Document:

atra-ex101_100.htm

 

Exhibit 10.1

CONSENT TO SUBLEASE

THIS CONSENT TO SUBLEASE (“Consent Agreement”) is entered into as of May 13, 2016, by and among PR 701 GATEWAY, LLC, a Delaware limited liability company (“Landlord”), ATARA BIOTHERAPEUTICS, INC., a Delaware corporation (“Atara”), and INTREXON CORPORATION, a Virginia corporation (“lntrexon”).

RECITALS:

	
A.
	
Landlord (as successor in interest to DWF III Gateway, LLC, a Delaware limited liability company), as landlord, and Accesia, Inc., a Virginia corporation (“Accesia”), as tenant, are parties to that certain Office Lease dated as of November 13, 2012 (the “Accesia Lease”), pursuant to which Landlord leased to Accesia certain premises containing approximately 7,038 rentable square feet (the “Premises”) described as Suite 200 of the building located at 701 Gateway Boulevard, South San Francisco, California (the “Building”).

	
B.
	
Accesia and Atara entered into that certain Sublease Agreement (the “Original Sublease”) dated as of September 11, 2014, pursuant to which Accesia agreed to sublease the Premises to Atara. Landlord consented to the Original Sublease pursuant to that certain Landlord Consent to Sublease dated October 20, 2014.

	
C.
	
Landlord and Accesia entered into that certain Lease Termination Agreement (the “Accesia Lease Termination Agreement”) dated as of May 12, 2015, pursuant to which the Accesia Lease terminated as of June 1, 2015.

	
D.
	
As part of the transactions contemplated by the Accesia Lease Termination Agreement, Landlord and Atara entered into that certain Attornment Agreement dated as of June 9, 2015, pursuant to which Landlord became the successor-in-interest to Accesia and the Original Sublease continued as a direct sublease between Landlord and Atara.

	
E.
	
Atara and lntrexon have entered into that certain Sublease Agreement dated as of April 21, 2016 and attached hereto as Exhibit A (the “Atara Sublease”), pursuant to which Atara has agreed to sublease to Intrexon certain premises described as follows: Suite 200 of the Building, comprised of approximately 7,038 rentable square feet (the “Sublet Premises”) constituting all of the Premises

	
F.
	
Atara and lntrexon have requested Landlord’s consent to the Atara Sublease, and Landlord has agreed to give such consent upon the terms and conditions contained in this Consent Agreement.

NOW THEREFORE, in consideration of the foregoing preambles which by this reference are incorporated herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord hereby consents to the Atara Sublease subject to the following terms and conditions, all of which are hereby acknowledged and agreed to by Atara and lntrexon:

	
1.
	
Atara Sublease Agreement.  Atara and lntrexon hereby represent that a true and complete copy of the Atara Sublease is attached hereto and made a part hereof as Exhibit A, and Atara and lntrexon agree that the Atara Sublease with respect to Landlord and/or the Sublet Premises shall not be modified without Landlord’s prior written consent, which consent shall not be unreasonably withheld.

	
2.
	
Representations.  Atara hereby represents and warrants that Atara (i) has full power and authority to sublease the Sublet Premises to lntrexon, (ii) has not transferred or conveyed its interest in the Original Sublease to any person or entity collaterally or otherwise, and (iii) has full power and authority to enter into the Atara Sublease and this Consent Agreement. Intrexon hereby represents and warrants that Intrexon has full power and authority to enter into the Atara Sublease and this Consent Agreement.

	
3.
	
Indemnity and Insurance.  Intrexon hereby assumes, with respect to Landlord, all of the indemnity obligations of Atara under the Original Sublease with respect to the Sublet Premises. In addition, lntrexon shall obtain and maintain the insurance required under Section 2.07 of the Original Sublease, as amended by Section 8 of the Atara Sublease. Nothing contained in this Section 3 shall be construed as relieving or releasing Atara from any such indemnity or insurance obligations. Notwithstanding the foregoing, to the extent the same is legally permissible, Atara may satisfy such insurance obligation for itself and on behalf of Intrexon.

	
4.
	
No Release.  Nothing contained in the Atara Sublease or this Consent Agreement shall be construed as relieving or releasing Atara from any of its obligations under the Original Sublease, it being expressly understood and agreed that Atara shall remain liable for such obligations notwithstanding anything contained in the Atara Sublease or this Consent Agreement or any 

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subsequent assignment(s), sublease(s) or transfer(s) of the interest of the subtenant under the Original Sublease. Atara shall be responsible for the collection of all rent due it from Intrexon, and for the performance of all the other terms and conditions of the Atara Sublease, it being understood that Landlord is not a party to the Atara Sublease and, notwithstanding anything to the contrary contained in the Atara Sublease, is not bound by any terms, provisions, representations or warranties contained in the Atara Sublease and is not obligated to Atara or lntrexon for any of the duties and obligations contained therein. 

	
5.
	
Costs.  Atara shall reimburse Landlord for all reasonable costs and attorneys’ fees incurred by Landlord in preparing this Consent Agreement. Such costs and expenses shall be paid to Landlord, as Additional Rent under the Original Sublease, within ten (10) days following Landlord’s demand therefor.

	
6.
	
No Transfer.  Intrexon shall not further sublease the Sublet Premises, assign its interest as the subtenant under the Atara Sublease or otherwise transfer its interest in the Sublet Premises or the Atara Sublease to any person or entity without the written consent of Landlord, which Landlord may withhold in its sole discretion.

	
7.
	
Original Sublease.  The parties agree that the Atara Sublease is subject and subordinate to the terms of the Original Sublease, and all terms of the Original Sublease, other than Atara’s obligation to pay Base Rent, are incorporated into the Atara Sublease. In no event shall the Atara Sublease or this Consent Agreement be construed as granting or conferring upon Atara or Intrexon any greater rights than those contained in the Original Sublease nor shall there be any diminution of the rights and privileges of the Landlord under the Original Sublease, nor shall the Original Sublease be deemed modified in any respect. Without limiting the scope of the preceding sentence, any construction or alterations performed in or to the Sublet Premises shall be performed with Landlord’s prior written approval and in accordance with the terms and conditions of the Original Sublease. It is hereby acknowledged and agreed that any provisions in the Atara Sublease which limit the manner in which Atara may amend the Original Sublease are binding only upon Atara and Intrexon as between such parties. Landlord shall not be bound in any manner by such provisions and may rely upon Atara’s execution of any agreements amending or terminating the Original Sublease subsequent to the date hereof notwithstanding any contrary provisions in the Atara Sublease.

	
8.
	
Parking and Services.  Any parking rights granted to Intrexon pursuant to the Atara Sublease shall be satisfied out of the parking rights, if any, granted to Atara under the Original Sublease. Atara hereby authorizes Intrexon, as agent for Atara, to obtain services and materials for or related to the Sublet Premises, and Atara agrees to pay for such services and materials as Additional Rent under the Original Sublease upon written demand from Landlord. However, as a convenience to Atara, Landlord may bill lntrexon directly for such services and materials, or any portion thereof, in which event lntrexon shall pay for the services and materials so billed upon written demand, provided that such billing shall not relieve Atara from its primary obligation to pay for such services and materials.

	
9.
	
Attornment.  If the Original Sublease or Atara’s right to possession thereunder terminates for any reason prior to expiration of the Atara Sublease, lntrexon agrees, at the written election of Landlord, to attorn to Landlord upon the then executory terms and conditions of the Atara Sublease for the remainder of the term of the Atara Sublease. In the event of any such election by Landlord, Landlord will not be (a) liable for any Rent paid by Intrexon to Atara more than one month in advance, or any security deposit paid by Intrexon to Atara, unless same has been transferred to Landlord by Atara; (b) liable for any act or omission of Atara under the Original Sublease, Atara Sublease or any other agreement between Atara and Intrexon or for any default of Atara under any such documents which occurred prior to the effective date of the attornment; (c) subject to any defenses or offsets that Intrexon may have against Atara which arose prior to the effective date of the attornment; (d) bound by any changes or modifications made to the Atara Sublease without the written consent of Landlord, (e) obligated in any manner with respect to the transfer, delivery, use or condition of any furniture, equipment or other personal property in the Sublet Premises which Sublandord agreed would be transferred to Intrexon or which Atara agreed could be used by Intrexon during the term of the Atara Sublease, or (f) liable for the payment of any improvement allowance, or any other payment, credit, offset or amount due from Atara to Intrexon under the Atara Sublease. If Landlord does not elect to have Intrexon attorn to Landlord as described above, the Atara Sublease and all rights of Intrexon in the Sublet Premises shall terminate upon the date of termination of the Original Sublease or Atara’s right to possession thereunder. It is all parties’ expressed intent that, should the Original Sublease terminate for any reason whatsoever, including the voluntary surrender of same by Atara and the acceptance thereof by Landlord, then the Atara Sublease shall terminate. This provision is entered into with full knowledge of the case of Buttner v. Kasser (1912) 19 Cal.App. 755, and it is the parties’ express intent that the holding of Buttner and similar cases shall not apply to the Atara Sublease. The terms of this Section 9 supercede any contrary provisions in the Atara Sublease.

	
10.
	
Payments Under the Atara Sublease.  If at any time Atara is in default under the terms of the Original Sublease, Landlord shall have the right to contact Intrexon and require Intrexon to pay all Rent due under the Atara Sublease directly to Landlord until such time as Atara has cured such default. lntrexon agrees to pay such sums directly to Landlord if requested by Landlord, and Atara agrees that any such sums paid by lntrexon shall be deemed applied against any sums owed by Intrexon under the Atara Sublease. Any such sums received by Landlord from lntrexon shall be received by Landlord on behalf of Atara and shall be 

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applied by Landlord to any sums past due under the Original Sublease, in such order of priority as required under the Original Sublease or, if the Original Sublease is silent in such regard, then in such order of priority as Landlord deems appropriate. The receipt of such funds by Landlord shall in no manner be deemed to create a direct lease or sublease between Landlord and Intrexon. If Intrexon fails to deliver its Atara Sublease payments directly to Landlord as required herein following receipt of written notice from Landlord as described above, then Landlord shall have the right to remove any signage of Intrexon, at Intrexon’s cost, located outside the Premises or in the Building lobby or elsewhere in the Building and to pursue any other rights or remedies available to Landlord at law or in equity. 

	
11.
	
Excess Rent.  If Landlord is entitled to any excess rent from Atara pursuant to the terms of the Original Sublease, then, in addition to all Rent otherwise payable by Atara to Landlord under the Original Sublease, Atara shall also pay to Landlord the portion of the excess rent to which Landlord is entitled under the Original Sublease, in the manner described in the Original Sublease. Landlord’s failure to bill Atara for, or to otherwise collect, such sums shall in no manner be deemed a waiver by Landlord of its right to collect such sums in accordance with the Original Sublease.

	
12.
	
Atara Notice Address.  Atara’s new address for notices to Atara under the Original Sublease shall be as follows: Atara Biotherapeutics, Inc., 611 Gateway Boulevard, Suite 900, South San Francisco, California 94080, Attention: General Counsel.

	
13.
	
ERISA.  It is understood that from time to time during the term of the Original Sublease, Landlord may be subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and as a result may be prohibited by law from engaging in certain transactions. Atara and Intrexon each represents and warrants after due inquiry that at the time this Consent Agreement is entered into and at any time thereafter when its terms are amended or modified, none of Atara, Intrexon or their respective “affiliates” (as defined in Part VI (c) of Prohibited Transaction Exemption 84-14 (“PTE 84-14”), as amended) has the authority to appoint or terminate The Prudential Insurance Company of America (“Prudential”) as an investment manager to any employee benefit plan invested in the Prudential separate account PRISA, nor the authority to negotiate the terms of any management agreement between Prudential and any such employee benefit plan for its investment in PRISA. Further, neither Atara nor Intrexon is “related” to Prudential within the meaning of Part VI(h) of PTE 84-14.

	
14.
	
Authority.  Each signatory of this Consent Agreement represents hereby that he or she has the authority to execute and deliver the same on behalf of the party hereto for which such signatory is acting. Neither Atara nor Intrexon is, nor shall either Atara or Intrexon during the term of the Original Sublease become, a person or entity with whom Landlord is restricted from doing business under the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, H. R. 3162, Public Law 107-56 (commonly known as the “USA Patriot Act”) and Executive Order Number 13224 on Terrorism Financing, effective September 24, 2001 and regulations promulgated pursuant thereto (collectively, “Anti­ Terrorism Laws”), including without limitation persons and entities named on the Office of Foreign Asset Control Specially Designated Nationals and Blocked Persons List (collectively, “Prohibited Persons”). Neither Atara nor lntrexon is currently engaged in any transactions or dealings, or otherwise associated with, any Prohibited Persons in connection with the use or occupancy of the Premises or the Building. Neither Atara nor lntrexon will, during the term of the Original Lease, engage in any transactions or dealings, or be otherwise associated with, any Prohibited Persons in connection with the use or occupancy of the Premises or the Building. If at any time after the date hereof either Atara or Intrexon becomes a Prohibited Person, then Atara or Intrexon, as applicable, shall notify Landlord within five (5) business days after becoming aware of such designation. If either Atara or Intrexon breaches any representation or covenant set forth in this Section, or if either Atara or Intrexon hereafter becomes a Prohibited Person, then in any such event, the same shall constitute a breach of the Original Sublease, entitling Landlord to any and all remedies under the Original Sublease or at law or in equity (including the right to terminate the Original Sublease without affording any notice or cure period).

	
15.
	
Certified Access Specialist.  Pursuant to California Civil Code Section 1938, Landlord hereby notifies Atara and Intrexon that as of the date of this Consent Agreement, the Sublet Premises has not undergone inspection by a “Certified Access Specialist” to determine whether the Sublet Premises meet all applicable construction-related accessibility standards under California Civil Code Section 55.53.

	
16.
	
Limitation of Landlord’s Liability.  Redress for any claim against Landlord under this Consent Agreement shall be limited to and enforceable only against and to the extent of Landlord’s interest in the Building. The obligations of Landlord under this Consent Agreement, if any, are not intended to be and shall not be personally binding on, nor shall any resort be had to the private properties of, any of its or its investment manager’s trustees, directors, officers, partners, beneficiaries, members, stockholders, employees, or agents, and in no case shall Landlord be liable to Atara and/or Intrexon hereunder for any lost profits, damage to business, or any form of special, indirect or consequential damage.

[Signature Page Follows]

 

 

 

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IN WITNESS WHEREOF, Landlord, Atara and Intrexon have executed this Consent Agreement as of the date set forth above.

 

	
LANDLORD:
	
 

	
 
	
 

	
PR 701 GATEWAY, LLC,

a Delaware limited liability company
	
 

	
 
	
 
	
 
	
 

	
By:
	
 
	
PRISA LHC, LLC,

a Delaware limited liability company
	
 

	
Its:
	
 
	
Sole Member
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 
	
/s/ Kristin Paul
	
 

	
 
	
 
	
Name:
	
 
	
Kristin Paul
	
 

	
 
	
 
	
Title:
	
 
	
Vice President
	
 

	
 
	
 
	
Dated:
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
ATARA:
	
 

	
 
	
 
	
 
	
 

	
ATARA BIOTHERAPEUTICS, INC.,

a Delaware corporation
	
 

	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ John McGrath
	

	
Name:
	
 
	
John McGrath

	
Title:
	
 
	
CFO

	
Dated:
	
 
	
5/13/16

	
 
	
 
	
 
	
 

	
INTREXON:
	
 

	
 
	
 
	
 
	
 

	
INTREXON CORPORATION,

a Virginia corporation
	
 

	
 
	
 
	
 
	
 

	
By:
	
 
	
/s/ Rick Sterling
	
 

	
Name:
	
 
	
Rick Sterling
	
 

	
Title:
	
 
	
CFO
	
 

	
Dated:
	
 
	
5/14/14
	
 

 

 

 

4

 

 

EXHIBIT A - ATARA SUBLEASE AGREEMENT

 

attached to and made a part of the Consent Agreement dated as of May 13, 2016

between PR 701 GATEWAY, LLC, a Delaware limited liability company,

ATARA BIOTHERAPEUTICS, INC., a Delaware corporation, and

INTREXON CORPORATION, a Virginia corporation

 

(see attached)

 

 

 

	
 
	
 
	
 
	

	
 

	
 
	
A-1
	
Initials

 

 

SUBLEASE AGREEMENT

This Sublease Agreement (this “Sublease”), made as of the 21st day of April 2016, by and between ATARA BIOTHERAPEUTICS, INC., a Delaware corporation, having a mailing address at 611 Gateway Boulevard, Suite 900, South San Francisco, California 94080 (“Sublandlord”), and, INTREXON CORPRORATION, a Virginia corporation, having a mailing address at 20374 Seneca Meadows Parkway, Germantown, Maryland 20876 (hereinafter referred to as “Subtenant”);

W I T N E S S E T H:

WHEREAS, PR 701 Gateway, LLC (as successor in interest to DWF III Gateway, LLC), a Delaware limited Liability company (“Overlandlord”) and Accessia, Inc., a Virginia corporation (“Accessia”) were parties to that certain Office Lease dated as of November 13, 2012 (the “Accessia Lease”);

WHEREAS Accessia and Sublandlord entered into a Sublease Agreement dated as of September 11, 2014 (the “Original Sublease”), pursuant to which Accessia leased to Sublandlord 7,038 rentable square feet identified as Suite 200 (the “Premises”) and located in the building identified as 701 Gateway Boulevard in South San Francisco, California (the “Building”);

WHEREAS, Overlandlord and Accessia entered into a Termination Agreement (the “Termination Agreement”) pursuant to which the Accessia Lease was terminated as of June 1,2015 (the “Accessia Lease Termination Date”); 

WHEREAS, in connection with the Termination Agreement, Overlandlord and Sublandlord entered into an Attornment Agreement dated as of June 9 2015 (the “Attornment Agreement”), pursuant to which the Original Sublease continued as a direct sublease between Overlandlord and Sublandlord and provides that, as of the Accessia Lease Termination Date, Overlandlord succeeded to Accessia’s interest in the Original Sublease, and Sublandlord attorned to Overlandlord as sublandlord under the Original Sublease upon the covenants, terms, and conditions set forth in the Attornment Agreement. Hereinafter, the Original Sublease (and the terms of the Accessia Lease incorporated therein by reference) shall be referred to herein in as the “Overlease” and is attached hereto as Exhibit C; and

WHEREAS, Subtenant now desires to sublet the Premises from Sublandlord upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, the parties hereto, for themselves, their successors and assigns, mutually covenant and agree as follows:

1.     Capitalized Terms. Any capitalized terms not otherwise defined in this Sublease shall have the meanings ascribed thereto in the Overlease.

2.     Demise. Sublandlord does hereby sublease to Subtenant, and Subtenant does hereby sublease from Sublandlord, upon and subject to the terms and conditions of this Sublease and all zoning ordinances, and easements, restrictions and conditions of record, the entirely of the Premises, as more particularly delineated on the plan attached hereto as Exhibit A and made part hereof (the “Subleased Premises”), together with the right to use the common areas and facilities in the Building made available to Sublandlord under the Overlease in accordance with the terms of the Overlease. Pursuant to the terms and provisions of the Overlease, the Subleased Premises shall be used for general office and uses incident thereto, and for no other use or purpose.

3.     Term and Extension Options.

(a)     The term of this Sublease shall commence on the date on which Landlord makes the Subleased Premises available for occupancy by Subtenant hereunder, which is targeted for May 1, 2016; provided, however, that the term of this Sublease shall not commence prior to the date that Overlandlord consents to this Sublease in writing (the “Term Commencement Date”). Promptly after the Term Commencement Date is determined, Sublandlord and Subtenant shall execute so acknowledgement thereof in the form attached hereto as Exhibit B. The term of this Sublease shall end on January 31, 2017, or such earlier date upon which said term may expire or be terminated pursuant to any of the conditions or limitations or other provisions of this Sublease, or pursuant to law (which date for the termination of the term hereof shall hereafter be called the “Termination Date”).

4.     Condition of the Subleased Premises. Subtenant represents that it has thoroughly examined the Subleased Premises and that, subject to the terms of this Sublease, the same are accepted by Subtenant in their “as is”, “where is" condition existing on the date of this Sublease; provided however, that the Subleased Premises shall be delivered to Subtenant in “broom clean” free of all debris and personal property other than the Furniture (defined below in Paragraph 14). Except as explicitly set forth in this Sublease, Sublandlord has made no representations, warranties or undertakings as to the present or future condition of the Subleased Premises or the fitness 

 

 

 

and availability of the Subleased Premises for any particular use. The acceptance of the Subleased Premises by Subtenant shall constitute an acknowledgement by Subtenant that the Subleased Premises are in the condition they are required to be in by this Sublease.

5.     Rent. Subtenant shall pay from and after the Term Commencement Date to Sublandlord, Rent in the amount of $211,140 per annum ($30.00 per rentable square foot per annum) in equal monthly installments of $17,595 in advance on the first (1st) day of each calendar month during the term of this Sublease. The Rent due hereunder shall be pro rated on a per diem basis for any partial calendar month at the beginning or end of the term of this Sublease. Simultaneously with the execution of this Sublease, Subtenant shall pay the Rent with respect to the Subleased Premises for the first full month of the term hereof ($17,595). The Rent paid hereunder shall be on a gross basis and, except as explicitly set forth herein to the contrary, Subtenant shall not be required to make additional payment to Sublandlord for taxes or operating expenses under this Sublease.

6.     Utilities and Other Charges. In addition to the Rent, Subtenant shall be responsible for reimbursing Sublandlord for all utilities and maintenance charges (collectively, the “Utility Costs") that are charged by Overlandlord to Sublandlord pursuant to the Overlease. Sublandlord shall provide Subtenant with a monthly invoice of such charges and Subtenant shall make payment in full of such amounts within ten (10) business days of receiving such invoice.

7.     Security Deposit. Simultaneously with the execution of this Sublease, Subtenant shall deposit with Sublandlord a cash security deposit in the amount of $17,595.00 to be held by Sublandlord to secure, in part, Subtenant's obligations under this Sublease. Sublandlord shall have the right from time to time, without prejudice to any other remedy Sublandlord may have on account thereof, to apply such Security Deposit, or any part thereof, to Sublandlord’s damages arising from, or to cute, a default by Subtenant under this Sublease. Sublandlord shall return any Security Deposit then held by Sublandlord, or so much thereof as shall not have theretofore been applied in accordance with the terms of this paragraph, to Subtenant upon the expiration or earlier termination of the Term of this Sublease and surrender of possession of the Subleased Premises by Subtenant to Sublandlord as required by this Sublease; provided, that if there is then-existing a default hereunder (or any circumstance which, with the passage of time or the giving of notice, or both, would constitute a default hereunder), Sublandlord shall retain a portion of the Security Deposit reasonably necessary to cure such default and shall return the remainder of the Security Deposit to Subtenant; provided that such retained portion will be returned to Subtenant if (a) such retained portion is not applied to cure such default by Sublandlord, (b) the amount applied to such cure is less than the retained portion, and (c) such default does not materialize within thirty (30) days after the expiration or earlier termination of this Sublease. While Sublandlord holds such deposit, Sublandlord shall have no obligation to pay interest on the same and shall have the right to commingle the same with Sublandlord’s other funds. lf Sublandlord conveys Sublandlord's interest under this Sublease, the deposit, or any part thereof not previously applied, shall be turned over by Sublandlord to Sublandlord's grantee, and, if so turned over, Subtenant agrees to look solely to such grantee for proper application of the Security Deposit in accordance with the terms of this paragraph, and the return thereof in accordance herewith.

8.     Insurance. Subtenant shall obtain and maintain with respect to the Subleased Premises the insurance specified in Section 2.07 of the Overlease to be obtained and maintained by Sublandlord, as lessee in amounts not less than those specified in the Overlease. except as specified below, such modifications only being effective with written consent of Overlandlord:

a.     Subtenant’s commercial general liability policy shall not be required to include owned and non-owned automobile liability so long as this requirement under the Overlease shall be maintained in the Business Auto Liability policy.

b.     Subtenant’s commercial general liability policy shall not be required to include cross liability endorsements.

c.     Under the Overlease Section 16.1, with respect to the Subtenant in each case shall carry a designation in "Best's Insurance Reports" as issued from time to time throughout the term as follows: Policyholders' rating of no less than an A-; financial rating of not less than VII.

d.     Under the Overlease Section 16.1 (c), with respect to the Subtenant, Subtenant shall endeavor to notify Sublandlord and Overlandlord in writing at least thirty (30) days prior to any cancellation or expiration of such policy, or any reduction in the amounts of insurance carried.

In addition, Subtenant shall maintain Special Form Property insurance covering Subtenant’s personal property, fixtures, equipment, the Furniture and any alterations or improvements performed by or on behalf of Subtenant on the Subleased Premises in amounts at least equal to the full replacement costs thereof. All such policies of insurance shall name Overlandlord and Sublandlord as additional insureds thereunder. Subtenant's insurance shall be primary over Overlandlord's and Sublandlord's insurance with respect to the Subleased Premises.

 

 

 

9.     Indemnification of Overlandlord and Sublandlord. Notwithstanding any other provision of this Sublease or the Overlease to the contrary, Subtenant will defend, save Overlandlord and Sublandlord harmless, and will exonerate and indemnify Overlandlord and Sublandlord, from and against any and all claims, liabilities or penalties asserted by or on behalf of any person, firm, corporation or public authority (except to the extent caused by the negligence or willful misconduct of Sublandlord or Overlandlord or their respective employees, agents and invitees):

(a)     On account of or based upon any injury to person, or loss of or damage to property sustained or occurring on the Subleased Premises on account of or based upon the act, omission, fault, negligence or misconduct of any person whomsoever (other than Overlandlord and Sublandlord or their respective agents, contractors or employees);

(b)     On account of or based upon any injury to person or loss of or damage to property, sustained or occurring elsewhere (other than on the Subleased Premises)in or about the Building (and, in particular, without limiting the generality of the foregoing on or about the elevators, stairways, public corridors, sidewalks, concourses, arcades, malls, galleries, vehicular tunnels, approaches, areaways, roof, or other appurtenances and facilities used in connection with the Building or the Premises) arising out of the negligent act or omission or willful misconduct of Subtenant, its agents, employees or invitees: and

(c)     On account of or based upon (including monies due on account of) any work or thing whatsoever done (other than by Overlandlord or Sublandlord or their respective contractors, agents or employees of either) on the Subleased Premises during the term of this Sublease and during the period of time, if any, prior to the Term Commencement Date that Subtenant may have been given access to the Subleased Premises.

If either of Overlandlord or Sublandlord shall, without fault on its part, be made a party to any litigation commenced by or against Subtenant, then Subtenant shall protect, indemnify and hold Overlandlord or Sublandlord harmless and shall pay all costs, expenses and reasonable legal fees incurred or paid by Overlandlord or Sublandlord in connection with such litigation. In any legal action brought to enforce the terms, covenants and conditions in this Sublease, the nonprevailing party (as determined by the court) shall pay all costs, expenses and reasonable legal fees of the prevailing party. 

Subtenant shall neither do nor permit anything to be done by persons under Subtenant’s control anything which would cause a default under the Overlease, or termination or forfeiture by reason of any right of termination or forfeiture, reserved or vested in Overlandlord under the Overlease, and Subtenant shall indemnify and hold Sublandlord harmless from and against all claims of any kind whatsoever by reason of breach or default on the part of Subtenant, or termination or forfeiture which is the consequence of any such breach or default

10.     Terms of Overlease. Except as expressly otherwise provided in this Sublease, including, without limitation. Paragraph 14 below, as between the parties hereto, all of the terms, provisions, covenants and conditions of the Overlease are incorporated herein by reference and hereby made a part of this Sublease. For purposes of such incorporation by reference, all references 10 Landlord and Tenant in the Overlease shall be deemed references to Sublandlord and Subtenant, all references to the Premises in the Overlease shall be deemed references to the Sublease Premises and all references to the term of the Overlease shall be deemed references to the term of this Sublease. Subtenant shall be entitled to the same notice and cure periods, less three (3) business days, as Sublandlord is afforded pursuant to the Overlease, provided that if a notice and/or cure period under the Overlease did not simultaneously commence, the notice and cure period shall be as set forth in the Overlease. Notwithstanding the foregoing, under no circumstances shall Subtenant’s notice and cure period hereunder be less than one (1) business day. Sublandlord shall have all of the rights of Overlandlord under the Overlease as against Subtenant and as between the parties hereto, Subtenant covenants and agrees (a) to perform and observe all of the agreements, covenants, terms and conditions of the Overlease with respect to the Subleased Premises (and the Building and Common Areas, to the extent applicable) arising on or after the Term Commencement Date and relating to the periods after the date thereof to the extent that the same are not modified or amended by this Sublease, and (b) that it shall not do or suffer or permit anything to be done which would constitute a default under the Overlease, and (c) that notwithstanding any other provision of this Sublease to the contrary, any act or omission by Subtenant which constitutes a default under the Overlease with respect to the Premises shall also constitute a default hereunder.

11.     Overlandlord’s Services and Obligations under the Overlease. Except as expressly provided in this Sublease, Subtenant agrees that Sublandlord shall not be obligated to furnish for Subtenant any services required to be provided by Overlandlord pursuant to the Overlease, all of which shall be provided by Overlandlord. If Overlandlord shall fail to perform its obligations under the Overlease and such failure materially interferes with Subtenant’s occupancy or its rights hereunder, Sublandlord shall, upon written request of Subtenant, make reasonable efforts (at no cost or expense to Sublandlord unless Subtenant first agrees to reimburse Sublandlord in full for all such reasonable costs and expenses) to enforce the obligations of Overlandlord, including promptly notifying Overlandlord of its nonperformance under the Overlease and requesting that Overlandlord perform its obligation under the Overlease. Sublandlord and Subtenant acknowledge and agree that Subtenant, at Subtenant’s sole cost and expense, shall maintain all laboratory specific mechanical equipment serving the Subleased Premises during the term of this Sublease.

 

 

 

12.     Subtenant Alterations and Improvements. Notwithstanding the terms of the Overlease governing alterations, Subtenant shall not have the right to make any alterations to the Subleased Premises. 

13.     Certain Provisions Not Incorporated.

(a)     The following provisions of the Accessia Lease are expressly not incorporated into this Sublease: Articles 4, 5, 6, 8, 12, 20 and 21 and Exhibits C (Work Letter), D (Acknowledgment of Lease Commencement), F (Option to Extend) and G (Guaranty).

(b)     The following provisions of the Original Sublease are expressly not incorporated into this Sublease: Sections 2.02, 2.03, 2.06, 2.11, 2.13, 2.17 and 2.24, and Exhibits A (Description of Premises) and B (List of Furniture and Equipment).

Subtenant acknowledges that, except for the redacted portions thereof, it has reviewed the Accessia Lease and the Original Sublease attached hereto and made a part hereof as Exhibit C, and that it is familiar with the contents thereof.

14.     Furniture.

During the term of this Sublease, Subtenant shall have, at no additional cost or charge payable by Subtenant hereunder, the exclusive license to use the furniture belonging to Overlandlord and located within the Subleased Premises as of the Term Commencement Date (the “Furniture”),·in its “as is” “where is” condition and “with all faults,” in connection with Subtenant’s business at the Subleased Premises. Upon the termination or expiration of this Sublease, Subtenant shall purchase the Furniture from Overlandlord for $1.00 and shall remove the Furniture from the Subleased Premises.

15.     Assigning and subletting. Notwithstanding anything to the contrary in Section 2.17 of the Overlease, Subtenant covenants and agrees that neither this Sublease nor the term hereof and leasehold hereby granted, nor any interest herein or therein, will be assigned, mortgaged, pledged, encumbered or otherwise transferred, voluntarily, by operation of law or otherwise, and that neither the Premises, nor any part thereof will be encumbered in any manner by reason of any act or omission on the part of Subtenant.

16.     Notice. Any and all communications delivered hereunder shall be in writing and given or served in accordance with Section 2.21 of the Overlease, addressed as follows:

if to Overlandlord:

As provided in the Attornment Agreement.

if to Sublandlord:

Atara Biotherapeutics, Inc.

611 Gateway Boulevard, Suite 900

South San Francisco, California 94080

Attn: General Counsel

with a copy to:

Faber Daeufer & Itrato PC

890 Winter Street, Suite 315

Waltham, Massachusetts 02451

Attn: Brian M. Connelly

and if to Subtenant;

Intrexon Corporation

20374 Seneca Meadows Parkway

Germantown, Maryland 20876

Attn: Chief Legal Counsel

or to such other address and attention as any of the above shall notify the others in writing.

 

 

 

17.     Successors and Assigns. This Sublease and everything herein contained shall extend to and bind and inure to the benefit of Sublandlord and its successors and assigns and Subtenant and its heirs, executors, administrators and permitted successors and assigns. No rights shall inure to the benefit of any assignee, subtenant or occupant.

18.     Miscellaneous. Neither Sublandlord nor any agent or representative of Sublandlord has made or is making, and Subtenant in executing and delivering this Sublease is not relying upon, any warranties, representations, promises or statements whatsoever, except to the extent expressly set forth in this Sublease. All understandings and agreements, if any, heretofore had between the parties are merged into this Sublease, which alone fully and completely expresses the agreement of the parties. No surrender of possession of the Subleased Premises or of any part thereof or of any remainder of the term of this Sublease shall release Subtenant from any of its obligations hereunder unless accepted by Sublandlord In writing. The receipt and retention by Sublandlord of Base Rent or Additional Rent from anyone other than Subtenant shall not be deemed a waiver of the breach by Subtenant of any covenant, agreement, term or provision of this Sublease, or as the acceptance of such other person as a tenant, or as a release of Subtenant from the covenants, agreements, terms, provisions and conditions herein contained. The receipt and retention by Sublandlord of Base Rent or Additional Rent with knowledge of the breach of any covenant, agreement, term, provision or condition herein contained shall not be deemed a waiver of such breach. This Sublease shall be governed by, and construed in accordance with the laws of the State of California.

19.     Casualty and Condemnation. Notwithstanding anything to the Contrary contained in this Sublease or in the Overlease, Subtenant shall not have the right to terminate this Sublease as to all or any part of the Subleased Premises, or be entitled to an abatement Rent, or any other item of rental, by reason of a casualty or condemnation affecting the Subleased Premises or any appurtenant rights thereto unless Sublandlord is entitled to terminate the Overlease or is entitled to a corresponding abatement with respect to its corresponding obligation under the Overlease. If Sublandlord is entitled to terminate the Overlease for all or any portion of the Subleased Premises or on account of any damage to any appurtenant right thereto by reason of casualty or condemnation, Subtenant may terminate this Sublease as to any corresponding part of the Subleased Premises by written notice to Sublandlord given at least five (5) business days prior to the date(s) Sublandlord is required to give notice to Overlandlord of such termination under the terms of the Overlease.

20.     Overlandlord’s Consent. It is hereby acknowledged by Sublandlord and Subtenant that Overlandlord’s consent to this Sublease shall not create any contractual liability or duty on the part of Overlandlord or its agent to the Subtenant, and shall not in any manner increase, decrease or otherwise affect the rights and obligations of Overlandlord and Sublandlord, as the lessee under the Overlease, with respect to the Premises.

21.     Sublandlord’s Consent. Whenever Sublandlord's consent is required under this Sublease or any provision of the Overlease as incorporated by reference Sublandlord's rejection of a request made by Subtenant shall not be deemed unreasonable, in any case, if such rejection is based on Overlandlord's rejection of such request.

22.     Brokers. Sublandlord and Subtenant each hereby represent and warrant that it has not dealt with any broker other than Cornish & Carey Commercial d/b/a Newmark Cornish & Carey and Kidder Mathews in connection with this Sublease for the Subleased Premises, and Sublandlord shall pay any brokerage fees which shall be due in connection therewith pursuant to a separate agreement. Each party shall indemnify the other against any cost or liability resulting from the indemnifying party's breach of the foregoing representation and warranty.

23.     Place for payments. All payments required to be made by Subtenant herein shall be made to Sublandlord, at Sublandlord's office specified in Paragraph 16, by wired funds of Subtenant or electronic ACH transfers as directed by Sublandlord from time to time, or to such agent or agents of Sublandlord or at such other place as Sublandlord shall hereafter from time to time direct in writing.

24.     Termination of Overlease. In the event that the Overlease shall be cancelled or terminated, the term of this Sublease shall automatically terminate as of the date of such cancellation or termination of the Overlease and Sublandlord shall not be liable in any way or to any extent to Subtenant for such termination or cancellation or for any damages or losses incurred or claimed to be incurred by Subtenant as a result thereof.

25.     Sublandlord’s obligations.

(a)     Provided Subtenant is not in default hereunder beyond applicable notice and cure periods, Sublandlord hereby agrees (a) to make all payments of rent and other amounts required to be paid to Overlandlord under the Overlease, (b) to perform all other obligations Imposed upon it by the Overlease which are not assumed by Subtenant hereunder. Sublandlord has no obligation to perform any services for Subtenant.

 

 

 

(b)     Sublandlord hereby represents to Subtenant as of the date of this Sublease that to the best of its knowledge: (i) the Overlease is in full force and effect and, except as otherwise set forth herein, has not been modified or amended; (ii) Sublandlord has not received a notice from Overlandlord setting forth a Default under the Overlease, which Default remains uncured as of the date hereof; and (iii) the execution, delivery and performance of this Sublease has been duly and validly authorized by Sublandlord, and the person signing this Sublease on behalf at Sublandlord is duly authorized to execute this Sublease on behalf of Sublandlord.

26.     Surrender. At the expiration or earlier termination of the term of the Sublease Subtenant shall surrender the Subleased Premises to Sublandlord in the condition required under the Overlease including without limitation with respect to the provisions of the Overlease and the reports required thereunder.

[Remainder of page intentionally blank]

 

 

 

IN WITNESS WHEREOF, Sublandlord and Subtenant have duly executed this Sublease, as an instrument under seal, as of the day and year first above written.

 

	
SUBLANDLORD:

	
 

	
ATARA BIOTHERAPEUTICS, INC., a

Delaware corporation

	
 
	
 
	
 

	
By:
	
 
	
/s/ John McGrath

	
 
	
 
	
Name:
	
John McGrath

	
 
	
 
	
Title:
	
CFO

	
 
	
 
	

	
 

	
SUBTENANT:

	
 

	
INTREXON CORPORATION, a Virginia

	
corporation

	
 
	
 
	
 

	
By:
	
 
	
/s/ Robert F. Walsh III

	
 
	
 
	
Name:
	
Robert F. Walsh III

	
 
	
 
	
Title:
	
President, or IPD

	
 
	
 
	
 
	
 

	
 
	
 
	
 

	
By:
	
 
	
/s/ Rick Sterling

	
 
	
 
	
Name:
	
Rick Sterling

	
 
	
 
	
Title:
	
CFO

 

 

 

 

 

EXHIBIT A

SUBLEASED PREMISES

See attached.

 

 

 

 

 

EXHIBIT B

Sublease Term Commencement Date Acknowledgement

 

THIS SUBLEASE TERM COMMENCEMENT DATE ACKNOWLEDGEMENT (the “Acknowledgement”) is entered into as of            , 2016, by and between Atara Biotherapeutics. Inc. (“Sublandlord”), and IntrcxonCorporation (“Subtenant”);

W I T N E S S E T H:

WHEREAS, Sublandlord and Subtenant have entered into that certain Sublease Agreement dated as of           , 2016 (the “Sublease”), pursuant to which Subtenant has Subleased from Sublandlord certain premises referred to as Suite 200 located in the building located at 701 Gateway Boulevard, for a term ending on January 31, 2017.

 

WHEREAS, pursuant to the Sublease, Sublandlord and Subtenant have agreed to enter into this Acknowledgement to acknowledge the occurrence of the Term Commencement Date.

 

NOW, THEREFORE, the parties hereto, for themselves, their permitted successors and assigns, mutually covenant and agree that the Term Commencement Date under the Sublease is              , 2016.

[Signature page follows]

 

 

 

 

 

IN WITNESS WHEREOF, Sublandlord and Subtenant have duly executed this acknowledgement as of the day and year first above written.

 

	
SUBLANDLORD:

	
 

	
ATARA BIOTHERAPEUTICS, INC., a

	
Delaware corporation

	
 

	
By
	
 

	
Name: 
	
 

	
Title:

	
 

	
 

	
SUBTENANT:

	
 

	
INTREXON CORPORATION, a Virginia

	
Corporation

	
 

	
By
	
/s/ Rick Sterling

	
Name: 
	
Rick Sterling

	
Title: 
	
CFO

 

 

 

 

 

EXHIBIT C

OVERLEASE

[to be attached]atra-ex102_415.htm

 

Exhibit 10.2

ATARA BIOTHERAPEUTICS, INC.

2014 EQUITY INCENTIVE PLAN

First Amended and Restated:  May 28, 2014

Second Amended and Restated:  __________, 2016

Approved by the Stockholders:  __________, 2016

Effective Date:   __________, 2016

	
1.
	
General.

(a)Successor to and Continuation of Prior Plans.

(i)The Plan is the successor to and continuation of the Nina Biotherapeutics, Inc. 2012 Equity Incentive Plan, the Pinta Biotherapeutics, Inc. 2012 Equity Incentive Plan, and the Santa Maria Biotherapeutics 2012 Equity Incentive Plan, as amended (collectively, the “Prior Plans”).  From and after 12:01 a.m. Pacific time on the Original Effective Date, no additional stock awards will be granted under the Prior Plans.  All stock awards granted under the Prior Plans remain subject to the terms of the Prior Plans.  All Awards granted on or after 12:01 a.m. Pacific Time on the Original Effective Date are subject to the terms of this Plan.

(ii)Any shares that would otherwise remain available for future grants under any of the Prior Plans as of 12:01 a.m. Pacific Time on the Original Effective Date ceased to be available under the Prior Plans at such time.  Instead, that number of shares of Common Stock equal to the number of shares of the Company then available for future grants under the Prior Plans (the “Prior Plans’ Available Reserve”) was added to the Share Reserve (as further described in Section 3(a) below) and became immediately available for grants and issuance pursuant to Stock Awards under this Plan, up to the maximum number set forth in Section 3(a) below.

(iii)From and after 12:01 a.m. Pacific time on the Original Effective Date, a number of shares of Common Stock equal to the total number of shares of common stock subject to outstanding stock awards granted under the Prior Plans that (A) expire or terminate for any reason prior to exercise or settlement, (B) are forfeited because of the failure to meet a contingency or condition required to vest such shares or repurchased at the original issuance price, or (C) are otherwise reacquired or are withheld (or not issued) to satisfy a tax withholding obligation in connection with an award (the “Returning Shares”) will immediately be added to the Share Reserve (as further described in Section 3(a) below) as and when such shares become Returning Shares (up to the maximum number set forth in Section 3(a)), and become available for issuance pursuant to Stock Awards granted hereunder.

(b)Eligible Award Recipients.  Employees, Directors and Consultants are eligible to receive Awards.

(c)Available Awards.  The Plan provides for the grant of the following Awards:  (i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) Stock Appreciation Rights; (iv) Restricted Stock Awards; (v) Restricted Stock Unit Awards; (vi) Performance Stock Awards; (vii) Performance Cash Awards; and (viii) Other Stock Awards.

(d)Purpose.  This Plan, through the granting of Awards, is intended to help the Company secure and retain the services of eligible award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and provide a means by which the eligible recipients may benefit from increases in value of the Common Stock.

	
2.
	
Administration.

(a)Administration by Board.  The Board will administer the Plan.  The Board may delegate administration of the Plan to a Committee or Committees, as provided in Section 2(c).

(b)Powers of Board.  The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:

(i)To determine:  (A) who will be granted Awards; (B) when and how each Award will be granted; (C) what type of Award will be granted; (D) the provisions of each Award (which need not be identical), including when a person will be permitted to exercise or otherwise receive cash or Common Stock under the Award; (E) the number of shares of Common Stock subject to, or the cash value of, an Award; and (F) the Fair Market Value applicable to a Stock Award.

 

 

(ii)To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for administration of the Plan and Awards.  The Board, in the exercise of these powers, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement or in the written terms of a Performance Cash Award, in a manner and to the extent it will deem necessary or expedient to make the Plan or Award fully effective. 

(iii)To settle all controversies regarding the Plan and Awards granted under it.

(iv)To accelerate, in whole or in part, the time at which an Award may be exercised or vest (or at which cash or shares of Common Stock may be issued).

(v)To suspend or terminate the Plan at any time.  Except as otherwise provided in the Plan or an Award Agreement, suspension or termination of the Plan will not materially impair a Participant’s rights under his or her then-outstanding Award without his or her written consent except as provided in subsection (viii) below.

(vi)To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, adopting amendments relating to Incentive Stock Options and nonqualified deferred compensation under Section 409A of the Code and/or making the Plan or Awards granted under the Plan exempt from or compliant with the requirements for Incentive Stock Options or exempt from or compliant with the requirements for nonqualified deferred compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law.  If required by applicable law or listing requirements, and except as provided in Section 9(a) relating to Capitalization Adjustments, the Company will seek stockholder approval of any amendment of the Plan that (A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class of individuals eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to Participants under the Plan, (D) materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (E) materially extends the term of the Plan, or (F) materially expands the types of Awards available for issuance under the Plan.  Except as otherwise provided in the Plan (including subsection (viii) below) or an Award Agreement, no amendment of the Plan will materially impair a Participant’s rights under an outstanding Award without the Participant’s written consent.

(vii)To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of (A) Section 162(m) of the Code regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to Covered Employees, (B) Section 422 of the Code regarding “incentive stock options” or (C) Rule 16b-3 of Exchange Act or any successor rule.

(viii)To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more outstanding Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion.  A Participant’s rights under any Award will not be impaired by any such amendment unless the Company requests the consent of the affected Participant, and the Participant consents in writing.  However, a Participant’s rights will not be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights.  In addition, subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without the affected Participant’s consent (A) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (B) to change the terms of an Incentive Stock Option, if such change results in impairment of the Award solely because it impairs the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code, (C) to clarify the manner of exemption from, or to bring the Award into compliance with, Section 409A of the Code, or (D) to comply with other applicable laws or listing requirements.

(ix)Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan and/or Award Agreements.

(x)To adopt such procedures and sub-plans as are necessary or appropriate (A) to permit or facilitate participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United States or (B) allow Awards to qualify for special tax treatment in a foreign jurisdiction; provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement that are required for compliance with the laws of the relevant foreign jurisdiction.

 

 

(xi)To effect, with the consent of any adversely affected Participant, (A) the reduction of the exercise, purchase or strike price of any outstanding Stock Award; (B) the cancellation of any outstanding Stock Award and the grant in substitution therefore of a new (1) Option or SAR, (2) Restricted Stock Award, (3) Restricted Stock Unit Award, (4) Other Stock Award, (5) cash award and/or (6) award of other valuable consideration determined by the Board, in its sole discretion, with any such substituted award (x) covering the same or a different number of shares of Common Stock as the cancelled Stock Award and (y) granted under the Plan or another equity or compensatory plan of the Company; or (C) any other action that is treated as a repricing under generally accepted accounting principles. 

(c)Delegation to Committee.

(i)General.  The Board may delegate some or all of the administration of the Plan to a Committee or Committees.  If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee).  Any delegation of administrative powers will be reflected in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Board or Committee (as applicable).  The Committee may, at any time, abolish the subcommittee and/or revest in the Committee any powers delegated to the subcommittee.  The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.

(ii)Section 162(m) and Rule 16b-3 Compliance.  The Committee may consist solely of two or more Outside Directors, in accordance with Section 162(m) of the Code, or solely of two or more Non-Employee Directors, in accordance with Rule 16b-3 of the Exchange Act.

(d)Delegation to an Officer.  The Board may delegate to one (1) or more Officers the authority to do one or both of the following:  (i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by applicable law, other Stock Awards) and, to the extent permitted by applicable law, the terms of such Awards; and (ii) determine the number of shares of Common Stock to be subject to such Stock Awards granted to such Employees; provided, however, that the Board resolutions regarding such delegation will specify the total number of shares of Common Stock that may be subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself.  Any such Stock Awards will be granted on the form of Stock Award Agreement most recently approved for use by the Committee or the Board, unless otherwise provided for in the resolutions approving the delegation authority.  The Board may not delegate authority to an Officer who is acting solely in the capacity of an Officer (and not also as a Director) to determine the Fair Market Value (as defined below).

(e)Effect of Board’s Decision.  All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

	
3.
	
Shares Subject to the Plan. 

(a)Share Reserve.

(i)Subject to Section 9(a) relating to Capitalization Adjustments and the “evergreen” provision in Section 3(a)(ii), the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards from and after the Effective Date will not exceed 10,858,902 shares (the “Share Reserve”).  The Share Reserve includes (A) 4,000,000 new shares, (B) the 5,971,408 shares that represented the Prior Plans’ Available Reserve and the shares reserved for issuance immediately prior to the Effective Date, and (C) the Returning Shares, if any, in an amount not to exceed 887,494 shares (if and when the Returning Shares ever become available for grant under this Plan).

(ii)The Share Reserve will automatically increase on January 1st of each year, for a period of not more than ten years, commencing on January 1st of the year following the year in which the IPO Date occurs and ending on (and including) January 1, 2024, in an amount equal to 5% of the total number of shares of Company capital stock outstanding on December 31st of the preceding calendar year.  Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence.

(iii)For clarity, the Share Reserve is a limitation on the number of shares of Common Stock that may be issued under to the Plan.  As a single share may be subject to grant more than once (e.g., if a share subject to a Stock Award is forfeited, it may be made subject to grant again as provided in Section 3(b) below), the Share Reserve is not a limit on the number of Stock Awards that can be granted.

 

 

(iv)Shares may be issued under the terms of this Plan in connection with a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c), NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan. 

(b)Reversion of Shares to the Share Reserve.  If a Stock Award or any portion of a Stock Award (i) expires or otherwise terminates without all of the shares covered by the Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of shares of Common Stock that are available for issuance under the Plan.  If any shares of Common Stock issued under a Stock Award are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required to vest such shares in the Participant, then the shares that are forfeited or repurchased will revert to and again become available for issuance under the Plan.  Any shares reacquired by the Company in satisfaction of tax withholding obligations on a Stock Award or as consideration for the exercise or purchase price of a Stock Award will again become available for issuance under the Plan.

(c)Incentive Stock Option Limit.  Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued on the exercise of Incentive Stock Options will be 11,538,461 shares of Common Stock.

(d)Section 162(m) Limitations.  Subject to the provisions of Section 9(a) relating to Capitalization Adjustments, at such time as the Company may be subject to the applicable provisions of Section 162(m) of the Code, the following limitations shall apply.

(i)A maximum of 1,538,461 shares of Common Stock subject to Options, SARs and Other Stock Awards whose value is determined by reference to an increase over an exercise or strike price of at least 100% of the Fair Market Value on the date the Stock Award is granted may be granted to any one Participant during any one calendar year.  Notwithstanding the foregoing, if any additional Options, SARs or Other Stock Awards whose value is determined by reference to an increase over an exercise or strike price of at least 100% of the Fair Market Value on the date the Stock Award are granted to any Participant during any calendar year, compensation attributable to the exercise of such additional Stock Awards will not satisfy the requirements to be considered “qualified performance-based compensation” under Section 162(m) of the Code unless such additional Stock Award is approved by the Company’s stockholders.

(ii)A maximum of 1,538,461 shares of Common Stock subject to Performance Stock Awards may be granted to any one Participant during any one calendar year (whether the grant, vesting or exercise is contingent upon the attainment during the Performance Period of the Performance Goals).

(iii)A maximum of $2,000,000 may be granted as a Performance Cash Award to any one Participant during any one calendar year.

(e)Source of Shares.  The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.

(f)Director Limitations.  The maximum total value of Awards granted during a single fiscal year to any non-employee director under the Plan and under any other Company equity plan, taken together with any cash fees paid to such non-employee director during the fiscal year, shall not exceed $1,500,000 (calculating the value of any such awards based on the grant date fair value of such awards for financial reporting purposes and excluding, for this purpose, the value of any dividend equivalent payments paid pursuant to any award granted in a previous fiscal year).

	
4.
	
Eligibility.

(a)Eligibility for Specific Stock Awards.  Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code).  Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants; provided, however, that Stock Awards may not be granted to Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405 of the Securities Act, unless (i) the stock underlying such Stock Awards is treated as “service recipient stock” under Section 409A of the Code (for example, because the Stock Awards are granted pursuant to a corporate transaction such as a spin off transaction), or (ii) the Company, in consultation with its legal counsel, has determined that such Stock Awards are otherwise exempt from or comply with the distribution requirements of Section 409A of the Code.

 

 

(b)Ten Percent Stockholders.  A Ten Percent Stockholder will not be granted an Incentive Stock Option unless the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant. 

	
5.
	
Provisions Relating to Options and Stock Appreciation Rights.

Each Option or SAR will be in such form and will contain such terms and conditions as the Board deems appropriate.  All Options will be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option.  If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive Stock Option under the applicable rules, then the Option (or portion thereof) will be a Nonstatutory Stock Option.  The provisions of separate Options or SARs need not be identical; provided, however, that each Award Agreement will conform to (through incorporation of provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following provisions:

(a)Term.  Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of 10 years from the date of its grant or such shorter period specified in the Award Agreement.

(b)Exercise Price.  Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will be not less than 100% of the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Award is granted.  Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value of the Common Stock subject to the Award if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code.  Each SAR will be denominated in shares of Common Stock equivalents.

(c)Purchase Price for Options.  The purchase price of Common Stock acquired pursuant to the exercise of an Option may be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below.  The Board will have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to use a particular method of payment.  The permitted methods of payment are as follows:

(i)by cash, check, bank draft or money order payable to the Company;

(ii)pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;

(iii)by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;

(iv)if an Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company will accept cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued.  Shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or

(v)in any other form of legal consideration that may be acceptable to the Board and specified in the applicable Award Agreement.

 

 

(d)Exercise and Payment of a SAR.  To exercise any outstanding SAR, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such SAR.  The appreciation distribution payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock equal to the number of Common Stock equivalents in which the Participant is vested under such SAR (with respect to which the Participant is exercising the SAR on such date), over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the Participant is exercising the SAR on such date.  The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Award Agreement evidencing such SAR. 

(e)Transferability of Options and SARs.  The Board may, in its sole discretion, impose such limitations on the transferability of Options and SARs as the Board will determine.  In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options and SARs will apply:

(i)Restrictions on Transfer.  An Option or SAR will not be transferable except by will or by the laws of descent and distribution (or pursuant to subsections (ii) and (iii) below), and will be exercisable during the lifetime of the Participant only by the Participant.  The Board may permit transfer of the Option or SAR in a manner that is not prohibited by applicable tax and securities laws.  Except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration.

(ii)Domestic Relations Orders.  Subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by U.S. Treasury Regulation 1.421-1(b)(2).  If an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

(iii)Beneficiary Designation.  Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering written notice to the Company, in a form approved by the Company (or the designated broker), designate a third party who, on the death of the Participant, will thereafter be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise.  In the absence of such a designation, the executor or administrator of the Participant’s estate will be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise.  However, the Company may prohibit designation of a beneficiary at any time, including due to any conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.

(f)Vesting Generally.  The total number of shares of Common Stock subject to an Option or SAR may vest and therefore become exercisable in periodic installments that may or may not be equal.  The Option or SAR may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction of Performance Goals or other criteria) as the Board may deem appropriate.  The vesting provisions of individual Options or SARs may vary.  The provisions of this Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common Stock as to which an Option or SAR may be exercised.

(g)Termination of Continuous Service.  Except as otherwise provided in the applicable Award Agreement, or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Award as of the date of termination of Continuous Service) within the period of time ending on the earlier of (i) the date three (3) months following the termination of the Participant’s Continuous Service and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement.  If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR will terminate.

(h)Extension of Termination Date.  Except as otherwise provided in the applicable Award Agreement, if the exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option or SAR will terminate on the earlier of (i) the expiration of a total period of three (3) months (that need not be consecutive) after the termination of the Participant’s Continuous Service during which the exercise of the Option or SAR would not be in violation of such registration requirements, and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement.  In addition, unless otherwise provided in a Participant’s applicable Award Agreement, if the sale of any Common Stock received upon exercise of an Option or SAR following the termination of the Participant’s Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option or SAR will terminate on the earlier of (i) the expiration of a period of months (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement.

 

 

(i)Disability of Participant.  Except as otherwise provided in the applicable Award Agreement, or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date 12 months following such termination of Continuous Service, and (ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement.  If, after termination of Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR (as applicable) will terminate. 

(j)Death of Participant.  Except as otherwise provided in the applicable Award Agreement, or other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the applicable Award Agreement for exercisability after the termination of the Participant’s Continuous Service (for a reason other than death), then the Option or SAR may be exercised (to the extent the Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or inheritance or by a person designated to exercise the Option or SAR upon the Participant’s death, but only within the period ending on the earlier of (i) the date 18 months following the date of death, and (ii) the expiration of the term of such Option or SAR as set forth in the applicable Award Agreement.  If, after the Participant’s death, the Option or SAR is not exercised within the applicable time frame, the Option or SAR will terminate.

(k)Termination for Cause.  Except as explicitly provided otherwise in a Participant’s Award Agreement or other individual written agreement between the Company or any Affiliate and the Participant, if a Participant’s Continuous Service is terminated for Cause, the Option or SAR will terminate upon the date on which the event giving rise to the termination for Cause first occurred, and the Participant will be prohibited from exercising his or her Option or SAR from and after the date on which the event giving rise to the termination for Cause first occurred (or, if required by law, the date of termination of Continuous Service).  If a Participant’s Continuous Service is suspended pending an investigation of the existence of Cause, all of the Participant’s rights under the Option or SAR will also be suspended during the investigation period.

(l)Non-Exempt Employees.  If an Option or SAR is granted to an Employee who is a non-exempt employee for purposes of the U.S. Fair Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable for any shares of Common Stock until at least 6 months following the date of grant of the Option or SAR (although the Award may vest prior to such date).  Consistent with the provisions of the U.S. Worker Economic Opportunity Act, (i) if such non-exempt Employee dies or suffers a Disability, (ii) upon a Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii) upon a Change in Control, or (iv) upon the non-exempt Employee’s retirement (as such term may be defined in the non-exempt Employee’s applicable Award Agreement, in another agreement between the non-exempt Employee and the Company, or, if no such definition, in accordance with the Company’s then current employment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier than 6 months following the date of grant.  The foregoing provision is intended to operate so that any income derived by a non-exempt Employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay.  To the extent permitted and/or required for compliance with the U.S. Worker Economic Opportunity Act to ensure that any income derived by a non-exempt Employee in connection with the exercise, vesting or issuance of any shares under any other Stock Award will be exempt from such employee’s regular rate of pay, the provisions of this paragraph will apply to all Stock Awards and are hereby incorporated by reference into such Stock Award Agreements.

	
6.
	
Provisions of Stock Awards Other than Options and SARs.

(a)Restricted Stock Awards.  Each Restricted Stock Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate.  To the extent consistent with the Company’s bylaws, at the Board’s election, shares of Common Stock may be (x) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse, or (y) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board.  The terms and conditions of Restricted Stock Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Award Agreements need not be identical.  Each Restricted Stock Award Agreement will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

(i)Consideration.  A Restricted Stock Award may be awarded in consideration for (A) cash, check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of legal consideration (including future services) that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

(ii)Vesting.  Shares of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board.

 

 

(iii)Termination of Participant’s Continuous Service.  If a Participant’s Continuous Service terminates, the Company may receive through a forfeiture condition or a repurchase right, any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement. 

(iv)Transferability.  Rights to acquire shares of Common Stock under the Restricted Stock Award Agreement will be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board will determine in its sole discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement.

(v)Dividends.  A Restricted Stock Award Agreement may provide that any dividends paid on Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they relate.

(b)Restricted Stock Unit Awards.  Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate.  The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical.  Each Restricted Stock Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of each of the following provisions:

(i)Consideration.  At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award.  The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

(ii)Vesting.  At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.

(iii)Payment.  A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.

(iv)Additional Restrictions.  At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.

(v)Dividend Equivalents.  Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.  At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board.  Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they relate.

(vi)Termination of Participant’s Continuous Service.  Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.

(c)Performance Awards.

(i)Performance Stock Awards.  A Performance Stock Award is a Stock Award (covering a number of shares not in excess of that set forth in Section 3(d) above) that is payable (including that may be granted, vest or exercised) contingent upon the attainment during a Performance Period of certain Performance Goals.  A Performance Stock Award may, but need not, require the completion of a specified period of Continuous Service.  The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determined by the Committee (or, if not required for compliance with Section 162(m) of the Code, the Board), in its sole discretion.  In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board may determine that cash may be used in payment of Performance Stock Awards.

 

 

(ii)Performance Cash Awards.  A Performance Cash Award is a cash award (for a dollar value not in excess of that set forth in Section 3(d)(iii) above) that is payable contingent upon the attainment during a Performance Period of certain Performance Goals.  A Performance Cash Award may also require the completion of a specified period of Continuous Service.  At the time of grant of a Performance Cash Award, the length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determined by the Committee (or, if not required for compliance with Section 162(m) of the Code, the Board), in its sole discretion.  The Board may specify the form of payment of Performance Cash Awards, which may be cash or other property, or may provide for a Participant to have the option for his or her Performance Cash Award, or such portion thereof as the Board may specify, to be paid in whole or in part in cash or other property. 

(iii)Board Discretion.  The Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for a Performance Period.

(iv)Section 162(m) Compliance.  Unless otherwise permitted in compliance with the requirements of Section 162(m) of the Code with respect to an Award intended to qualify as “performance-based compensation” thereunder, the Committee will establish the Performance Goals applicable to, and the formula for calculating the amount payable under, the Award no later than the earlier of (A) the date 90 days after the commencement of the applicable Performance Period, and (B) the date on which 25% of the Performance Period has elapsed, and in any event at a time when the achievement of the applicable Performance Goals remains substantially uncertain.  Prior to the payment of any compensation under an Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee will certify in writing the extent to which any Performance Goals and any other material terms under such Award have been satisfied (other than in cases where such relate solely to the increase in the value of the Common Stock).  Notwithstanding satisfaction of any completion of any Performance Goals, the number of shares of Common Stock, Options, cash or other benefits granted, issued, retainable and/or vested under an Award on account of satisfaction of such Performance Goals may be reduced by the Committee on the basis of such further considerations as the Committee, in its sole discretion, will determine.

(d)Other Stock Awards.  Other forms of Stock Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value of the Common Stock at the time of grant) may be granted either alone or in addition to Stock Awards provided for under Section 5 and the preceding provisions of this Section 6.  Subject to the provisions of the Plan, the Board will have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock Awards and all other terms and conditions of such Other Stock Awards.

	
7.
	
Covenants of the Company.

(a)Availability of Shares.  The Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy then-outstanding Stock Awards.

(b)Securities Law Compliance.  The Company will seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award.  If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained.  A Participant will not be eligible for the grant of an Award or the subsequent issuance of cash or Common Stock pursuant to the Award if such grant or issuance would be in violation of any applicable securities law.

(c)No Obligation to Notify or Minimize Taxes.  The Company will have no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Stock Award.  Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised.  The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award.

 

 

	
8.
	
Miscellaneous. 

(a)Use of Proceeds from Sales of Common Stock.  Proceeds from the sale of shares of Common Stock pursuant to Stock Awards will constitute general funds of the Company.

(b)Corporate Action Constituting Grant of Awards.  Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant.  In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement as a result of a clerical error in the papering of the Award Agreement, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement.

(c)Stockholder Rights.  No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to a Stock Award unless and until (i) such Participant has satisfied all requirements for exercise of, or the issuance of shares of Common Stock under, the Stock Award pursuant to its terms, and (ii) the issuance of the Common Stock subject to such Stock Award has been entered into the books and records of the Company.

(d)No Employment or Other Service Rights.  Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, including, but not limited to, Cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

(e)Change in Time Commitment.  In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, the Board has the right in its sole discretion to (i) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award.  In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.

(f)Incentive Stock Option Limitations.  To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).

(g)Investment Assurances.  The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award, and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock.  The foregoing requirements, and any assurances given pursuant to such requirements, will be inoperative if (i) the issuance of the shares upon the exercise of a Stock Award or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or (ii) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws.  The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

 

 

(h)Withholding Obligations.  Unless prohibited by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any U.S. federal, state, local, foreign or other tax withholding obligation relating to an Award by any of the following means or by a combination of such means:  (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such other amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant, including proceeds from the sale of shares of Common Stock issued pursuant to a Stock Award; or (v) by such other method as may be set forth in the Award Agreement. 

(i)Electronic Delivery.  Any reference herein to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto), or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access).

(j)Deferrals.  To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants.  Deferrals by Participants will be made in accordance with Section 409A of the Code (to the extent applicable to a Participant).  Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an employee or otherwise providing services to the Company.  The Board is authorized to make deferrals of Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law.

(k)Compliance with Section 409A.  Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A of the Code.  If the Board determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement.  Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued or paid before the date that is six (6) months following the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six (6) month period elapses, with the balance paid thereafter on the original schedule.

(l)Clawback/Recovery.  All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law.  In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including, but not limited to, a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of Cause.  No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company or an Affiliate.

	
9.
	
Adjustments upon Changes in Common Stock; Other Corporate Events.

(a)Capitalization Adjustments.  In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust:  (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a); (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c); (iii) the class(es) and maximum number of securities that may be awarded to any person pursuant to Section 3(d) and (iv) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards.  The Board will make such adjustments, and its determination will be final, binding and conclusive.

 

 

(b)Dissolution or Liquidation.  Except as otherwise provided in the Stock Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service; provided, however, that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion. 

(c)Corporate Transaction.  The following provisions will apply to Stock Awards in the event of a Corporate Transaction unless otherwise provided in the instrument evidencing the Stock Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of a Stock Award.  In the event of a Corporate Transaction, then, notwithstanding any other provision of the Plan, the Board will take one or more of the following actions with respect to Stock Awards, contingent upon the closing or completion of the Corporate Transaction:

(i)arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or continue the Stock Award or to substitute a similar stock award for the Stock Award (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction);

(ii)arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company);

(iii)accelerate the vesting, in whole or in part, of the Stock Award (and, if applicable, the time at which the Stock Award may be exercised) to a date prior to the effective time of such Corporate Transaction as the Board will determine (or, if the Board will not determine such a date, to the date that is 5 days prior to the effective date of the Corporate Transaction), with such Stock Award terminating if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction;

(iv)arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to the Stock Award;

(v)cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not exercised prior to the effective time of the Corporate Transaction, in exchange for such cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; and

(vi)cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not exercised prior to the effective time of the Corporate Transaction, in exchange for a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the value of the property the Participant would have received upon the exercise of the Stock Award immediately prior to the effective time of the Corporate Transaction, over (B) any exercise price payable by such holder in connection with such exercise.

The Board need not take the same action or actions with respect to all Stock Awards or portions thereof or with respect to all Participants.  The Board may take different actions with respect to the vested and unvested portions of a Stock Award.

In the absence of any affirmative determination by the Board at the time of a Corporate Transaction, each outstanding Stock Award will be assumed or an equivalent Stock Award will be substituted by such successor corporation or a parent or subsidiary of such successor corporation (the “Successor Corporation”), unless the Successor Corporation does not agree to assume the Stock Award or to substitute an equivalent Stock Award, in which case such Stock Award will terminate upon the consummation of the transaction.

(d)Change in Control.  A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will occur.

 

 

	
10.
	
Termination or Suspension of the Plan. 

The Board may suspend or terminate the Plan at any time.  No Awards may be granted after March 31, 2024.  No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

	
11.
	
Effective Date of Plan; Timing of First Grant or Exercise.

The Plan came into existence on March 31, 2014 (the “Original Effective Date”).  The stockholders of the Company approved the Plan on June 2, 2014.  The Board approved the Plan, as amended and restated, as of April 26, 2016 (the “Effective Date”).  No Stock Award may be exercised (or, in the case of a Restricted Stock Award, Restricted Stock Unit Award, Performance Stock Award, or Other Stock Award, may be granted) and no Performance Cash Award may be settled, under the Plan, as amended and restated, unless and until the Plan, as amended and restated, has been approved by the stockholders of the Company, which approval will be within 12 months after the Effective Date; provided, however, that in the absence of such approval this Plan shall continue to operate as approved by the stockholders of the Company on June 2, 2014.

	
12.
	
Choice of Law.

The laws of the State of Delaware will govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.

	
13.
	
Definitions. 

As used in the Plan, the following definitions will apply to the capitalized terms indicated below:

(a)“Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company, as such terms are defined in Rule 405 of the Securities Act.  The Board will have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.

(b)“Award” means a Stock Award or a Performance Cash Award.

(c)“Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an Award.

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

(e)“Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Adoption Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other similar equity restructuring transaction, as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto).  Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

(f)“Cause” will have the meaning ascribed to such term in any written agreement between the Participant and the Company or any Affiliate defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events:  (i) Participant’s willful failure substantially to perform his or her duties and responsibilities to the Company or any Affiliate or deliberate violation of a policy of the Company or any Affiliate; (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to the Company or any Affiliate; (iii) unauthorized use or disclosure by Participant of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company or any Affiliate; or (iv) Participant’s willful breach of any of his or her obligations under any written agreement or covenant with the Company or any Affiliate.  The determination as to whether a Participant is being terminated for Cause will be made in good faith by the Company and will be final and binding on the Participant.  Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company, any Affiliate or such Participant for any other purpose.

 

 

(g)“Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events: 

(i)any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction.  Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed to occur;

(ii)there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;

(iii)there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or individuals who, on the Effective Date, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board;

(iv)provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member will, for purposes of this Plan, be considered as a member of the Incumbent Board.

Notwithstanding the foregoing definition or any other provision of this Plan, (A) the term Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant will supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition will apply.

If required for compliance with Section 409A of the Code, in no event will a Change in Control be deemed to have occurred if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under U.S. Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).  The Board may, in its sole discretion and without a Participant’s consent, amend the definition of “Change in Control” to conform to the definition of “Change in Control” under Section 409A of the Code, and the regulations thereunder.

(h)“Code” means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.

(i)“Committee” means a committee of one (1) or more Directors to whom authority has been delegated by the Board in accordance with Section 2(c).

(j)“Common Stock” means the common stock of the Company.

 

 

(k)“Company” means Atara Biotherapeutics, Inc., a Delaware corporation. 

(l)“Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services.  However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan.  Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of the Company’s securities to such person.

(m)“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated.  A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service.  For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service.  If the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board in its sole discretion, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate.  To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors.  In addition, if required for exemption from or compliance with Section 409A of the Code, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of “separation from service” as defined under U.S. Treasury Regulation Section 1.409A-1(h) (without regard to any alternative definition thereunder).  A leave of absence will be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.

(n)“Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i)a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;

(ii)a sale or other disposition of at least 90% of the outstanding securities of the Company;

(iii)a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or

(iv)a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

To the extent required for compliance with Section 409A of the Code, in no event will an event be deemed a Corporate Transaction if such transaction is not also a “change in the ownership or effective control of” the Company or “a change in the ownership of a substantial portion of the assets of” the Company as determined under U.S. Treasury Regulation Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).

(o)“Covered Employee” will have the meaning provided in Section 162(m)(3) of the Code.

(p)“Director” means a member of the Board.

(q)“Disability” means, with respect to a Participant, the inability of such Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months as provided in Sections 22(e)(3) and 409A(a)(2)(C)(i) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.

(r)“Effective Date” is defined in Section 11 of the Plan.

 

 

(s)“Employee” means any person providing services as an employee of the Company or an Affiliate.  However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan. 

(t)“Entity” means a corporation, partnership, limited liability company or other entity.

(u)“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

(v)“Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14 (d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company, or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.

(w)“Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:

(i)If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock will be, unless otherwise determined by the Board, the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.

(ii)Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.

(iii)In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.

(x)“Incentive Stock Option” means an option granted pursuant to Section 5 of the Plan that is intended to be, and that qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.

(y)“IPO Date” means the date of the underwriting agreement between the Company and the underwriters(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public offering (the “IPO”).

(z)“Non-Employee Director” means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3 of the Exchange Act.

(aa)“Nonstatutory Stock Option” means any option granted pursuant to Section 5 of the Plan that does not qualify as an Incentive Stock Option.

(bb)“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.

(cc)“Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.

(dd)“Option Agreement” means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an Option grant.  Each Option Agreement will be subject to the terms and conditions of the Plan.

 

 

(ee)“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option. 

(ff)“Original Effective Date” is defined in Section 11 of the Plan.

(gg)“Other Stock Award” means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the terms and conditions of Section 6(d).

(hh)“Other Stock Award Agreement” means a written agreement between the Company and a holder of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant.  Each Other Stock Award Agreement will be subject to the terms and conditions of the Plan.

(ii)“Outside Director” means a Director who either (i) is not a current employee of the Company or an “affiliated corporation” (within the meaning of U.S. Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” who receives compensation for prior services (other than benefits under a tax-qualified retirement plan) during the taxable year, has not been an officer of the Company or an “affiliated corporation,” and does not receive remuneration from the Company or an “affiliated corporation,” either directly or indirectly, in any capacity other than as a Director, or (ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code

(jj)“Own,” “Owned,” “Owner,” “Ownership” means a person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.

(kk)“Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.

(ll)“Performance Cash Award” means an award of cash granted pursuant to the terms and conditions of Section 6 (c)(ii).

(mm)“Performance Criteria” means the one or more criteria that the Board will select for purposes of establishing the Performance Goals for a Performance Period.  The Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or combination of, the following as determined by the Board:  (1) profit before tax; (2) billings; (3) revenue; (4) net revenue; (5) earnings (which may include earnings before interest and taxes, earnings before taxes, and net earnings); (6) operating income; (7) operating margin; (8) operating profit; (9) controllable operating profit, or net operating profit; (10) net profit; (11) gross margin; (12) operating expenses or operating expenses as a percentage of revenue; (13) net income; (14) earnings per share; (15) total stockholder return; (16) market share; (17) return on assets or net assets; (18) the Company’s stock price; (19) growth in stockholder value relative to a pre-determined index; (20) return on equity; (21) return on invested capital; (22) cash flow (including free cash flow or operating cash flows); (23) cash conversion cycle; (24) economic value added; (25) individual confidential business objectives; (26) contract awards or backlog; (27) overhead or other expense reduction; (28) credit rating; (29) strategic plan development and implementation; (30) succession plan development and implementation; (31) improvement in workforce diversity; (32) customer indicators; (33) new product invention or innovation; (34) attainment of research and development milestones; (35) improvements in productivity; (36) bookings; (37) initiation of phases of clinical trials and/or studies by specified dates; (38) regulatory body approval with respect to products, studies and/or trials; (39) patient enrollment dates; (40) commercial launch of products; and (41) to the extent that an Award is not intended to comply with Section 162(m) of the Code, other measures of performance selected by the Board.

 

 

(nn)“Performance Goals” means, for a Performance Period, the one or more goals established by the Board for the Performance Period based upon the Performance Criteria.  Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices.  Unless specified otherwise by the Board (i) in the Award Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established, the Board will appropriately make adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows:  (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of any “extraordinary items” as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance Period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under the Company’s bonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to expensed under generally accepted accounting principles; (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles; (12) to exclude the effect of any other unusual, non-recurring gain or loss or other extraordinary item; (13) to exclude the effects of the timing of acceptance for review and/or approval of submissions to the Food and Drug Administration or any other regulatory body; and (14) to exclude the effects of entering into or achieving milestones involved in licensing joint ventures.  In addition, the Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for such Performance Period.  Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Stock Award Agreement or the written terms of a Performance Cash Award. 

(oo)“Performance Period” means the period of time selected by the Board 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 Stock Award or a Performance Cash Award.  Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.

(pp)“Performance Stock Award” means a Stock Award granted under the terms and conditions of Section 6(c)(i). 

(qq)“Plan” means this Atara Biotherapeutics, Inc. 2014 Equity Incentive Plan, as amended and restated.

(rr)“Restricted Stock Award” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(a).

(ss)“Restricted Stock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant.  Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.

(tt)“Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).

(uu)“Restricted Stock Unit Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant.  Each Restricted Stock Unit Award Agreement will be subject to the terms and conditions of the Plan.

(vv)“Securities Act” means the U.S. Securities Act of 1933, as amended.

(ww)“Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 5.

(xx)“Stock Appreciation Right Agreement” means a written agreement between the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant.  Each Stock Appreciation Right Agreement will be subject to the terms and conditions of the Plan.

(yy)“Stock Award” means any right to receive Common Stock granted under the Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right, a Performance Stock Award, or any Other Stock Award.

 

 

(zz)“Stock Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of a Stock Award grant.  Each Stock Award Agreement will be subject to the terms and conditions of the Plan. 

(aaa)“Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.

(bbb)“Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.

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