the
time prescribed by Section 162(m) of the Code, adjust or modify the calculation of Performance Goals for such Performance Period in order to prevent the dilution or enlargement of the rights of Participants (a) in the event of, or in
anticipation of, any unusual or extraordinary corporate item, transaction, event, or development, or (b) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of
the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions. 
 2.31 “Performance Period” means the one or more periods of time, which may be of varying and overlapping durations, as the Committee may select, over which the attainment of one or more Performance Goals will be measured
for the purpose of determining a Participant’s right to, and the payment of, a Performance-Based Award. 
  

 5 

 2.32 “Performance Share” means a right granted to a Participant pursuant to
Section 8.1, to receive Stock, the payment of which is contingent upon achieving certain Performance Goals or other performance-based targets established by the Committee. 
 2.33 “Performance Stock Unit” means a right granted to a Participant pursuant to Section 8.2, to receive Stock, the payment of
which is contingent upon achieving certain Performance Goals or other performance-based targets established by the Committee. 
 2.34
“Plan” means this Novacea, Inc. 2006 Incentive Award Plan, as it may be amended from time to time. 
 2.35 “Prior
Plan” means the Novacea, Inc. 2001 Stock Option Plan in effect immediately prior to the Effective Date, as such plan may be amended from time to time. 
 2.36 “Qualified Performance-Based Compensation” means any compensation that is intended to qualify as “qualified performance-based compensation” as described in Section 162(m)(4)(C) of
the Code. 
 2.37 “Restricted Stock” means Stock awarded to a Participant pursuant to Article 6 that is subject to certain
restrictions and may be subject to risk of forfeiture. 
 2.38 “Restricted Stock Unit” means an Award granted pursuant to
Section 8.6. 
 2.39 “Securities Act” shall mean the Securities Act of 1933, as amended. 
 2.40 “Stock” means the Common Stock, and such other securities of the Company that may be substituted for the Common Stock pursuant to
Article 12. 
 2.41 “Stock Appreciation Right” or “SAR” means a right granted pursuant to Article 7 to
receive a payment equal to the excess of the Fair Market Value of a specified number of shares of Stock on the date the SAR is exercised over the Fair Market Value on the date the SAR was granted as set forth in the applicable Award Agreement.

 2.42 “Stock Payment” means (a) a payment in the form of shares of Stock, or (b) an option or other right to
purchase shares of Stock, as part of any bonus, deferred compensation or other arrangement, made in lieu of all or any portion of the compensation, granted pursuant to Section 8.4. 
 2.43 “Subsidiary” means any “subsidiary corporation” as defined in Section 424(f) of the Code and any applicable
regulations promulgated thereunder or any other entity of which a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company. 
 ARTICLE 3. 
 SHARES SUBJECT TO THE PLAN 
 3.1 Number of Shares. 
  

 6 

 (a) Subject to Article 12 and Section 3.1(b) hereof, the aggregate number of shares
of Stock which may be issued or transferred pursuant to Awards under the Plan shall be the sum of: (i) 2,500,000 shares and (ii) any shares of Stock which as of the Effective Date are available for issuance under the Prior Plan and which
following the Effective Date are not issued under the Prior Plan (including Shares that are subject to stock options outstanding under the Prior Plan that expire, are cancelled or otherwise terminate unexercised, or Shares that otherwise would have
reverted to the share reserve of the Prior Plan following the Effective Date). In addition, subject to Article 11, the aggregate number of shares of Stock available for issuance under the Plan shall automatically increase each year during the
term of the Plan commencing on the first day of the Company’s 2007 fiscal year by a number equal to the lesser of (i) four and one-half percent (4.5%) of the total number of shares of Stock outstanding on a fully diluted basis on the
date of the increase and (ii) 2,000,000 shares of Stock. Notwithstanding the foregoing, the Board may act prior to the first day of any fiscal year to provide that there shall be no increase in the share reserve for such fiscal year or that the
increase in the share reserve for such fiscal year shall be a lesser number of shares of Stock than would otherwise occur pursuant to the preceding sentence. Anything to the contrary herein notwithstanding, the maximum aggregate number of shares of
Stock that may be issued or transferred pursuant to Awards under the Plan during the term of the Plan shall not exceed 25,000,000 shares, subject to Article 11. 
 (b) To the extent that an Award terminates, expires, or lapses for any reason, any shares of Stock subject to the Award shall again be
available for the grant of an Award pursuant to the Plan. Additionally, any shares of Stock tendered or withheld to satisfy the grant or exercise price or tax withholding obligation pursuant to any Award shall again be available for the grant of an
Award pursuant to the Plan. To the extent permitted by applicable law or any exchange rule, shares of Stock issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by the Company or
any Subsidiary shall not be counted against shares of Stock available for grant pursuant to this Plan. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the shares available for
issuance under the Plan. Notwithstanding the provisions of this Section 3.1(b) hereof, no shares of Common Stock may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an incentive
stock option under Section 422 of the Code. 
 3.2 Stock Distributed. Any Stock distributed pursuant to an Award may consist, in
whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market. 
 3.3 Limitation on Number of
Shares Subject to Awards. Notwithstanding any provision in the Plan to the contrary, and subject to Article 12, the maximum number of shares of Stock with respect to one or more Awards that may be granted to any one Participant during any
calendar year (measured from the date of any grant) shall be 2,000,000 shares of Stock. 
  

 7 

 ARTICLE 4. 
 ELIGIBILITY AND PARTICIPATION 
 4.1 Eligibility. Each Eligible Individual shall be eligible to
be granted one or more Awards pursuant to the Plan. 
 4.2 Participation. Subject to the provisions of the Plan, the Committee may,
from time to time, select from among all Eligible Individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award. No Eligible Individual shall have any right to be granted an Award pursuant to this Plan.

 4.3 Non-U.S. Participants. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in countries
other than the United States in which the Company and its Subsidiaries operate or have Eligible Individuals, the Committee, in its sole discretion, shall have the power and authority to: (i) determine which Subsidiaries shall be covered by the
Plan; (ii) determine which Eligible Individuals outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to Eligible Individuals outside the United States to comply with
applicable non-U.S. laws; (iv) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modifications shall be attached to this Plan as
appendices); provided, however, that no such subplans and/or modifications shall increase the share limitations contained in Sections 3.1 and 3.3 of the Plan; and (v) take any action, before or after an Award is made, that it deems
advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate the
Exchange Act, the Code, any securities law or governing statute or any other applicable law. 
 ARTICLE 5. 
 STOCK OPTIONS 
 5.1 General. The Committee is
authorized to grant Options to Eligible Individuals on the following terms and conditions: 
 (a) Exercise Price. The
exercise price per share of Stock subject to an Option shall be determined by the Committee and set forth in the Award Agreement; provided, that, subject to Section 5.2(d), the exercise price for any Option shall not be less than 100% of
the Fair Market Value of a share of Stock on the date of grant. 
 (b) Time and Conditions of Exercise. The Committee
shall determine the time or times at which an Option may be exercised in whole or in part; provided that the term of any Option granted under the Plan shall not exceed ten years. The Committee shall also determine the performance or other
conditions, if any, that must be satisfied before all or part of an Option may be exercised. 
  

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 (c) Payment. The Committee shall determine the methods by which the exercise price
of an Option may be paid, the form of payment, including, without limitation: (i) cash, (ii) shares of Stock held for such period of time as may be required by the Committee in order to avoid adverse accounting consequences and having a
Fair Market Value on the date of delivery equal to the aggregate exercise price of the Option or exercised portion thereof, or (iii) other property acceptable to the Committee (including through the delivery of a notice that the Participant has
placed a market sell order with a broker with respect to shares of Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of
the Option exercise price; provided that payment of such proceeds is then made to the Company upon settlement of such sale). The Committee shall also determine the methods by which shares of Stock shall be delivered or deemed to be delivered
to Participants. Notwithstanding any other provision of the Plan to the contrary, no Participant who is a member of the Board or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be
permitted to pay the exercise price of an Option, or continue any extension of credit with respect to the exercise price of an Option with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange
Act. 
 (d) Evidence of Grant. All Options shall be evidenced by an Award Agreement between the Company and the
Participant. The Award Agreement shall include such additional provisions as may be specified by the Committee. 
 5.2 Incentive Stock
Options. Incentive Stock Options shall be granted only to Employees and the terms of any Incentive Stock Options granted pursuant to the Plan, in addition to the requirements of Section 5.1, must comply with the provisions of this
Section 5.2. 
 (a) Expiration. Subject to Section 5.2(c), an Incentive Stock Option shall expire and may
not be exercised to any extent by anyone after the first to occur of the following events: 
 (i) Ten years from the date it
is granted, unless an earlier time is set in the Award Agreement; 
 (ii) Three months after the Participant’s
termination of employment as an Employee; and 
 (iii) One year after the date of the Participant’s termination of
employment or service on account of Disability or death. Upon the Participant’s Disability or death, any Incentive Stock Options exercisable at the Participant’s Disability or death may be exercised by the Participant’s legal
representative or representatives, by the person or persons entitled to do so pursuant to the Participant’s last will and testament, or, if the Participant fails to make testamentary disposition of such Incentive Stock Option or dies intestate,
by the person or persons entitled to receive the Incentive Stock Option pursuant to the applicable laws of descent and distribution. 
 (b) Dollar Limitation. The aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of Stock with respect to which Incentive Stock Options 

  

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are first exercisable by a Participant in any calendar year may not exceed $100,000 or such other limitation as imposed by Section 422(d) of the Code,
or any successor provision. To the extent that Incentive Stock Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Stock Options. 
 (c) Ten Percent Owners. An Incentive Stock Option shall be granted to any individual who, at the date of grant, owns stock
possessing more than ten percent of the total combined voting power of all classes of Stock of the Company only if such Option is granted at a price that is not less than 110% of Fair Market Value on the date of grant and the Option is exercisable
for no more than five years from the date of grant. 
 (d) Notice of Disposition. The Participant shall give the
Company prompt notice of any disposition of shares of Stock acquired by exercise of an Incentive Stock Option within (i) two years from the date of grant of such Incentive Stock Option or (ii) one year after the transfer of such shares of
Stock to the Participant. 
 (e) Right to Exercise. During a Participant’s lifetime, an Incentive Stock Option
may be exercised only by the Participant. 
 (f) Failure to Meet Requirements. Any Option (or portion thereof)
purported to be an Incentive Stock Option, which, for any reason, fails to meet the requirements of Section 422 of the Code shall be considered a Non-Qualified Stock Option. 
 ARTICLE 6. 
 RESTRICTED STOCK AWARDS 
 6.1 Grant of Restricted Stock. The Committee is authorized to make Awards of Restricted Stock to any Eligible Individual selected by the Committee
in such amounts and subject to such terms and conditions as determined by the Committee. All Awards of Restricted Stock shall be evidenced by an Award Agreement. 
 6.2 Issuance and Restrictions. Restricted Stock shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the
right to vote Restricted Stock or the right to receive dividends on the Restricted Stock). These restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee
determines at the time of the grant of the Award or thereafter. 
 6.3 Forfeiture. Except as otherwise determined by the Committee at
the time of the grant of the Award or thereafter, upon termination of employment or service during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited; provided, however, that
the Committee may (a) provide in any Restricted Stock Award Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and
(b) in other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock. 
  

 10 

 6.4 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan may be
evidenced in such manner as the Committee shall determine. If certificates representing shares of Restricted Stock are registered in the name of the Participant, certificates must bear an appropriate legend referring to the terms, conditions, and
restrictions applicable to such Restricted Stock, and the Company may, at its discretion, retain physical possession of the certificate until such time as all applicable restrictions lapse. 
 ARTICLE 7. 
 STOCK APPRECIATION RIGHTS 
 7.1 Grant of Stock Appreciation Rights. 
 (a) A Stock Appreciation Right may be granted to any Eligible Individual selected by the Committee. A Stock Appreciation Right shall be subject to such terms and conditions not inconsistent with the Plan as the
Committee shall impose and shall be evidenced by an Award Agreement. 
 (b) A Stock Appreciation Right shall entitle the
Participant (or other person entitled to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to receive from
the Company an amount equal to the product of (i) the excess of (A) the Fair Market Value of the Stock on the date the Stock Appreciation Right is exercised over (B) the Fair Market Value of the Stock on the date the Stock
Appreciation Right was granted and (ii) the number of shares of Stock with respect to which the Stock Appreciation Right is exercised, subject to any limitations the Committee may impose. 
 7.2 Payment and Limitations on Exercise. 
 (a) Subject to Sections Error! Reference source not found., payment of the amounts determined under Sections 7.1(b) above shall be in cash, in Stock (based on its Fair Market Value as of the date the Stock
Appreciation Right is exercised) or a combination of both, as determined by the Committee in the Award Agreement. 
 (b) To
the extent any payment under Section 7.1(b) is effected in Stock, it shall be made subject to satisfaction of all provisions of Article 5 above pertaining to Options. 
 ARTICLE 8. 
 OTHER TYPES OF AWARDS 
 8.1 Performance Share Awards. Any Eligible Individual selected by the Committee may be granted one or more Performance Share awards which shall be
denominated in a number of shares of Stock and which may be linked to any one or more of the Performance Criteria or other specific performance criteria determined appropriate by the Committee, in each case on a specified date or dates or over any
period or periods determined by the Committee. In making such determinations, the Committee shall consider (among such other factors as it deems 

  

 11 

 
relevant in light of the specific type of award) the contributions, responsibilities and other compensation of the particular Participant. 
 8.2 Performance Stock Units. Any Eligible Individual selected by the Committee may be granted one or more Performance Stock Unit awards
which shall be denominated in unit equivalent of shares of Stock and/or units of value including dollar value of shares of Stock and which may be linked to any one or more of the Performance Criteria or other specific performance criteria determined
appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee. In making such determinations, the Committee shall consider (among such other factors as it deems relevant in light of
the specific type of award) the contributions, responsibilities and other compensation of the particular Participant. 
 8.3 Dividend
Equivalents. 
 (a) Any Eligible Individual selected by the Committee may be granted Dividend Equivalents based on the
dividends declared on the shares of Stock that are subject to any Award, to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award is exercised, vests or expires, as determined by the
Committee. Such Dividend Equivalents shall be converted to cash or additional shares of Stock by such formula and at such time and subject to such limitations as may be determined by the Committee. 
 (b) Dividend Equivalents granted with respect to Options or SARs that are intended to be Qualified Performance-Based Compensation shall
be payable, with respect to pre-exercise periods, regardless of whether such Option or SAR is subsequently exercised. 
 8.4 Stock
Payments. Any Eligible Individual selected by the Committee may receive Stock Payments in the manner determined from time to time by the Committee; provided, that unless otherwise determined by the Committee such Stock Payments shall be
made in lieu of base salary, bonus, or other cash compensation otherwise payable to such Participant. The number of shares shall be determined by the Committee and may be based upon the Performance Criteria or other specific performance criteria
determined appropriate by the Committee, determined on the date such Stock Payment is made or on any date thereafter. 
 8.5 Deferred
Stock. Any Eligible Individual selected by the Committee may be granted an award of Deferred Stock in the manner determined from time to time by the Committee. The number of shares of Deferred Stock shall be determined by the Committee and may
be linked to the Performance Criteria or other specific performance criteria determined to be appropriate by the Committee, in each case on a specified date or dates or over any period or periods determined by the Committee. Stock underlying a
Deferred Stock award will not be issued until the Deferred Stock award has vested, pursuant to a vesting schedule or performance criteria set by the Committee. Unless otherwise provided by the Committee, a Participant awarded Deferred Stock shall
have no rights as a Company stockholder with respect to such Deferred Stock until such time as the Deferred Stock Award has vested and the Stock underlying the Deferred Stock Award has been issued. 
  

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 8.6 Restricted Stock Units. The Committee is authorized to make Awards of Restricted Stock Units
to any Eligible Individual selected by the Committee in such amounts and subject to such terms and conditions as determined by the Committee. At the time of grant, the Committee shall specify the date or dates on which the Restricted Stock Units
shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate. At the time of grant, the Committee shall specify the maturity date applicable to each grant of Restricted Stock Units which shall be
no earlier than the vesting date or dates of the Award and may be determined at the election of the grantee. On the maturity date, the Company shall, subject to Section 11.5(b), transfer to the Participant one unrestricted, fully transferable
share of Stock for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited. 
 8.7 Performance Bonus
Awards. Any Eligible Individual selected by the Committee may be granted one or more Performance-Based Awards in the form of a cash bonus (a “Performance Bonus Award”) payable upon the attainment of Performance Goals that are
established by the Committee and relate to one or more of the Performance Criteria, in each case on a specified date or dates or over any period or periods determined by the Committee. Any such Performance Bonus Award paid to a Covered Employee
shall be based upon objectively determinable bonus formulas established in accordance with Article 9. 
 8.8 Term. Except as otherwise
provided herein, the term of any Award of Performance Shares, Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock or Restricted Stock Units shall be set by the Committee in its discretion. 
 8.9 Exercise or Purchase Price. The Committee may establish the exercise or purchase price, if any, of any Award of Performance Shares,
Performance Stock Units, Deferred Stock, Stock Payments or Restricted Stock Units; provided, however, that such price shall not be less than the par value of a share of Stock on the date of grant, unless otherwise permitted by applicable
state law. 
 8.10 Exercise upon Termination of Employment or Service. An Award of Performance Shares, Performance Stock Units,
Dividend Equivalents, Deferred Stock, Stock Payments and Restricted Stock Units shall only be exercisable or payable while the Participant is an Employee, Consultant or a member of the Board, as applicable; provided, however, that the
Committee in its sole and absolute discretion may provide that an Award of Performance Shares, Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock or Restricted Stock Units may be exercised or paid subsequent to a
termination of employment or service, as applicable, or following a Change in Control of the Company, or because of the Participant’s retirement, death or disability, or otherwise; provided, however, that any such provision with respect
to Performance Shares or Performance Stock Units shall be subject to the requirements of Section 162(m) of the Code that apply to Qualified Performance-Based Compensation. 
 8.11 Form of Payment. Payments with respect to any Awards granted under this Article 8 shall be made in cash, in Stock or a combination of both,
as determined by the Committee. 
  

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 8.12 Award Agreement. All Awards under this Article 8 shall be subject to such additional terms
and conditions as determined by the Committee and shall be evidenced by an Award Agreement. 
 ARTICLE 9. 
 PERFORMANCE-BASED AWARDS 
 9.1
Purpose. The purpose of this Article 9 is to provide the Committee the ability to qualify Awards other than Options and SARs and that are granted pursuant to Articles 6 and 8 as Qualified Performance-Based Compensation. If the Committee, in
its discretion, decides to grant a Performance-Based Award to a Covered Employee, the provisions of this Article 9 shall control over any contrary provision contained in Articles 6 or 8; provided, however, that the Committee may in its
discretion grant Awards to Covered Employees that are based on Performance Criteria or Performance Goals but that do not satisfy the requirements of this Article 9. 
 9.2 Applicability. This Article 9 shall apply only to those Covered Employees selected by the Committee to receive Performance-Based Awards. The designation of a Covered Employee as a Participant for a
Performance Period shall not in any manner entitle the Participant to receive an Award for the period. Moreover, designation of a Covered Employee as a Participant for a particular Performance Period shall not require designation of such Covered
Employee as a Participant in any subsequent Performance Period and designation of one Covered Employee as a Participant shall not require designation of any other Covered Employees as a Participant in such period or in any other period. 

9.3 Procedures with Respect to Performance-Based Awards. To the extent necessary to comply with the Qualified Performance-Based Compensation
requirements of Section 162(m)(4)(C) of the Code, with respect to any Award granted under Articles 6 or 8 which may be granted to one or more Covered Employees, no later than ninety (90) days following the commencement of any fiscal year
in question or any other designated fiscal period or period of service (or such other time as may be required or permitted by Section 162(m) of the Code), the Committee shall, in writing, (a) designate one or more Covered Employees,
(b) select the Performance Criteria applicable to the Performance Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period, and (d) specify the
relationship between Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be earned by each Covered Employee for such Performance Period. Following the completion of each Performance Period, the Committee
shall certify in writing whether the applicable Performance Goals have been achieved for such Performance Period. In determining the amount earned by a Covered Employee, the Committee shall have the right to reduce or eliminate (but not to increase)
the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant to the assessment of individual or corporate performance for the Performance Period. 
 9.4 Payment of Performance-Based Awards. Unless otherwise provided in the applicable Award Agreement, a Participant must be employed by the
Company or a Subsidiary on the day a Performance-Based Award for such Performance Period is paid to the Participant. 

  

 14 

 
Furthermore, a Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a Performance Period only if the Performance Goals
for such period are achieved. In determining the amount earned under a Performance-Based Award, the Committee may reduce or eliminate the amount of the Performance-Based Award earned for the Performance Period, if in its sole and absolute
discretion, such reduction or elimination is appropriate. 
 9.5 Additional Limitations. Notwithstanding any other provision of the
Plan, any Award which is granted to a Covered Employee and is intended to constitute Qualified Performance-Based Compensation shall be subject to any additional limitations set forth in Section 162(m) of the Code (including any amendment to
Section 162(m) of the Code) or any regulations or rulings issued thereunder that are requirements for qualification as qualified performance-based compensation as described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed
amended to the extent necessary to conform to such requirements. 
 ARTICLE 10. 
 INDEPENDENT DIRECTOR AWARDS 
 10.1 The
Board may grant Awards to Independent Directors, subject to the limitations of the Plan, pursuant to a written non-discretionary formula established by the Committee, or any successor committee thereto carrying out its responsibilities on the date
of grant of any such Award (the “Independent Director Equity Compensation Policy”). The Independent Director Equity Compensation Policy shall set forth the type of Award(s) to be granted to Independent Directors, the number of
shares of Common Stock to be subject to Independent Director Awards, the conditions on which such Awards shall be granted, become exercisable and/or payable and expire, and such other terms and conditions as the Committee (or such other successor
committee as described above) shall determine in its discretion. 
 ARTICLE 11. 
 PROVISIONS APPLICABLE TO AWARDS 
 11.1
Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the discretion of the Committee, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition
to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant of such other Awards. 
 11.2 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements that set forth the terms, conditions and limitations for each Award which may include the term of an Award, the provisions applicable in the event the
Participant’s employment or service terminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award. 
 11.3 Limits on Transfer. No right or interest of a Participant in any Award may be pledged, encumbered, or hypothecated to or in favor of any party other than the Company or a Subsidiary, or shall be subject to
any lien, obligation, or liability of such Participant to any other 

  

 15 

 
party other than the Company or a Subsidiary. Except as otherwise provided by the Committee, no Award shall be assigned, transferred, or otherwise disposed
of by a Participant other than by will or the laws of descent and distribution. The Committee by express provision in the Award or an amendment thereto may permit an Award (other than an Incentive Stock Option) to be transferred to, exercised by and
paid to certain persons or entities related to the Participant, including but not limited to members of the Participant’s family, charitable institutions, or trusts or other entities whose beneficiaries or beneficial owners are members of the
Participant’s family and/or charitable institutions, or to such other persons or entities as may be expressly approved by the Committee, pursuant to such conditions and procedures as the Committee may establish. Any permitted transfer shall be
subject to the condition that the Committee receive evidence satisfactory to it that the transfer is being made for estate and/or tax planning purposes (or to a “blind trust” in connection with the Participant’s termination of
employment or service with the Company or a Subsidiary to assume a position with a governmental, charitable, educational or similar non-profit institution) and on a basis consistent with the Company’s lawful issue of securities. 
 11.4 Beneficiaries. Notwithstanding Section 11.3, a Participant may, in the manner determined by the Committee, designate a beneficiary to
exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is
subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the
Committee. If the Participant is married and resides in a community property state, a designation of a person other than the Participant’s spouse as his or her beneficiary with respect to more than 50% of the Participant’s interest in the
Award shall not be effective without the prior written consent of the Participant’s spouse. If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled thereto pursuant to the
Participant’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the Committee. 
 11.5 Stock Certificates; Book Entry Procedures. 
 (a) Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award, unless and until the Board
has determined, with advice of counsel, that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the shares
of Stock are listed or traded. All Stock certificates delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal, state, or foreign jurisdiction,
securities or other laws, rules and regulations and the rules of any national securities exchange or automated quotation system on which the Stock is listed, quoted, or traded. The Committee may place legends on any Stock certificate to reference
restrictions applicable to the Stock. In addition to the terms and conditions provided herein, the Board may require that a Participant make such reasonable covenants, agreements, and representations as the Board, in its discretion, deems advisable
in order to comply with any such laws, regulations, or requirements. The Committee shall have the 

  

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right to require any Participant to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including a
window-period limitation, as may be imposed in the discretion of the Committee. 
 (b) Notwithstanding any other provision of
the Plan, unless otherwise determined by the Committee or required by any applicable law, rule or regulation, the Company shall not deliver to any Participant certificates evidencing shares of Stock issued in connection with any Award and instead
such shares of Stock shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator). 
 11.6 Paperless Administration. In the event that the Company establishes, for itself or using the services of a third party, an automated system for documentation, granting or exercise of Awards, such as a system using an internet
website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Participant may be permitted through the use of such an automated system. 
 ARTICLE 12. 
 CHANGES IN CAPITAL STRUCTURE 
 12.1 Adjustments. 
 (a) In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the
shares of Stock or the share price of the Stock other than an Equity Restructuring, the Committee shall make such equitable adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such change with respect to
(a) the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in Sections 3.1 and 3.3); (b) the terms and conditions of any outstanding Awards (including,
without limitation, any applicable performance targets or criteria with respect thereto); and (c) the grant or exercise price per share for any outstanding Awards under the Plan. Any adjustment affecting an Award intended as Qualified
Performance-Based Compensation shall be made consistent with the requirements of Section 162(m) of the Code. 
 (b) In
the event of any transaction or event described in Section 12.1 or any unusual or nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the financial statements of the Company or any affiliate, or of
changes in applicable laws, regulations or accounting principles, the Committee, in its sole and absolute discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the
occurrence of such transaction or event and either automatically or upon the Participant’s request, is hereby authorized to take any one or more of the following actions whenever the Committee determines that such action is appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws,
regulations or principles: 
  

 17 

 (i) To provide for either (A) termination of any such Award in exchange for an
amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or
event described in this Section 12.2 the Committee determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the
Company without payment) or (B) the replacement of such Award with other rights or property selected by the Committee in its sole discretion; 
 (ii) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the
successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; 
 (iii) To make adjustments in the number and type of shares of Common Stock (or other securities or property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock or Deferred Stock
and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding options, rights and awards and options, rights and awards which may be granted in the future; 
 (iv) To provide that such Award shall be exercisable or payable or fully vested with respect to all shares covered thereby,
notwithstanding anything to the contrary in the Plan or the applicable Award Agreement; and 
 (v) To provide that the Award
cannot vest, be exercised or become payable after such event. 
 (c) In connection with the occurrence of any Equity
Restructuring, and notwithstanding anything to the contrary in Sections 12.1(a) and 12.1(b): 
 (i) The number and type of
securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, will be equitably adjusted. The adjustments provided under this Section 12.1(c)(i) shall be nondiscretionary and shall be final and
binding on the affected Participant and the Company. 
 (ii) The Committee shall make such equitable adjustments, if any, as
the Committee in its discretion may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the limitations in
Sections 3.1 and 3.3). 
 (d) The adjustment contemplated by Section 12.2(c) hereof shall not apply, and instead
Section 12.2(a) hereof shall apply to, any Option outstanding as of the date that Section 12.2(c) became effective to the extent that application of Section 12.2(c) to such Option would (A) result in a penalty tax under
Section 409A of the Code and the Department of Treasury proposed and final regulations and guidance thereunder or (B) cause any Incentive Stock Option to fail to qualify as an “incentive stock option” under Section 422 of
the Code. 
  

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 12.2 Acceleration Upon a Change in Control. Notwithstanding Section 12.1, and except as may
otherwise be provided in any applicable Award Agreement or other written agreement entered into between the Company and a Participant, if a Change in Control occurs, then immediately prior to the Change in Control a Participant’s Awards shall
vest and become immediately exercisable and forfeiture restrictions on such Awards shall immediately lapse with respect to fifty percent (50%) of the shares of Stock subject to the Award that are unvested as of the date that the vesting and
exercisability of the Awards is accelerated in accordance with this sentence, and the Award shall thereafter vest and become exercisable and forfeiture restrictions on such Awards shall lapse with respect to the shares that remain unvested as of
such date in equal monthly installments during the remaining term of the Award; provided, however, that, anything to the contrary in the foregoing notwithstanding, if a Change in Control occurs and a Participant’s Awards are not
converted, assumed, or replaced by a successor entity, then immediately prior to the Change in Control such Awards shall become fully vested and immediately exercisable and all forfeiture restrictions on such Awards shall immediately lapse. In
addition, except as may otherwise be provided in any applicable Award Agreement or other written agreement entered into between the Company and a Participant, in the event of a Change in Control, if, during the period commencing on the first
(1st) day of the calendar month immediately preceding the calendar month in which the Change in Control occurs and ending on the last day of the thirteenth (13th) calendar month following the calendar month in which the Change in Control
occurs, the Participant’s employment with or service to the Company (or any successor) terminates due to an involuntary termination thereof by the Company (or any successor) for any reason other than for Cause, death or disability or due to a
Constructive Termination, then the Awards held by the Participant shall fully vest and become immediately exercisable and all forfeiture restrictions on such Awards shall immediately lapse as of the date of such termination of the Participant’s
employment or service. Upon, or in anticipation of, a Change in Control, the Committee may cause any and all Awards outstanding hereunder to terminate at a specific time in the future, including but not limited to the date of such Change in Control,
and shall give each Participant the right to exercise such Awards during a period of time as the Committee, in its sole and absolute discretion, shall determine. In the event that the terms of any agreement between the Company or any Company
subsidiary or affiliate and a Participant contains provisions that conflict with and are more restrictive than the provisions of this Section 12.2, this Section 12.2 shall prevail and control and the more restrictive terms of such
agreement (and only such terms) shall be of no force or effect. 
 12.3 No Other Rights. Except as expressly provided in the Plan, no
Participant shall have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation,
merger, or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no issuance by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Stock subject to an Award or the grant or exercise price of any Award. 
  

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 ARTICLE 13. 
 ADMINISTRATION 
 13.1 Committee. Unless and until the Board delegates administration of the
Plan to a Committee as set forth below, the Plan shall be administered by the full Board, and for such purposes the term “Committee” as used in this Plan shall be deemed to refer to the Board. The Board, at its discretion or as otherwise
necessary to comply with the requirements of Section 162(m) of the Code, Rule 16b-3 promulgated under the Exchange Act or to the extent required by any other applicable rule or regulation, may delegate administration of the Plan to a Committee
consisting of two or more members of the Board. The Committee shall consist solely of two or more members of the Board each of whom is an “outside director,” within the meaning of Section 162(m) of the Code, a Non-Employee Director
and an “independent director” under the NASDAQ rules (or other principal securities market on which shares of Stock are traded); provided that any action taken by the Committee shall be valid and effective, whether or not members of the
Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 13.1 or otherwise provided in any charter of the Committee. Notwithstanding the foregoing: (a) the
full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to all Awards granted to Independent Directors and for purposes of such Awards the term “Committee” as used in
this Plan shall be deemed to refer to the Board and (b) the Committee may delegate its authority hereunder to the extent permitted by Section 13.5. In its sole discretion, the Board may at any time and from time to time exercise any and
all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b-3 under the Exchange Act or Section 162(m) of the Code, or any regulations or rules issued thereunder, are required to be determined in
the sole discretion of the Committee. Except as may otherwise be provided in any charter of the Committee, appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering
written notice to the Board. Vacancies in the Committee may only be filled by the Board. 
 13.2 Action by the Committee. Unless
otherwise established by the Board or in any charter of the Committee, a majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing
by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or
other employee of the Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

 13.3 Authority of Committee. Subject to any specific designation in the Plan, the Committee has the exclusive power, authority and
discretion to: 
 (a) Designate Participants to receive Awards; 
 (b) Determine the type or types of Awards to be granted to each Participant; 
  

 20 

 (c) Determine the number of Awards to be granted and the number of shares of Stock to
which an Award will relate; 
 (d) Determine the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any reload provision, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and
accelerations or waivers thereof, any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Committee in its sole discretion determines; provided, however, that the Committee
shall not have the authority to accelerate the vesting or waive the forfeiture of any Performance-Based Awards; 
 (e)
Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

 (f) Prescribe the form of each Award Agreement, which need not be identical for each Participant; 
 (g) Decide all other matters that must be determined in connection with an Award; 
 (h) Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan; 
 (i) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and 
 (j) Make all other decisions and determinations that may be required pursuant to the Plan or as the Committee deems necessary or
advisable to administer the Plan. 
 13.4 Decisions Binding. The Committee’s interpretation of the Plan, any Awards granted
pursuant to the Plan, any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties. 
 13.5 Delegation of Authority. To the extent permitted by applicable law, the Committee may from time to time delegate to a committee of one or
more members of the Board or one or more officers of the Company the authority to grant or amend Awards to Participants other than (a) Employees who are subject to Section 16 of the Exchange Act, (b) Covered Employees, or
(c) officers of the Company (or members of the Board) to whom authority to grant or amend Awards has been delegated hereunder. Any delegation hereunder shall be subject to the restrictions and limits that the Committee specifies at the time of
such delegation, and the Committee may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 13.5 shall serve in such capacity at the pleasure of the Committee.

  

 21 

 ARTICLE 14. 
 EFFECTIVE AND EXPIRATION DATE 
 14.1 Effective Date. The Plan shall become effective as of the
date immediately prior to the date that the Company’s Registration Statement on Form S-1 in connection with the initial public offering of the Common Stock is declared effective by the U.S. Securities and Exchange Commission, provided that the
Plan has been approved by the Company’s stockholders prior to such date (the “Effective Date”). The Plan shall be deemed to be approved by the stockholders if it receives the affirmative vote of the holders of a majority of the
shares of stock of the Company present or represented and entitled to vote at a meeting duly held in accordance with the applicable provisions of the Company’s Bylaws. 
 14.2 Expiration Date. The Plan shall expire on, and no Award may be granted pursuant to the Plan after the tenth anniversary of the Effective
Date, except that no Incentive Stock Options may be granted under the Plan after the earlier of the tenth anniversary of (i) the date the Plan is approved by the Board or (ii) the Effective Date. Any Awards that are outstanding on the
tenth anniversary of the Effective Date shall remain in force according to the terms of the Plan and the applicable Award Agreement. 
 ARTICLE 15. 
 AMENDMENT, MODIFICATION, AND TERMINATION 
 15.1 Amendment, Modification, and Termination. Subject to Section 16.14, with the approval of the Board, at any time and from time to time,
the Committee may terminate, amend or modify the Plan; provided, however, that (a) 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 (b) stockholder approval shall be required for any amendment to the Plan that (i) increases the number of shares available under the Plan (other than any
adjustment as provided by Article 12), (ii) permits the Committee to grant Options with an exercise price that is below Fair Market Value on the date of grant, or (iii) permits the Committee to extend the exercise period for an Option
beyond ten years from the date of grant. Notwithstanding any provision in this Plan to the contrary, absent approval of the stockholders of the Company, no Option may be amended to reduce the per share exercise price of the shares subject to such
Option below the per share exercise price as of the date the Option is granted and, except as permitted by Article 12, no Option may be granted in exchange for, or in connection with, the cancellation or surrender of an Option having a higher per
share exercise price. 
 15.2 Awards Previously Granted. Except with respect to amendments made pursuant to Section 16.14, no
termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan without the prior written consent of the Participant. 
  

 22 

 ARTICLE 16. 
 GENERAL PROVISIONS 
 16.1 No Rights to Awards. No Eligible Individual or other person shall
have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Eligible Individuals, Participants or any other persons uniformly. 
 16.2 No Stockholders Rights. Except as otherwise provided herein, a Participant shall have none of the rights of a stockholder with respect to
shares of Stock covered by any Award until the Participant becomes the record owner of such shares of Stock. 
 16.3 Withholding. The
Company or any Subsidiary shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Participant’s
employment tax obligations) required by law to be withheld with respect to any taxable event concerning a Participant arising as a result of this Plan. The Committee may in its discretion and in satisfaction of the foregoing requirement allow a
Participant to elect to have the Company withhold shares of Stock otherwise issuable under an Award (or allow the return of shares of Stock) having a Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision of
the Plan, the number of shares of Stock which may be withheld with respect to the issuance, vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such Award within six months (or such other period as may be
determined by the Committee) after such shares of Stock were acquired by the Participant from the Company) in order to satisfy the Participant’s federal, state, local and foreign income and payroll tax liabilities with respect to the issuance,
vesting, exercise or payment of the Award shall be limited to the number of shares which have a Fair Market Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory withholding
rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income. 
 16.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant’s employment or services at any
time, nor confer upon any Participant any right to continue in the employ or service of the Company or any Subsidiary. 
 16.5 Unfunded
Status of Awards. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall
give the Participant any rights that are greater than those of a general creditor of the Company or any Subsidiary. 
 16.6
Indemnification. To the extent allowable pursuant to applicable law, each member of the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and
against and from any and all amounts paid by 

  

 23 

 
him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons
may be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. 
 16.7 Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account in determining any benefits pursuant to any
pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder. 
 16.8 Expenses. The expenses of administering the Plan shall be borne by the Company and its Subsidiaries. 
 16.9 Titles and Headings. The titles and headings of the Sections in the Plan are for convenience of reference only and, in the event of any
conflict, the text of the Plan, rather than such titles or headings, shall control. 
 16.10 Fractional Shares. No fractional shares
of Stock shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate. 
 16.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, the Plan, and any Award granted or
awarded to any Participant who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 under the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to
conform to such applicable exemptive rule. 
 16.12 Government and Other Regulations. The obligation of the Company to make payment of
awards in Stock or otherwise shall be subject to all applicable laws, rules, and regulations, and to such approvals by government agencies as may be required. The Company shall be under no obligation to register pursuant to the Securities Act, as
amended, any of the shares of Stock paid pursuant to the Plan. If the shares paid pursuant to the Plan may in certain circumstances be exempt from registration pursuant to the Securities Act, as amended, the Company may restrict the transfer of such
shares in such manner as it deems advisable to ensure the availability of any such exemption. 
 16.13 Governing Law. The Plan and all
Award Agreements shall be construed in accordance with and governed by the laws of the State of Delaware. 
  

 24 

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

* * * * * 
  

 25 

 NOVACEA, INC. 
 2006 INCENTIVE AWARD PLAN 
 STOCK OPTION GRANT NOTICE AND 
 STOCK OPTION AGREEMENT 
 Novacea, Inc.,
a Delaware corporation (the “Company”), pursuant to its 2006 Incentive Award Plan (the “Plan”), hereby grants to the holder listed below (“Participant”), an option to purchase
the number of shares of the Company’s common stock, par value $.001 (“Stock”), set forth below (the “Option”). This Option is subject to all of the terms and conditions set forth herein and in the
Stock Option Agreement attached hereto as Exhibit A (the “Stock Option Agreement”) and the Plan, which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Grant Notice and the Stock Option Agreement. 
  

			
	 Participant:
	  	
		  	 
	 Grant Date:
	  	
		  	 
	 Vesting Commencement Date:
	  	
		  	 
	 Exercise Price per Share:
	  	$
		  	 
	 Total Exercise Price:
	  	$
		  	 
	 Total Number of Shares Subject
 to the Option:
	  	shares
		  	 
	 Expiration Date:
	  	
		  	 

 Type of Option:          ̈  Incentive Stock Option          ̈  Non-Qualified Stock Option 
  

	Vesting Schedule:	The Option shall vest with respect to twenty-five percent (25%) of the total number of Shares subject to the Option on the first anniversary of the Vesting Commencement
Date, and with respect to an additional 1/48th of the total number of Shares subject to the Option on the corresponding day of each consecutive month measured from the first anniversary of the Vesting Commencement Date (or on the last day of a
month, to the extent such month does not have the corresponding day), subject to Participant’s continued status as a Service Provider on each applicable vesting date, such that all Shares subject to the Option shall be fully vested on the
fourth anniversary of the Vesting Commencement Date. 

 By his or her signature, the Participant agrees to be bound by
the terms and conditions of the Plan, the Stock Option Agreement and this Grant Notice. The Participant has reviewed the Stock Option Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Stock Option Agreement and the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the
Committee upon any questions arising under the Plan or relating to the Option. 
  

							
	 NOVACEA, INC.
	  	PARTICIPANT
				
	 By:
	  		  	By:	  	
		  	 	  		  	 
	 Print Name:
	  		  	Print Name:	  	
		  	 	  		  	 
	 Title:
	  		  		  	
		  	 	  		  	
	 Address:
	  		  	Address:	  	
		  	 	  		  	 
		  		  		  	
		  	 	  		  	 

 EXHIBIT A 
 TO STOCK OPTION GRANT NOTICE 
 STOCK OPTION AGREEMENT 
 Pursuant to the Stock Option Grant Notice (the “Grant Notice”) to which this Stock Option Agreement (this
“Agreement”) is attached, Novacea, Inc., a Delaware corporation (the “Company”), has granted to the Participant an option under the Company’s 2006 Incentive Award Plan (the
“Plan”) to purchase the number of shares of Stock indicated in the Grant Notice. 
 ARTICLE I. 
 GENERAL 
 1.1 Defined Terms.
Wherever the following terms are used in this Agreement they shall have the meanings specified below, unless the context clearly indicates otherwise. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and
the Grant Notice. 
 (a) “Administrator” shall mean the Board or the Committee responsible for
conducting the general administration of the Plan in accordance with Article 12 of the Plan; provided that if the Participant is an Independent Director, “Administrator” shall mean the Board. 
 (b) “Termination of Consultancy” shall mean the time when the engagement of the Participant as a Consultant to
the Company or a Subsidiary is terminated for any reason, with or without cause, including, but not by way of limitation, by resignation, discharge, death or retirement, but excluding: (a) terminations where there is a simultaneous employment
or continuing employment of the Participant by the Company or any Subsidiary, and (b) terminations where there is a simultaneous re-establishment of a consulting relationship or continuing consulting relationship between the Participant and the
Company or any Subsidiary. The Administrator, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Consultancy, including, but not by way of limitation, the question of whether a particular
leave of absence constitutes a Termination of Consultancy. Notwithstanding any other provision of the Plan, the Company or any Subsidiary has an absolute and unrestricted right to terminate a Consultant’s service at any time for any reason
whatsoever, with or without cause, except to the extent expressly provided otherwise in writing. 
 (c)
“Termination of Directorship” shall mean the time when the Participant, if he or she is or becomes an Independent Director, ceases to be a Director for any reason, including, but not by way of limitation, a termination by
resignation, failure to be elected, death or retirement. The Board, in its sole and absolute discretion, shall determine the effect of all matters and questions relating to Termination of Directorship with respect to Independent Directors.

 (d) “Termination of Employment” shall mean the time when the employee-employer relationship
between the Participant and the Company or any Subsidiary is terminated for any reason, with or without cause, including, but not by way of limitation, a termination by resignation, discharge, death, disability or retirement; but excluding:
(a) terminations where there is a simultaneous reemployment or continuing employment of the Participant by the Company or any Subsidiary, and (b) terminations where there is a simultaneous establishment of a consulting relationship or
continuing consulting relationship between the Participant and the Company or any Subsidiary. The Administrator, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a particular leave of 

  

 A-1 

 
absence constitutes a Termination of Employment; provided, however, that, if this Option is an Incentive Stock Option, unless otherwise determined by the
Administrator in its discretion, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Employment if, and to the extent that, such
leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section. 
 (e) “Termination of Services” shall mean the Participant’s Termination of Consultancy, Termination of
Directorship or Termination of Employment, as applicable. 
 1.2 Incorporation of Terms of Plan. The Option is subject to the terms
and conditions of the Plan which are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control. 
 ARTICLE II. 
 GRANT OF OPTION 
 2.1 Grant of Option. In consideration of the Participant’s past and/or continued employment with or service to the Company or a Subsidiary
and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the Company irrevocably grants to the Participant the Option to purchase any part or all of an
aggregate of the number of shares of Stock set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and this Agreement. Unless designated as a Non-Qualified Stock Option in the Grant Notice, the Option shall be an Incentive
Stock Option to the maximum extent permitted by law. 
 2.2 Exercise Price. The exercise price of the shares of Stock subject to the
Option shall be as set forth in the Grant Notice, without commission or other charge; provided, however, that the price per share of the shares of Stock subject to the Option shall not be less than 100% of the Fair Market Value of a
share of Stock on the Grant Date. Notwithstanding the foregoing, if this Option is designated as an Incentive Stock Option and the Participant owns (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting
power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of the Company (each within the meaning of Section 424 of the Code), the price per share of the shares
of Stock subject to the Option shall not be less than 110% of the Fair Market Value of a share of Stock on the Grant Date. 
 2.3
Consideration to the Company. In consideration of the grant of the Option by the Company, the Participant agrees to render faithful and efficient services to the Company or any Subsidiary. Nothing in the Plan or this Agreement shall confer
upon the Participant any right to continue in the employ or service of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to
discharge or terminate the services of the Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and the Participant.

  

 A-2 

 ARTICLE III. 
 PERIOD OF EXERCISABILITY 
 3.1 Commencement of Exercisability. 
 (a) Subject to Sections 3.2, 3.3, 5.8 and 5.10 hereof, the Option shall become vested and exercisable in such amounts and at such times
as are set forth in the Grant Notice. 
 (b) No portion of the Option which has not become vested and exercisable at the date
of the Participant’s Termination of Employment, Termination of Directorship or Termination of Consultancy shall thereafter become vested and exercisable, except as may be otherwise provided in this Agreement, by the Administrator or as set
forth in a written agreement between the Company and the Participant. 
 (c) Notwithstanding anything in this Sections 3.1,
pursuant to Section 12.2 of the Plan, the Option shall become vested and exercisable immediately prior to the occurrence of a Change in Control with respect to fifty percent (50%) of the shares of Stock subject to the Option that are
unvested as of the date that the vesting and exercisability of the Option is accelerated in accordance with this Section 3.1(c), and the Option shall thereafter vest and become exercisable with respect to the shares of Stock that remain
unvested as of such date in equal monthly installments during the remaining term of the Option. 
 (d) Notwithstanding
anything in this Sections 3.1, pursuant to Section 12.2 of the Plan, the Option shall become fully vested and exercisable in the event of a Change in Control, in connection with which the successor corporation does not assume the Option or
substitute an equivalent right for the Option. Should the successor corporation assume the Option or substitute an equivalent right, then no such acceleration shall apply. 
 (e) Notwithstanding anything in this Section 3.1, except as may be otherwise
provided in a written agreement between the Company and the Participant, pursuant to Section 12.2 of the Plan, if during the period commencing on the first (1st) day of the calendar month immediately preceding the calendar month in which the Change in Control occurs and ending on the last day of the thirteenth (13th) calendar month following the calendar month in which the Change in Control occurs, the Participant’s employment with or service to the
Company (or any successor) for any reason other than for Cause, death or disability or due to a Constructive Termination, then the Option shall fully vest and become immediately exercisable as of the date of the termination of the Participant’s
employment or service. 
 3.2 Duration of Exercisability. The installments provided for in the vesting schedule set forth in the Grant
Notice are cumulative. Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3 hereof.

 3.3 Expiration of Option. The Option may not be exercised to any extent by anyone after the first to occur of the following events:

 (a) The expiration of ten years from the Grant Date; 
 (b) If this Option is designated as an Incentive Stock Option and the Participant owned (within the meaning of Section 424(d) of the
Code), at the time the Option was granted, more than 

  

 A-3 

 
10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent
corporation” of the Company (each within the meaning of Section 424 of the Code), the expiration of five years from the Grant Date; 
 (c) The expiration of three months from the date of the Participant’s Termination of Services, unless such termination occurs by reason of the Participant’s death or Disability; or 
 (d) The expiration of one year from the date of the Participant’s Termination of Services by reason of the Participant’s death
or Disability. 
 The Participant acknowledges that an Incentive Stock Option exercised more that three months after the Participant’s
Termination of Employment, other than by reason of death or Disability, will be taxed as a Non-Qualified Stock Option. 
 3.4 Special Tax
Consequences. The Participant acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time the Option is granted) of all shares of Stock with respect to which Incentive Stock Options, including the Option, are
exercisable for the first time by the Participant in any calendar year exceeds $100,000, the Option and such other options shall be Non-Qualified Stock Options to the extent necessary to comply with the limitations imposed by Section 422(d) of
the Code. The Participant further acknowledges that the rule set forth in the preceding sentence shall be applied by taking the Option and other “incentive stock options” into account in the order in which they were granted, as determined
under Section 422(d) of the Code and the Treasury Regulations thereunder. 
 ARTICLE IV. 
 EXERCISE OF OPTION 
 4.1 Person
Eligible to Exercise. Except as provided in Sections 5.2(b) and 5.2(c) hereof, during the lifetime of the Participant, only the Participant may exercise the Option or any portion thereof. After the death of the Participant, any exercisable
portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3 hereof, be exercised by the Participant’s personal representative or by any person empowered to do so under the deceased the
Participant’s will or under the then applicable laws of descent and distribution. 
 4.2 Partial Exercise. Any exercisable
portion of the Option or the entire Option, if then wholly exercisable, may be exercised in whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3 hereof. 
 4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of the Company (or
any third party administrator or other person or entity designated by the Company) of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3 hereof: 
 (a) An Exercise Notice in a form specified by the Administrator, stating that the Option or portion thereof is thereby exercised, such
notice complying with all applicable rules established by the Administrator; 
 (b) The receipt by the Company of full
payment for the shares of Stock with respect to which the Option or portion thereof is exercised, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4 hereof;

  

 A-4 

 (c) Any other written representations as may be required in the Administrator’s
reasonable discretion to evidence compliance with the Securities Act or any other applicable law rule, or regulation; and 
 (d) In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 hereof by any person or persons other than the Participant, appropriate proof of the right of such person or persons to exercise the Option.

 Notwithstanding any of the foregoing, the Company shall have the right to specify all conditions of the manner of exercise, which conditions may vary by
country and which may be subject to change from time to time. 
 4.4 Method of Payment. Payment of the exercise price shall be by any
of the following, or a combination thereof, at the election of the Participant: 
 (a) Cash; 
 (b) Check; 
 (c) With the consent of the Administrator, delivery of a notice that the Participant has placed a market sell order with a broker with respect to shares of Stock then issuable upon exercise of the Option, and that the broker has been
directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate exercise price; provided, that payment of such proceeds is then made to the Company upon settlement of such sale; 

(d) With the consent of the Administrator, surrender of other shares of Stock which (A) in the case of shares of Stock acquired
from the Company, have been owned by the Participant for more than six (6) months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the shares of Stock with respect
to which the Option or portion thereof is being exercised; 
 (e) With the consent of the Administrator, surrendered shares
of Stock issuable upon the exercise of the Option having a Fair Market Value on the date of exercise equal to the aggregate exercise price of the shares of Stock with respect to which the Option or portion thereof is being exercised; or 

(f) With the consent of the Administrator, property of any kind which constitutes good and valuable consideration. 
 4.5 Conditions to Issuance of Stock Certificates. The shares of Stock deliverable upon the exercise of the Option, or any portion thereof, may be
either previously authorized but unissued shares of Stock or issued shares of Stock which have then been reacquired by the Company. Such shares of Stock shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any
shares of Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions: 
 (a) The admission of such shares of Stock to listing on all stock exchanges on which such Stock is then listed; 
 (b) The completion of any registration or other qualification of such shares of Stock under any state or federal law or under rulings or regulations of the Securities and Exchange Commission 

  

 A-5 

 
or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; 
 (c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its
absolute discretion, determine to be necessary or advisable; 
 (d) The receipt by the Company of full payment for such
shares of Stock, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4 hereof; and 
 (e) The lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish
for reasons of administrative convenience. 
 4.6 Rights as Stockholder. The holder of the Option shall not be, nor have any of the
rights or privileges of, a stockholder of the Company in respect of any shares of Stock purchasable upon the exercise of any part of the Option unless and until such shares of Stock shall have been issued by the Company to such holder (as evidenced
by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment will be made for a dividend or other right for which the record date is prior to the date the shares of Stock are issued,
except as provided in Section 12.1 of the Plan. 
 ARTICLE V. 
 OTHER PROVISIONS 
 5.1 Administration. The Administrator shall have the
power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all
interpretations and determinations made by the Administrator in good faith shall be final and binding upon Participant, the Company and all other interested persons. No member of the Committee or the Board shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan, this Agreement or the Option. 
 5.2 Option Not
Transferable. 
 (a) Subject to Section 5.2(b) hereof, the Option may not be sold, pledged, assigned or transferred
in any manner other than by will or the laws of descent and distribution, unless and until the shares of Stock underlying the Option have been issued, and all restrictions applicable to such shares of Stock have lapsed. Neither the Option nor any
interest or right therein shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be
null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence. 
 (b)
Notwithstanding any other provision in this Agreement, with the consent of the Administrator and to the extent the Option is not intended to qualify as an Incentive Stock Option, the Participant may transfer the Option (or any portion thereof) to
any one or more Permitted Transferees (as defined below), subject to the following terms and conditions: (i) any portion of the Option transferred to 

  

 A-6 

 
a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than by will or the laws of descent and distribution;
(ii) any portion of the Option which is transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Option as applicable to the Participant (other than the ability to further transfer the Option);
and (iii) the Participant and the Permitted Transferee shall execute any and all documents requested by the Administrator, including, without limitation documents to (A) confirm the status of the transferee as a Permitted Transferee,
(B) satisfy any requirements for an exemption for the transfer under applicable federal and state securities laws and (C) evidence the transfer. For purposes of this Section 5.2(b), “Permitted Transferee” shall
mean, with respect to a Participant, 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,
including adoptive relationships, any person sharing the Participant’s household (other than a tenant or employee), a trust in which these persons (or the Participant) control the management of assets, and any other entity in which these
persons (or the Participant) own more than fifty percent of the voting interests, or any other transferee specifically approved by the Administrator after taking into account any state or federal tax or securities laws applicable to transferable
Options. 
 (c) Unless transferred to a Permitted Transferee in accordance with Section 5.2(b) hereof, during the
lifetime of Participant, only Participant may exercise the Option or any portion thereof. Subject to such conditions and procedures as the Administrator may require, a Permitted Transferee may exercise the Option or any portion thereof during
Participant’s lifetime. After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3 hereof, be exercised by Participant’s personal representative
or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution. 
 5.3 Adjustments. The Participant acknowledges that the Option is subject to modification and termination in certain events as provided in this Agreement and Article 11 of the Plan. 
 5.4 Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of
the Company at the address given beneath the signature of the Company’s authorized officer on the Grant Notice, and any notice to be given to Participant shall be addressed to Participant at the address given beneath Participant’s
signature on the Grant Notice. By a notice given pursuant to this Section 5.4, either party may hereafter designate a different address for notices to be given to that party. Any notice which is required to be given to Participant shall, if
Participant is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section 4.1 hereof by written notice under this Section 5.4. Any notice shall be deemed duly given when sent via email or when sent by
certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 
 5.5 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

 5.6 Governing Law; Severability. The laws of the State of Delaware shall govern the interpretation, validity, administration,
enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws. 
 5.7 Conformity to Securities Laws. The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange 

  

 A-7 

 
Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the
Option is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations. 
 5.8 Amendments, Suspension and Termination. To the extent permitted by the Plan, this Agreement
may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Committee or the Board, provided, that, except as may otherwise be provided by the Plan, no amendment, modification,
suspension or termination of this Agreement shall adversely effect the Option in any material way without the prior written consent of the Participant. 
 5.9 Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the
Company. Subject to the restrictions on transfer herein set forth in Section 5.2 hereof, this Agreement shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns. 
 5.10 Notification of Disposition. If this Option is designated as an Incentive Stock Option, Participant shall give prompt notice to the Company
of any disposition or other transfer of any shares of Stock acquired under this Agreement if such disposition or transfer is made (a) within two years from the Grant Date with respect to such shares of Stock or (b) within one year after
the transfer of such shares of Stock to him. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such
disposition or other transfer. 
 5.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the
Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Option and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the
Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to
conform to such applicable exemptive rule 
 5.12 Not a Contract of Employment. Nothing in this Agreement or in the Plan shall confer
upon the Participant any right to continue to serve as an employee or other service provider of the Company or any of its Subsidiaries. 
 5.13 Entire Agreement. The Plan, the Grant Notice and this Agreement (including all Exhibits thereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company
and Participant with respect to the subject matter hereof. 
 5.14 Section 409A. Notwithstanding any other provision of the Plan,
this Agreement or the Grant Notice, the Plan, this Agreement and the Grant Notice shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A of the U.S. Internal Revenue Code of 1986, as amended
(together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section
409A”). The Committee may, in its discretion, adopt such amendments to the Plan, this Agreement or the Grant Notice or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take
any other actions, as the Committee determines are necessary or appropriate to comply with the requirements of Section 409A. 
  

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