Document:

zyne_Ex10_17

		
			Exhibit 10.17
		

		
			Inducement Form of Grant
		

		
			ZYNERBA PHARMACEUTICALS, INC.
		

		
			 
		

		
			NONQUALIFIED STOCK OPTION GRANT
		

		
			This NONQUALIFIED STOCK OPTION GRANT AGREEMENT (this “Agreement”), dated as of             , 201   (the “Date of Grant”), is delivered by Zynerba Pharmaceuticals, Inc. (the “Company”) to                 (the “Grantee”).
		

		
			RECITALS
		

		
			A.The Company maintains the Amended and Restated Zynerba Pharmaceuticals, Inc. 2014 Omnibus Incentive Compensation Plan (the “Plan”), which provides the general terms and restrictions for certain equity awards to the Company’s employees, consultants and directors.  This Option is not awarded pursuant to the Plan, but rather is intended to constitute a non-plan based “inducement grant,” as described in Nasdaq Listing Rule 5635(c)(4).  Nonetheless, the terms and provisions of the Plan are hereby incorporated into this Agreement by this reference, as though fully set forth herein, as if this award was granted pursuant to the Plan.
		

		
			B.NOW, THEREFORE, the parties to this Agreement, intending to be legally bound hereby, agree as follows:
		

		
			1.Grant of Option.  Subject to the terms and conditions of this Agreement and the Plan, the Company hereby grants to the Grantee a nonqualified stock option (the “Option”) to purchase             shares of common stock of the Company (“Shares”) at an exercise price of $          per Share.  The Option shall become exercisable according to Paragraph 2 below.
		

		
			 
		

		
			2.Vesting and Exercisability of Option.  The Option shall become vested and exercisable on the following dates, if the Grantee is employed by, or providing service to, the Employer (as defined in the Plan) on the applicable vesting date (each, a “Vesting Date”):
		

		
			Twenty five percent (25%) on                with the balance vesting in twelve equal quarterly installments thereafter, so that each option is 100% vested on the fourth anniversary of the Date of Grant.
		

		
			The vesting and exercisability of the Option is cumulative, but shall not exceed 100% of the Shares subject to the Option.  If the foregoing schedule would produce fractional Shares, the number of Shares for which the Option becomes vested and exercisable shall be rounded down to the nearest whole Share.
		

		
			3.Term of Option.
		

		
			(a)The Option shall have a term of ten years from the Date of Grant and shall terminate at the expiration of that period, unless it is terminated at an earlier date pursuant to the provisions of this Agreement or the Plan.
		

		
			

		 

 

		

		
			(b)The Option shall automatically terminate upon the happening of the first of the following events:
		

		
			(i)The expiration of the 90-day period after the Grantee ceases to be employed by, or provide service to, the Employer, if the termination is for any reason other than Disability, death or Cause (as defined in the Plan).
		

		
			(ii)The expiration of the one-year period after the Grantee ceases to be employed by, or provide service to, the Employer on account of the Grantee’s Disability.
		

		
			(iii)The expiration of the one-year period after the Grantee ceases to be employed by, or provide service to, the Employer, if the Grantee dies while employed by, or providing service to, the Employer or within 90 days after the Grantee ceases to be so employed or provide such services on account of a termination described in subparagraph (i) above.
		

		
			(iv)The date on which the Grantee ceases to be employed by, or provide service to, the Employer for Cause.  In addition, notwithstanding the prior provisions of this Paragraph 3, if the Grantee engages in conduct that constitutes Cause after the Grantee’s employment or service terminates, the Option shall immediately terminate, and the Grantee shall automatically forfeit all Shares underlying any exercised portion of the Option for which the Company has not yet delivered the Share certificates, upon refund by the Company of the exercise price paid by the Grantee for such Shares.
		

		
			Notwithstanding the foregoing, in no event may the Option be exercised after the date that is immediately before the tenth anniversary of the Date of Grant.  Any portion of the Option that is not exercisable at the time the Grantee ceases to be employed by, or provide service to, the Employer shall immediately terminate.
		

		
			4.Exercise Procedures.
		

		
			(a)Subject to the provisions of Paragraphs 2 and 3 above, the Grantee may exercise part or all of the exercisable Option by giving the Company written notice of intent to exercise in the manner provided in this Agreement, specifying the number of Shares as to which the Option is to be exercised and the method of payment.  Payment of the exercise price shall be made in accordance with procedures established by the Board of Directors of the Company (the “Board”) from time to time based on type of payment being made but, in any event, prior to issuance of the Shares.  The Grantee shall pay the exercise price (i) in cash, (ii) unless the Board determines otherwise, by delivering Shares owned by the Grantee and having a Fair Market Value (as defined in the Plan) on the date of exercise at least equal to the exercise price or by attestation (on a form prescribed by the Board) to ownership of Shares having a Fair Market Value on the date of exercise at least equal to the exercise price, (iii) by payment through a broker in accordance with procedures permitted by Regulation T of the Federal Reserve Board, (iv) by surrender of all or any part of the vested Shares for the Option is exercisable to the Company for an appreciation distribution payable in shares of common stock with a Fair Market Value at the time of the Option surrender equal to the dollar amount by which the then Fair Market Value of the shares of common stock subject to the surrendered portion exceeds the aggregate exercise price payable for those shares, or (v) by 
		

		
			
		

		
			

		 

		

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			such other method as the Board may approve.  The Board may impose from time to time such limitations as it deems appropriate on the use of Shares of the Company to exercise the Option.
		

		
			(b)The obligation of the Company to deliver Shares upon exercise of the Option shall be subject to all applicable laws, rules, and regulations and such approvals by governmental agencies as may be deemed appropriate by the Board, including such actions as Company counsel shall deem necessary or appropriate to comply with relevant securities laws and regulations.
		

		
			(c)All obligations of the Company under this Agreement shall be subject to the rights of the Company as set forth in the Plan to withhold amounts required to be withheld for any taxes, if applicable.  Subject to Board approval, the Grantee may elect to satisfy any tax withholding obligation of the Employer with respect to the Option by having Shares withheld up to an amount that does not exceed the minimum applicable withholding tax rate for federal (including FICA), state and local tax liabilities.
		

		
			5.Change of Control.  The provisions of the Plan applicable to a Change of Control (as defined in the Plan) shall apply to the Option, and, in the event of a Change of Control, the Board may take such actions as it deems appropriate pursuant to the Plan.
		

		
			6.Restrictions on Exercise.  Except as the Board may otherwise permit pursuant to the Plan, only the Grantee may exercise the Option during the Grantee’s lifetime and, after the Grantee’s death, the Option shall be exercisable (subject to the limitations specified in the Plan) solely by the legal representatives of the Grantee, or by the person who acquires the right to exercise the Option by will or by the laws of descent and distribution, to the extent that the Option is exercisable pursuant to this Agreement.
		

		
			7.Grant Subject to Plan Provisions.  This grant not is made pursuant to the Plan; however, the terms of the Plan are incorporated herein by reference, and in all respects shall be interpreted in accordance with the Plan.  The grant and exercise of the Option are subject to interpretations, regulations and determinations concerning the Plan established from time to time by the Board in accordance with the provisions of the Plan, including, but not limited to, provisions pertaining to (a) rights and obligations with respect to withholding taxes, (b) the registration, qualification or listing of the Shares, (c) changes in capitalization of the Company and (d) other requirements of applicable law.  The Board shall have the authority to interpret and construe the Option pursuant to the terms of the Plan, and its decisions shall be conclusive as to any questions arising hereunder.
		

		
			8.No Employment or Other Rights.  The grant of the Option shall not confer upon the Grantee any right to be retained by or in the employ or service of the Employer and shall not interfere in any way with the right of the Employer to terminate the Grantee’s employment or service at any time. The right of the Employer to terminate the Grantee’s employment or service at any time for any reason is specifically reserved.
		

		
			9.No Stockholder Rights.  Neither the Grantee, nor any person entitled to exercise the Grantee’s rights in the event of the Grantee’s death, shall have any of the rights and privileges of a stockholder with respect to the Shares subject to the Option, until certificates for Shares have been issued upon the exercise of the Option.
		

		
			

		 

		

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			10.Assignment and Transfers.  Except as the Board may otherwise permit pursuant to the Plan, the rights and interests of the Grantee under this Agreement may not be sold, assigned, encumbered or otherwise transferred except, in the event of the death of the Grantee, by will or by the laws of descent and distribution.  In the event of any attempt by the Grantee to alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any right hereunder, except as provided for in this Agreement, or in the event of the levy or any attachment, execution or similar process upon the rights or interests hereby conferred, the Company may terminate the Option by notice to the Grantee, and the Option and all rights hereunder shall thereupon become null and void.  The rights and protections of the Company hereunder shall extend to any successors or assigns of the Company and to the Company’s parents, subsidiaries, and affiliates.  This Agreement may be assigned by the Company without the Grantee’s consent.
		

		
			11.Applicable Law.  The validity, construction, interpretation and effect of this instrument shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to the conflicts of laws provisions thereof.
		

		
			12.Notice.  Any notice to the Company provided for in this instrument shall be addressed to the Company in care of the General Counsel at                  , and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll of the Employer, or to such other address as the Grantee may designate to the Employer in writing.  Any notice shall be delivered by hand, sent by telecopy or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service.
		

		
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			IN WITNESS WHEREOF, the Company has caused its duly authorized officers to execute and attest this Agreement, and the Grantee has executed this Agreement, effective as of the Date of Grant.
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						ZYNERBA PHARMACEUTICALS, INC.

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 

				
	
					
						 

					
					
						Name:

					
					
						 

				
	
					
						 

					
					
						Title:

					
					
						 

				

		
			 
		

		
			I hereby accept the Option described in this Agreement, and I agree to be bound by the terms of this Agreement and the Plan.  I hereby further agree that all the decisions and determinations of the Board shall be final and binding.
		

		
			 
		

			
					
						 

					
					
						Grantee:

					
					
						 

				

		
			 
		

		
			 
		

		 

		

			5zyne_Ex10_18

		

			CONFIDENTIAL

		

		

			 

		

		
			Exhibit 10.18
		

		
			Board of Directors Compensation Policy
		

		
			 
		

		
			This policy sets forth the compensation for non-employee members of the Board of Directors of Zynerba Pharmaceuticals, Inc. (“Company”) from and after January 25, 2017.  The Board of Directors may change this policy at any time.
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						Compensation Element

					
					
						Amount

					
					
						
Paid or
Granted1

				
	
					
						Board of Directors:

					
						Director Retainer

					
						Lead Independent Director

					
						Annual Option Grant

					
						New Director Option Grant

					
					
						 

					
						$35,000 per year 

					
						$20,000 per year

					
						15,000 options3

					
						35,000 option3

					
					
						 

					
						Quarterly2

					
						Quarterly2

					
						Annually4

					
						At sign-on5

					
						 

				
	
					
						Audit Committee:

					
						Chair Retainer

					
						Member Retainer

					
					
						 

					
						$15,000 per year

					
						$  7,500 per year

					
					
						 

					
						Quarterly2

					
						Quarterly2

				
	
					
						Compensation Committee:

					
						Chair Retainer

					
						Member Retainer

					
					
						$10,000 per year

					
						$5,000 per year

					
						 

					
					
						Quarterly2

					
						Quarterly2

					
						 

				
	
					
						Nominating and Corporate Governance Committee:

					
						Chair Retainer

					
						Member Retainer

					
					
						 

					
						 

					
						$ 5,000 per year

					
						$ 3,500 per year

					
					
						 

					
						 

					
						Quarterly2

					
						Quarterly2

				
	
					
						Expenses:

					
						Reimbursed

					
					
						 

					
						 

					
					
						With receipts as  submitted

				

		
			 
		

		
			______________________________
		

		
			 
		

		
			1All options granted to non-employee directors shall have an exercise price equal to the closing price per share on the date of grant and a term of 10 years.  Upon a termination of service, unvested options expire and vested options remain exercisable for one year.
		

		
			2Quarterly cash payments are disbursed at the beginning of each calendar quarter for service during the quarter. and are subject to adjustment by the Board of Directors from time to time. For calendar year 2017, directors may submit an election by January 31, 2017 to receive stock options in lieu of quarterly cash payments for Q2 through Q4 in an amount based on the Black-Scholes valuation. For calendar year 2018 and thereafter, prior to the beginning of each such calendar year, directors may submit an election to receive stock options in lieu of quarterly cash payments during that year.  Options in lieu of cash compensation are fully vested on the date of grant.
		

		
			3Option amounts are subject to adjustment by the Board of Directors from time to time.
		

		
			4Annual Option Grants are made on the date of the Annual Meeting of Stockholders to all non-employee directors in office after the Annual Meeting; Annual Option Grants vest in full on the earlier of the day before the following year’s Annual Meeting, and the one-year anniversary of the grant date, but vest in full earlier upon a change of control of the Company or the death or total disability of the director.
		

		
			
		

		
			

		 

 

		

			CONFIDENTIAL

		

		

			 

		

		

		
			5New Director Option Grants are made on the date that a new non-employee director joins the Board.  New Director Option Grants vest one-third per year beginning on the one-year anniversary of the grant date, but vest in full earlier upon a change of control of Company or the death or total disability of the director.

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