Document:

Exhibit 10.5

 

VITAE PHARMACEUTICALS, INC.

 

2014 EQUITY INCENTIVE PLAN

 

(AS ADOPTED ON JULY 23, 2014)

 

 

VITAE PHARMACEUTICALS, INC.
 2014 EQUITY INCENTIVE PLAN

 

ARTICLE 1.   INTRODUCTION.

 

The Board adopted the Plan to become effective immediately, although no Awards may be granted prior to the IPO Date.  The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging Service Providers to focus on critical long-range corporate objectives, (b) encouraging the attraction and retention of Service Providers with exceptional qualifications and (c) linking Service Providers directly to stockholder interests through increased stock ownership.  The Plan seeks to achieve this purpose by providing for Awards in the form of Options (which may constitute ISOs or NSOs), SARs, Restricted Shares, Stock Units and Performance Cash Awards.

 

ARTICLE 2.   ADMINISTRATION.

 

2.1                               General.  The Plan may be administered by the Board or one or more Committees.  Each Committee shall have the authority and be responsible for such functions as have been assigned to it.

 

2.2                               Section 162(m).  To the extent an Award is intended to qualify as “performance-based compensation” within the meaning of Code Section 162(m), the Plan will be administered by a Committee of two or more “outside directors” within the meaning of Code Section 162(m).

 

2.3                               Section 16.  To the extent desirable to qualify transactions hereunder as exempt under Exchange Act Rule 16b-3, the transactions contemplated hereunder will be approved by the entire Board or a Committee of two or more “non-employee directors” within the meaning of Exchange Act Rule 16b-3.

 

2.4                               Powers of Administrator.  Subject to the terms of the Plan, and in the case of a Committee, subject to the specific duties delegated to the Committee, the Administrator shall have the authority to (a) select the Service Providers who are to receive Awards under the Plan, (b) determine the type, number, vesting requirements and other features and conditions of such Awards, (c) determine whether and to what extent any Performance Goals have been attained, (d) interpret the Plan and Awards granted under the Plan, (e) make, amend and rescind rules relating to the Plan and Awards granted under the Plan, including rules relating to sub-plans established for the purposes of satisfying applicable foreign laws or for qualifying for favorable tax treatment under applicable foreign laws, (f) impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by a Participant of any Common Shares issued pursuant to an Award, including restrictions under an insider trading policy and restrictions as to the use of a specified brokerage firm for such resales, and (g) make all other decisions relating to the operation of the Plan and Awards granted under the Plan.

 

 

2.5                               Effect of Administrator’s Decisions.  The Administrator’s decisions, determinations and interpretations shall be final and binding on all Participants and any other holders of Awards.

 

2.6                               Governing Law.  The Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware (except its choice-of-law provisions).

 

ARTICLE 3.   SHARES AVAILABLE FOR GRANTS.

 

3.1                               Basic Limitation.  Common Shares issued pursuant to the Plan may be authorized but unissued shares or treasury shares.  The aggregate number of Common Shares issued under the Plan shall not exceed the sum of (a) 1,782,500 Common Shares, (b) the number of Common Shares reserved under the Predecessor Plans that are not issued or subject to outstanding awards under the Predecessor Plans on the IPO Date, (c) any Common Shares subject to outstanding options under the Predecessor Plans on the IPO Date that subsequently expire or lapse unexercised and Common Shares issued pursuant to awards granted under the Predecessor Plans that are outstanding on the IPO Date and that are subsequently forfeited to or repurchased by the Company and (d) the additional Common Shares described in Articles 3.2 and 3.3; provided, however, that no more than 1,070,687 Common Shares, in the aggregate, shall be added to the Plan pursuant to clauses (b) and (c).  The number of Common Shares that are subject to Stock Awards outstanding at any time under the Plan may not exceed the number of Common Shares that then remain available for issuance under the Plan.  The numerical limitations in this Article 3.1 shall be subject to adjustment pursuant to Article 9.

 

3.2                               Annual Increase in Shares.  As of the first business day of each fiscal year of the Company during the term of the Plan, commencing in 2015, the aggregate number of Common Shares that may be issued under the Plan shall automatically increase by a number equal to the least of (a) 4% of the total number of Common Shares outstanding on the last business day of the prior fiscal year, (b) subject to adjustment pursuant to Article 9, 1,426,000 Common Shares, or (c) a number of Common Shares determined by the Board.

 

3.3                               Shares Returned to Reserve.  To the extent that Options, SARs or Stock Units are forfeited or expire for any other reason before being exercised or settled in full, the Common Shares subject to such Options, SARs or Stock Units shall again become available for issuance under the Plan.  If SARs are exercised or Stock Units are settled, then only the number of Common Shares (if any) actually issued to the Participant upon exercise of such SARs or settlement of such Stock Units, as applicable, shall reduce the number available under Article 3.1 and the balance shall again become available for issuance under the Plan.  If Restricted Shares or Common Shares issued upon the exercise of Options are reacquired by the Company pursuant to a forfeiture provision, repurchase right or for any other reason, then such Common Shares shall again become available for issuance under the Plan.  Common Shares applied to pay the Exercise Price of Options or to satisfy tax withholding obligations related to any Award shall again become available for issuance under the Plan.  To the extent that an Award is settled in cash rather than Common Shares, the cash settlement shall not reduce the number of Shares available for issuance under the Plan.

 

2

 

3.4                               Awards Not Reducing Share Reserve in Article 3.1.  Any dividend equivalents paid or credited under the Plan with respect to Stock Units shall not be applied against the number of Common Shares that may be issued under the Plan, whether or not such dividend equivalents are converted into Stock Units.  In addition, Common Shares subject to Substitute Awards granted by the Company shall not reduce the number of Common Shares that may be issued under Article 3.1, nor shall shares subject to Substitute Awards again be available for Awards under the Plan in the event of any forfeiture, expiration or cash settlement of such Substitute Awards.

 

3.5                               Code Section 162(m) and 422 Limits.  Subject to adjustment in accordance with Article 9:

 

(a)                                 The aggregate number of Common Shares subject to Options and SARs that may be granted under this Plan during any fiscal year to any one Participant shall not exceed 500,000, except that the Company may grant to a new Employee in the fiscal year in which his or her Service as an Employee first commences Options and/or SARs that cover (in the aggregate) up to an additional 1,000,000 Common Shares;

 

(b)                                 The aggregate number of Common Shares subject to Restricted Share awards and Stock Units that may be granted under this Plan during any fiscal year to any one Participant shall not exceed 500,000, except that the Company may grant to a new Employee in the fiscal year in which his or her Service as an Employee first commences Restricted Shares and/or Stock Units that cover (in the aggregate) up to an additional 1,000,000 Common Shares;

 

(c)                                  No Participant shall be paid more than $5,000,000 in cash in any fiscal year pursuant to Performance Cash Awards granted under the Plan; and

 

(d)                                 No more than 2,853,187 Common Shares plus the additional Common Shares described in Article 3.2 may be issued under the Plan upon the exercise of ISOs.

 

ARTICLE 4.   ELIGIBILITY.

 

4.1                               Incentive Stock Options.  Only Employees who are common-law employees of the Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs.  In addition, an Employee who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company or any of its Parents or Subsidiaries shall not be eligible for the grant of an ISO unless the additional requirements set forth in Code Section 422(c)(5) are satisfied.

 

4.2                               Other Awards.  Awards other than ISOs may only be granted to Service Providers.

 

ARTICLE 5.   OPTIONS.

 

5.1                               Stock Option Agreement.  Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company.  Such Option shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.  The Stock Option Agreement shall specify whether the Option is 

 

3

 

intended to be an ISO or an NSO.  The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.

 

5.2                               Number of Shares.  Each Stock Option Agreement shall specify the number of Common Shares subject to the Option, which number shall adjust in accordance with Article 9.

 

5.3                               Exercise Price.  Each Stock Option Agreement shall specify the Exercise Price, which shall not be less than 100% of the Fair Market Value of a Common Share on the date of grant.  The preceding sentence shall not apply to an Option that is a Substitute Award granted in a manner that would satisfy the requirements of Code Section 409A and, if applicable, Code Section 424(a).

 

5.4                               Exercisability and Term.  Each Stock Option Agreement shall specify the date or event when all or any installment of the Option is to become vested and/or exercisable.  The Stock Option Agreement shall also specify the term of the Option; provided that, except to the extent necessary to comply with applicable foreign law, the term of an Option shall in no event exceed 10 years from the date of grant.  A Stock Option Agreement may provide for accelerated vesting and/or exercisability upon certain specified events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s Service.

 

5.5                               Death of Optionee.  After an Optionee’s death, any vested and exercisable Options held by such Optionee may be exercised by his or her beneficiary or beneficiaries.  Each Optionee may designate one or more beneficiaries for this purpose by filing the prescribed form with the Company.  A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Optionee’s death.  If no beneficiary was designated or if no designated beneficiary survives the Optionee, then any vested and exercisable Options held by the Optionee may be exercised by his or her estate.

 

5.6                               Modification or Assumption of Options.  Within the limitations of the Plan, the Administrator may modify, reprice, extend or assume outstanding options or may accept the cancellation of outstanding options (whether granted by the Company or by another issuer) in return for the grant of new Options for the same or a different number of shares and at the same or a different exercise price or in return for the grant of a different type of Award.  The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair his or her rights or obligations under such Option.

 

5.7                               Buyout Provisions.  The Administrator may at any time (a) offer to buy out for a payment in cash or cash equivalents an Option previously granted or (b) authorize an Optionee to elect to cash out an Option previously granted, in either case at such time and based upon such terms and conditions as the Administrator shall establish.

 

5.8                               Payment for Option Shares.  The entire Exercise Price of Common Shares issued upon exercise of Options shall be payable in cash or cash equivalents at the time when such Common Shares are purchased.  In addition, the Administrator may, in its sole discretion and to the extent permitted by applicable law, accept payment of all or a portion of the Exercise Price through any one or a combination of the following forms or methods:

 

4

 

(a)                                 Subject to any conditions or limitations established by the Administrator, by surrendering, or attesting to the ownership of, Common Shares that are already owned by the Optionee with a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Common Shares as to which such Option will be exercised;

 

(b)                                 By delivering (on a form prescribed by the Company) an irrevocable direction to a securities broker approved by the Company to sell all or part of the Common Shares being purchased under the Plan and to deliver all or part of the sales proceeds to the Company;

 

(c)                                  Subject to such conditions and requirements as the Administrator may impose from time to time, through a net exercise procedure; or

 

(d)                                 Through any other form or method consistent with applicable laws, regulations and rules.

 

ARTICLE 6.   STOCK APPRECIATION RIGHTS.

 

6.1                               SAR Agreement.  Each grant of a SAR under the Plan shall be evidenced by a SAR Agreement between the Optionee and the Company.  Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.  The provisions of the various SAR Agreements entered into under the Plan need not be identical.

 

6.2                               Number of Shares.  Each SAR Agreement shall specify the number of Common Shares to which the SAR pertains, which number shall adjust in accordance with Article 9.

 

6.3                               Exercise Price.  Each SAR Agreement shall specify the Exercise Price, which shall in no event be less than 100% of the Fair Market Value of a Common Share on the date of grant.  The preceding sentence shall not apply to a SAR that is a Substitute Award granted in a manner that would satisfy the requirements of Code Section 409A.

 

6.4                               Exercisability and Term.  Each SAR Agreement shall specify the date when all or any installment of the SAR is to become vested and exercisable.  The SAR Agreement shall also specify the term of the SAR; provided that except to the extent necessary to comply with applicable foreign law, the term of a SAR shall not exceed 10 years from the date of grant.  A SAR Agreement may provide for accelerated vesting and exercisability upon certain specified events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s Service.

 

6.5                               Exercise of SARs.  Upon exercise of a SAR, the Optionee (or any person having the right to exercise the SAR after his or her death) shall receive from the Company (a) Common Shares, (b) cash or (c) a combination of Common Shares and cash, as the Administrator shall determine.  The amount of cash and/or the Fair Market Value of Common Shares received upon exercise of SARs shall, in the aggregate, not exceed the amount by which the Fair Market Value (on the date of surrender) of the Common Shares subject to the SARs exceeds the Exercise Price.  If, on the date when a SAR expires, the Exercise Price is less than the Fair Market Value on such date but any portion of such SAR has not been exercised or surrendered, then such SAR shall

 

5

 

automatically be deemed to be exercised as of such date with respect to such portion.  A SAR Agreement may also provide for an automatic exercise of the SAR on an earlier date.

 

6.6                               Death of Optionee.  After an Optionee’s death, any vested and exercisable SARs held by such Optionee may be exercised by his or her beneficiary or beneficiaries.  Each Optionee may designate one or more beneficiaries for this purpose by filing the prescribed form with the Company.  A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Optionee’s death.  If no beneficiary was designated or if no designated beneficiary survives the Optionee, then any vested and exercisable SARs held by the Optionee at the time of his or her death may be exercised by his or her estate.

 

6.7                               Modification or Assumption of SARs.  Within the limitations of the Plan, the Administrator may modify, reprice, extend or assume outstanding SARs or may accept the cancellation of outstanding SARs (whether granted by the Company or by another issuer) in return for the grant of new SARs for the same or a different number of shares and at the same or a different exercise price or in return for the grant of a different type of Award.  The foregoing notwithstanding, no modification of a SAR shall, without the consent of the Optionee, impair his or her rights or obligations under such SAR.

 

ARTICLE 7.   RESTRICTED SHARES.

 

7.1                               Restricted Stock Agreement.  Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Stock Agreement between the recipient and the Company.  Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.  The provisions of the various Restricted Stock Agreements entered into under the Plan need not be identical.

 

7.2                               Payment for Awards.  Restricted Shares may be sold or awarded under the Plan for such consideration as the Administrator may determine, including (without limitation) cash, cash equivalents, property, cancellation of other equity awards, full-recourse promissory notes, past services and future services, and such other methods of payment as are permitted by applicable law.

 

7.3                               Vesting Conditions.  Each Award of Restricted Shares may or may not be subject to vesting and/or other conditions as the Administrator may determine.  Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Agreement.  Such conditions, at the Administrator’s discretion, may include one or more Performance Goals.  A Restricted Stock Agreement may provide for accelerated vesting upon certain specified events.

 

7.4                               Voting and Dividend Rights.  The holders of Restricted Shares awarded under the Plan shall have the same voting, dividend and other rights as the Company’s other stockholders, unless the Administrator otherwise provides.  A Restricted Stock Agreement, however, may require that any cash dividends paid on Restricted Shares (a) be accumulated and paid when such Restricted Shares vest, or (b) be invested in additional Restricted Shares.  Such additional Restricted Shares shall be subject to the same conditions and restrictions as the shares subject to the Stock Award with respect to which the dividends were paid.  In addition, unless

 

6

 

the Administrator provides otherwise, if any dividends or other distributions are paid in Common Shares, such Common Shares shall be subject to the same restrictions on transferability and forfeitability as the Restricted Shares with respect to which they were paid.

 

ARTICLE 8.   STOCK UNITS.

 

8.1                               Stock Unit Agreement.  Each grant of Stock Units under the Plan shall be evidenced by a Stock Unit Agreement between the recipient and the Company.  Such Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.  The provisions of the various Stock Unit Agreements entered into under the Plan need not be identical.

 

8.2                               Payment for Awards.  To the extent that an Award is granted in the form of Stock Units, no cash consideration shall be required of the Award recipients.

 

8.3                               Vesting Conditions.  Each Award of Stock Units may or may not be subject to vesting, as determined by the Administrator.  Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Stock Unit Agreement.  Such conditions, at the Administrator’s discretion, may include one or more Performance Goals.  A Stock Unit Agreement may provide for accelerated vesting upon certain specified events.

 

8.4                               Voting and Dividend Rights.  The holders of Stock Units shall have no voting rights.  Prior to settlement or forfeiture, Stock Units awarded under the Plan may, at the Administrator’s discretion, provide for a right to dividend equivalents.  Such right entitles the holder to be credited with an amount equal to all cash dividends paid on one Common Share while the Stock Unit is outstanding.  Dividend equivalents may be converted into additional Stock Units.  Settlement of dividend equivalents may be made in the form of cash, in the form of Common Shares, or in a combination of both.  Prior to distribution, any dividend equivalents shall be subject to the same conditions and restrictions as the Stock Units to which they attach.

 

8.5                               Form and Time of Settlement of Stock Units.  Settlement of vested Stock Units may be made in the form of (a) cash, (b) Common Shares or (c) any combination of both, as determined by the Administrator.  The actual number of Stock Units eligible for settlement may be larger or smaller than the number included in the original Award, based on predetermined performance factors, including Performance Goals.  Methods of converting Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of Common Shares over a series of trading days.  Vested Stock Units shall be settled in such manner and at such time(s) as specified in the Stock Unit Agreement.  Until an Award of Stock Units is settled, the number of such Stock Units shall be subject to adjustment pursuant to Article 9.

 

8.6                               Death of Recipient.  Any Stock Units that become payable after the recipient’s death shall be distributed to the recipient’s beneficiary or beneficiaries.  Each recipient of Stock Units under the Plan may designate one or more beneficiaries for this purpose by filing the prescribed form with the Company.  A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Award recipient’s death.  If no beneficiary was designated or if no designated beneficiary survives the Award recipient, then any

 

7

 

Stock Units that become payable after the recipient’s death shall be distributed to the recipient’s estate.

 

8.7                               Modification or Assumption of Stock Units.  Within the limitations of the Plan, the Administrator may modify or assume outstanding stock units or may accept the cancellation of outstanding stock units (whether granted by the Company or by another issuer) in return for the grant of new Stock Units for the same or a different number of shares or in return for the grant of a different type of Award.  The foregoing notwithstanding, no modification of a Stock Unit shall, without the consent of the Participant, impair his or her rights or obligations under such Stock Unit.

 

8.8                               Creditors’ Rights.  A holder of Stock Units shall have no rights other than those of a general creditor of the Company.  Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Stock Unit Agreement.

 

ARTICLE 9.   ADJUSTMENTS; DISSOLUTIONS AND LIQUIDATIONS; CORPORATE TRANSACTIONS.

 

9.1                               Adjustments.  In the event of a subdivision of the outstanding Common Shares, a declaration of a dividend payable in Common Shares, a combination or consolidation of the outstanding Common Shares (by reclassification or otherwise) into a lesser number of Common Shares or any other increase or decrease in the number of issued Common Shares effected without receipt of consideration by the Company, proportionate adjustments shall automatically be made to the following:

 

(a)                                 The number and kind of shares available for issuance under Article 3, including the numerical share limits in Articles 3.1, 3.2 and 3.5;

 

(b)                                 The number and kind of shares covered by each outstanding Option, SAR and Stock Unit; or

 

(c)                                  The Exercise Price applicable to each outstanding Option and SAR, and the repurchase price, if any, applicable to Restricted Shares.

 

In the event of a declaration of an extraordinary dividend payable in a form other than Common Shares in an amount that has a material effect on the price of Common Shares, a recapitalization, a spin-off or a similar occurrence, the Administrator may make such adjustments as it, in its sole discretion, deems appropriate to the foregoing.  Any adjustment in the number of shares subject to an Award under this Article 9.1 shall be rounded down to the nearest whole share, although the Administrator in its sole discretion may make a cash payment in lieu of a fractional share.  Except as provided in this Article 9, a Participant shall have no rights by reason of any issuance by the Company of stock of any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class.

 

8

 

9.2                               Dissolution or Liquidation.  To the extent not previously exercised or settled, Options, SARs and Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company.

 

9.3                               Corporate Transactions. In the event that the Company is a party to a merger, consolidation, or a Change in Control (other than one described in Article 14.6(d)), all Common Shares acquired under the Plan and all Awards outstanding on the effective date of the transaction shall be treated in the manner described in the definitive transaction agreement (or, in the event the transaction does not entail a definitive agreement to which the Company is party, in the manner determined by the Administrator, with such determination having final and binding effect on all parties), which agreement or determination need not treat all Awards (or portions thereof) in an identical manner. Unless an Award Agreement provides otherwise, the treatment specified in the transaction agreement or by the Administrator shall include one or more of the following with respect to each outstanding Award:

 

(a)                                 The continuation of such outstanding Award by the Company (if the Company is the surviving entity);

 

(b)                                 The assumption of such outstanding Award by the surviving entity or its parent, provided that the assumption of an Option or a SAR shall comply with applicable tax requirements;

 

(c)                                  The substitution by the surviving entity or its parent of an equivalent award for such outstanding Award (including, but not limited to, an award to acquire the same consideration paid to the holders of Common Shares in the transaction), provided that the substitution of an Option or a SAR shall comply with applicable tax requirements;

 

(d)                                 The cancellation of such Award and a payment to the Participant with respect to each share subject to the Award equal to the excess of (A) the value, as determined by the Administrator in its absolute discretion, of the property (including cash) received by the holder of a Common Share as a result of the transaction, over (if applicable) (B) the per-share Exercise Price or Purchase Price of such Award (such excess, if any, the “Spread”).  Subject to Section 409A of the Code, such payment may be made in installments and may be deferred until the date or dates when the Award would have become exercisable or vested, as applicable.  The Spread initially shall be calculated without regard to whether or not the Award is then exercisable or vested.  However, such payment may be subject to vesting based on the Participant’s continuing service, provided that the vesting schedule shall not be less favorable to the Participant than the schedule under which the Award would have vested.  Such payment shall be made in the form of cash, cash equivalents, or securities of the surviving entity or its parent having a value equal to the Spread.  In addition, any escrow, holdback, earn-out or similar provisions in the transaction agreement may apply to such payment to the same extent and in the same manner as such provisions apply to the holders of Common Shares, but only to the extent the application of such provisions does not adversely affect the status of the Award as exempt from Code Section 409A.  If the Spread applicable to an Award (whether or not vested) is zero or a negative number, then the Award may be

 

9

 

cancelled without making a payment to the Participant. In the event that a Stock Unit is subject to Code Section 409A, the payment described in this clause (d) shall be made on the settlement date specified in the applicable Stock Unit Agreement, provided that settlement may be accelerated in accordance with Treasury Regulation Section 1.409A-3(j)(4); or

 

(e)                                  The assignment of any reacquisition or repurchase rights held by the Company in respect of an Award of Restricted Shares to the surviving entity or its parent, with corresponding proportionate adjustments made to the price per share to be paid upon exercise of any such reacquisition or repurchase rights.

 

For avoidance of doubt, the Administrator shall have the discretion, exercisable either at the time an Award is granted or at any time while the Award remains outstanding, to provide for the acceleration of vesting upon the occurrence of a Change in Control, whether or not the Award is to be assumed or replaced in the transaction, or in connection with a termination of the Participant’s Service following a transaction.

 

Any action taken under this Article 9.3 shall either preserve an Award’s status as exempt from Code Section 409A or comply with Code Section 409A.

 

ARTICLE 10.   OTHER AWARDS.

 

10.1                        Performance Cash Awards.  A Performance Cash Award is a cash award that may be granted subject to the attainment of specified Performance Goals during a Performance Period.  A Performance Cash Award may also require the completion of a specified period of continuous Service.  The length of the Performance Period, the Performance Goals to be attained during the Performance Period, and the degree to which the Performance Goals have been attained shall be determined conclusively by the Administrator.  Each Performance Cash Award shall be set forth in a written agreement or in a resolution duly adopted by the Administrator which shall contain provisions determined by the Administrator and not inconsistent with the Plan.  The terms of various Performance Cash Awards need not be identical.

 

10.2                        Awards Under Other Plans.  The Company may grant awards under other plans or programs.  Such awards may be settled in the form of Common Shares issued under this Plan.  Such Common Shares shall be treated for all purposes under the Plan like Common Shares issued in settlement of Stock Units and shall, when issued, reduce the number of Common Shares available under Article 3.

 

ARTICLE 11.   LIMITATION ON RIGHTS.

 

11.1                        Retention Rights.  Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain a Service Provider.  The Company and its Parents, Subsidiaries and Affiliates reserve the right to terminate the Service of any Service Provider at any time, with or without cause, subject to applicable laws, the Company’s certificate of incorporation and by-laws and a written employment agreement (if any).

 

11.2                        Stockholders’ Rights.  Except as set forth in Article 7.4 or 8.4 above, a Participant shall have no dividend rights, voting rights or other rights as a stockholder with

 

10

 

respect to any Common Shares covered by his or her Award prior to the time when a stock certificate for such Common Shares is issued or, if applicable, the time when he or she becomes entitled to receive such Common Shares by filing any required notice of exercise and paying any required Exercise Price.  No adjustment shall be made for cash dividends or other rights for which the record date is prior to such time, except as expressly provided in the Plan.

 

11.3                        Regulatory Requirements.  Any other provision of the Plan notwithstanding, the obligation of the Company to issue Common Shares under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required.  The Company reserves the right to restrict, in whole or in part, the delivery of Common Shares pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance of such Common Shares, to their registration, qualification or listing or to an exemption from registration, qualification or listing.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed necessary by the Company’s counsel to be necessary to the lawful issuance and sale of any Common Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Common Shares as to which such requisite authority will not have been obtained.

 

11.4                        Transferability of Awards.  The Administrator may, in its sole discretion, permit transfer of an Award in a manner consistent with applicable law.  Unless otherwise determined by the Administrator, Awards shall be transferable by a Participant only by (a) beneficiary designation, (b) a will or (c) the laws of descent and distribution; provided that, in any event, an ISO may only be transferred by will or by the laws of descent and distribution and may be exercised during the lifetime of the Optionee only by the Optionee or by the Optionee’s guardian or legal representative.

 

11.5                        Other Conditions and Restrictions on Common Shares.  Any Common Shares issued under the Plan shall be subject to such forfeiture conditions, rights of repurchase, rights of first refusal, other transfer restrictions and such other terms and conditions as the Administrator may determine.  Such conditions and restrictions shall be set forth in the applicable Award Agreement and shall apply in addition to any restrictions that may apply to holders of Common Shares generally.  In addition, Common Shares issued under the Plan shall be subject to such conditions and restrictions imposed either by applicable law or by Company policy, as adopted from time to time, designed to ensure compliance with applicable law or laws with which the Company determines in its sole discretion to comply including in order to maintain any statutory, regulatory or tax advantage.

 

ARTICLE 12.   TAXES.

 

12.1                        General.  It is a condition to each Award under the Plan that a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any federal, state, local or foreign withholding tax obligations that arise in connection with any Award granted under the Plan.  The Company shall not be required to issue any Common Shares or make any cash payment under the Plan unless such obligations are satisfied.

 

12.2                        Share Withholding.  To the extent that applicable law subjects a Participant to tax withholding obligations, the Administrator may permit such Participant to satisfy all or part

 

11

 

of such obligations by having the Company withhold all or a portion of any Common Shares that otherwise would be issued to him or her or by surrendering all or a portion of any Common Shares that he or she previously acquired.  Such Common Shares shall be valued on the date when they are withheld or surrendered.  Any payment of taxes by assigning Common Shares to the Company may be subject to restrictions including any restrictions required by SEC, accounting or other rules.

 

12.3                        Section 162(m) Matters  The Administrator, in its sole discretion, may determine whether an Award is intended to qualify as “performance-based compensation” within the meaning of Code Section 162(m).  The Administrator may grant Awards that are based on Performance Goals but that are not intended to qualify as performance-based compensation.  With respect to any Award that is intended to qualify as performance-based compensation, the Administrator shall designate the Performance Goal(s) applicable to, and the formula for calculating the amount payable under, an Award within 90 days following commencement of the applicable Performance Period (or such earlier time as may be required under Code Section 162(m)), and in any event at a time when achievement of the applicable Performance Goal(s) remains substantially uncertain.  Prior to the payment of any Award that is intended to constitute performance-based compensation, the Administrator shall certify in writing whether and the extent to which the Performance Goal(s) were achieved for such Performance Period.  The Administrator shall have the right to reduce or eliminate (but not to increase) the amount payable under an Award that is intended to constitute performance-based compensation.

 

12.4                        Section 409A Matters.  Except as otherwise expressly set forth in an Award Agreement, it is intended that Awards granted under the Plan either be exempt from, or comply with, the requirements of Code Section 409A.  To the extent an Award is subject to Code Section 409A (a “409A Award”), the terms of the Plan, the Award and any written agreement governing the Award shall be interpreted to comply with the requirements of Code Section 409A so that the Award is not subject to additional tax or interest under Code Section 409A, unless the Administrator expressly provides otherwise.  A 409A Award shall be subject to such additional rules and requirements as specified by the Administrator from time to time in order for it to comply with the requirements of Code Section 409A.  In this regard, if any amount under a 409A Award is payable upon a “separation from service” to an individual who is considered a “specified employee” (as each term is defined under Code Section 409A), then no such payment shall be made prior to the date that is the earlier of (i) six months and one day after the Participant’s separation from service or (ii) the Participant’s death, but only to the extent such delay is necessary to prevent such payment from being subject to Code Section 409A(a)(1).

 

12.5                        Limitation on Liability.  Neither the Company nor any person serving as Administrator shall have any liability to a Participant in the event an Award held by the Participant fails to achieve its intended characterization under applicable tax law.

 

ARTICLE 13.   FUTURE OF THE PLAN.

 

13.1                        Term of the Plan.  The Plan, as set forth herein, shall become effective on the date of its adoption by the Board, subject to approval of the Company’s stockholders under Article 13.3 below.  The Plan shall terminate automatically 10 years after the later of (a) the date when the Board adopted the Plan or (b) the date when the Board approved the most recent

 

12

 

increase in the number of Common Shares reserved under Article 3 that was also approved by the Company’s stockholders.

 

13.2                        Amendment or Termination.  The Board may, at any time and for any reason, amend or terminate the Plan.  No Awards shall be granted under the Plan after the termination thereof.  The termination of the Plan, or any amendment thereof, shall not affect any Award previously granted under the Plan.

 

13.3                        Stockholder Approval.  To the extent required by applicable law, the Plan will be subject to the approval of the Company’s stockholders within 12 months of its adoption date.  An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules.

 

ARTICLE 14.   DEFINITIONS.

 

14.1                        “Administrator” means the Board or any Committee administering the Plan in accordance with Article 2.

 

14.2                        “Affiliate” means any entity other than a Subsidiary, if the Company and/or one or more Subsidiaries own not less than 50% of such entity.

 

14.3                        “Award” means any award granted under the Plan, including as an Option, a SAR, a Restricted Share, a Stock Unit or a Performance Cash Award.

 

14.4                        “Award Agreement” means a Stock Option Agreement, an SAR Agreement, a Restricted Stock Agreement, a Stock Unit Agreement or such other agreement evidencing an Award granted under the Plan.

 

14.5                        “Board” means the Company’s Board of Directors, as constituted from time to time.

 

14.6                        “Change in Control” means:

 

(a)                                 Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the total voting power represented by the Company’s then-outstanding voting securities;

 

(b)                                 The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets;

 

(c)                                  The consummation of a merger or consolidation of the Company with or into any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) more than fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation; or

 

13

 

(d)                                 Individuals who are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board over a period of 12 months; 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 shall, for purposes of this Plan, be considered as a member of the Incumbent Board.

 

A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.  In addition, if a Change in Control constitutes a payment event with respect to any Award which provides for a deferral of compensation and is subject to Code Section 409A, then notwithstanding anything to the contrary in the Plan or applicable Award Agreement the transaction with respect to such Award must also constitute a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) to the extent required by Code Section 409A.

 

14.7                        “Code” means the Internal Revenue Code of 1986, as amended.

 

14.8                        “Committee” means a committee of one or more members of the Board, or of other individuals satisfying applicable laws, appointed by the Board to administer the Plan.

 

14.9                        “Common Share” means one share of the common stock of the Company.

 

14.10                 “Company” means Vitae Pharmaceuticals, Inc., a Delaware corporation.

 

14.11                 “Consultant” means a consultant or adviser who provides bona fide services to the Company, a Parent, a Subsidiary or an Affiliate as an independent contractor and who qualifies as a consultant or advisor under Instruction A.1.(a)(1) of Form S-8 under the Securities Act.

 

14.12                 “Employee” means a common-law employee of the Company, a Parent, a Subsidiary or an Affiliate.

 

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

 

14.14                 “Exercise Price,” in the case of an Option, means the amount for which one Common Share may be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement.  “Exercise Price,” in the case of a SAR, means an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value of one Common Share in determining the amount payable upon exercise of such SAR.

 

14.15                 “Fair Market Value” means the closing price of a Common Share on any established stock exchange or a national market system on the applicable date or, if the applicable date is not a trading day, on the last trading day prior to the applicable date, as reported in a source that the Administrator deems reliable.  If Common Shares are not traded on an established stock exchange or a national market system, the Fair Market Value shall be

 

14

 

determined by the Administrator in good faith on such basis as it deems appropriate.  The Administrator’s determination shall be conclusive and binding on all persons.

 

14.16                 “IPO Date” means the effective date of the registration statement filed by the Company with the Securities and Exchange Commission for its initial offering of Common Stock to the public.

 

14.17                 “ISO” means an incentive stock option described in Code Section 422(b).

 

14.18                 “NSO” means a stock option not described in Code Sections 422 or 423.

 

14.19                 “Option” means an ISO or NSO granted under the Plan and entitling the holder to purchase Common Shares.

 

14.20                 “Optionee” means an individual or estate holding an Option or SAR.

 

14.21                 “Outside Director” means a member of the Board who is not an Employee.

 

14.22                 “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.  A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

 

14.23                 “Participant” means an individual or estate holding an Award.

 

14.24                 “Performance Cash Award” means an award of cash granted under Article 10.1 of the Plan.

 

14.25                 “Performance Goal” means a goal established by the Administrator for the applicable Performance Period based on one or more of the performance criteria set forth in Appendix A.  Depending on the performance criteria used, a Performance Goal may be expressed in terms of overall Company performance or the performance of a business unit, division, Subsidiary, Affiliate or an individual.  A Performance Goal may be measured either in absolute terms or relative to the performance of one or more comparable companies or one or more relevant indices.  The Administrator may adjust the results under any performance criterion to exclude any of the following events that occurs during a Performance Period: (a) asset write-downs, (b) litigation, claims, judgments or settlements, (c) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results, (d) accruals for reorganization and restructuring programs, (e) extraordinary, unusual or non-recurring items, (f) exchange rate effects for non-U.S. dollar denominated net sales and operating earnings, or (g) statutory adjustments to corporate tax rates; provided, however, that if an Award is intended to qualify as “performance-based compensation” within the meaning of Code Section 162(m), such adjustment(s) shall only be made to the extent consistent with Code Section 162(m).

 

15

 

14.26                 “Performance Period” means a period of time selected by the Administrator over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to a Performance Cash Award or an Award of Restricted Shares or Stock Units that vests based on the achievement of Performance Goals.  Performance Periods may be of varying and overlapping duration, at the discretion of the Administrator.

 

14.27                 “Plan” means this Vitae Pharmaceuticals, Inc. 2014 Equity Incentive Plan, as amended from time to time.

 

14.28                 “Predecessor Plans” means the Company’s 2013 Stock Plan, 2004 Stock Plan and the 2001 Stock Plan, each, as amended from time to time.

 

14.29                 “Restricted Share” means a Common Share awarded under the Plan.

 

14.30                 “Restricted Stock Agreement” means the agreement between the Company and the recipient of a Restricted Share that contains the terms, conditions and restrictions pertaining to such Restricted Share.

 

14.31                 “SAR” means a stock appreciation right granted under the Plan.

 

14.32                 “SAR Agreement” means the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her SAR.

 

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

 

14.34                 “Service” means service as an Employee, Outside Director or Consultant.

 

14.35                 “Service Provider” means any individual who is an Employee, Outside Director or Consultant.

 

14.36                 “Stock Award” means any award of an Option, a SAR, a Restricted Share or a Stock Unit under the Plan.

 

14.37                 “Stock Option Agreement” means the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her Option.

 

14.38                 “Stock Unit” means a bookkeeping entry representing the equivalent of one Common Share, as awarded under the Plan.

 

14.39                 “Stock Unit Agreement” means the agreement between the Company and the recipient of a Stock Unit that contains the terms, conditions and restrictions pertaining to such Stock Unit.

 

14.40                 “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total

 

16

 

combined voting power of all classes of stock in one of the other corporations in such chain.  A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date

 

14.41                 “Substitute Awards” means Awards or Common Shares issued by the Company in assumption of, or substitution or exchange for, Awards previously granted, or the right or obligation to make future awards, in each case by a corporation acquired by the Company or any Affiliate or with which the Company or any Affiliate combines to the extent permitted by NASDAQ Marketplace Rule 5635 or any successor thereto.

 

17

 

APPENDIX A

 

PERFORMANCE CRITERIA

 

The Administrator may establish Performance Goals derived from one or more of the following criteria when it makes Awards of Restricted Shares or Stock Units that vest entirely or in part on the basis of performance or when it makes Performance Cash Awards:

 

·                              Achievement of strategic corporate or product goals

 

·                              Backlog

 

·                              Bookings (including annual or total contract value bookings)

 

·                              Cash

 

·                              Cash and short-term investments

 

·                              Cash flow return on investment

 

·                              Comparisons with various stock market indices

 

·                              Deferred revenue

 

·                              Earnings or earnings per share (including earnings before taxes, earnings before interest and taxes or earnings before interest, taxes, depreciation and amortization)

 

·                              Expenses or expense reductions

 

·                              Free cash flow or free cash flow per share

 

·                              Gross profits

 

·                              Headcount

 

·                              Implementation, completion or attainment of measurable objectives with respect to research, development, products, projects or recruiting and maintaining personnel

 

·                              Market share

 

·                              Net income (before or after taxes)

 

·                             Operating margin or cash margin

 

·                              Operating profit/loss (on a GAAP or non-GAAP basis)

 

·                              Partnership milestone achievement

 

·                              Pre- or after-tax income (before or after allocation of corporate overhead and bonus)

 

·                              Reductions in costs

 

·                              Return on equity

 

·                              Revenue

 

·                              Stock price

 

·                              Total expenses

 

·                              Total stockholder return

 

·                              Working capital

 

·                              Increases or growth in any of the foregoing

 

 

·                              To the extent that an Award is not intended to comply with Code Section 162(m), other measures of performance selected by the Administrator.

 

2

 

VITAE PHARMACEUTICALS, INC.

2014 EQUITY INCENTIVE PLAN

NOTICE OF STOCK OPTION GRANT

 

You have been granted the following option to purchase shares of the common stock of Vitae Pharmaceuticals, Inc. (the “Company”):

 

	
Name of Optionee:
    	
 
    	
«Name»
    
	
 
    	
 
    	
 
    
	
Total   Number of Shares:
    	
 
    	
«TotalShares»
    
	
 
    	
 
    	
 
    
	
Type   of Option:
    	
 
    	
«ISO» Incentive Stock Option
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
«NSO»Nonstatutory Stock Option
    
	
 
    	
 
    	
 
    
	
Exercise   Price per Share:
    	
 
    	
$«PricePerShare»
    
	
 
    	
 
    	
 
    
	
Date of Grant:
    	
 
    	
«DateGrant»
    
	
 
    	
 
    	
 
    
	
Vesting Commencement Date:
    	
 
    	
«VestDay»
    
	
 
    	
 
    	
 
    
	
Vesting Schedule:
    	
 
    	
This option vests and becomes exercisable with respect to the first «CliffPercent»% of the shares subject to this   option when you complete «CliffPeriod»   months of continuous “Service” (as defined in the Stock Option Agreement to   which this Notice of Stock Option Grant is attached) from the Vesting   Commencement Date. Thereafter, this option vests and becomes exercisable with   respect to an additional «Percent»% of   the shares subject to this option when you complete each additional «IncrementPeriod» month of continuous   Service.
    
	
 
    	
 
    	
 
    
	
Expiration   Date:
    	
 
    	
«ExpDate». This option expires earlier if your   Service terminates earlier, as described in the Stock Option Agreement, and   may terminate earlier in connection with certain corporate transactions as   described in Article 9 of the Plan.
    

 

You and the Company agree that this option is granted under and governed by the terms and conditions of the Company’s 2014 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement, both of which are attached to, and made a part of, this document.

 

You further agree to accept by email all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements).  You also agree that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company.  If the Company posts these documents on a website, it will notify you by email.

 

You further agree to comply with the Company’s Insider Trading Policy when selling shares of the Company’s common stock.

 

	
OPTIONEE
    	
 
    	
VITAE   PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    

 

 

VITAE PHARMACEUTICALS, INC.

2014 EQUITY INCENTIVE PLAN

 

STOCK OPTION AGREEMENT

 

	
Grant   of Option
    	
 
    	
Subject   to all of the terms and conditions set forth in the Notice of Stock Option   Grant, this Stock Option Agreement (the “Agreement”) and the Plan, the   Company has granted you an option to purchase up to the total number of   shares specified in the Notice of Stock Option Grant at the exercise price   indicated in the Notice of Stock Option Grant.

 

All   capitalized terms used in this Agreement shall have the meanings assigned to   them in this Agreement, the Notice of Stock Option Grant or the Plan.

 

For   all purposes applicable to this option, “Service” means your continuous   service as an Employee, Consultant or Outside Director.
    
	
 
    	
 
    	
 
    
	
Tax   Treatment
    	
 
    	
This   option is intended to be an incentive stock option under Section 422 of   the Code or a nonstatutory stock option, as provided in the Notice of Stock   Option Grant. However, even if this option is designated as an incentive   stock option in the Notice of Stock Option Grant, it shall be deemed to be a   nonstatutory stock option to the extent it does not qualify as an incentive   stock option under federal tax law, including under the $100,000 annual   limitation under Section 422(d) of the Code.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
This   option vests and becomes exercisable in accordance with the vesting schedule   set forth in the Notice of Stock Option Grant.

 

In   no event will this option vest or become exercisable for additional shares   after your Service has terminated for any reason.
    
	
 
    	
 
    	
 
    
	
Term
    	
 
    	
This   option expires in any event at the close of business at Company headquarters   on the day before the 10th anniversary of the Date of   Grant, as shown in the Notice of Stock Option Grant. (This option will expire   earlier if your Service terminates, as described below, and this option may   be terminated earlier as provided in Article 9 of the Plan.)
    
	
 
    	
 
    	
 
    
	
Termination   of Service
    	
 
    	
If   your Service terminates for any reason, this option will expire immediately   to the extent the option is unvested as of your termination date and does not   vest as a result of your termination of Service. The Company determines when   your Service terminates for all purposes of this option.
    
	
 
    	
 
    	
 
    
	
Regular   Termination
    	
 
    	
If   your Service terminates for any reason except death or total and permanent   disability, then this option, to the extent vested as of your termination   date, will expire at the close of business at Company
    

 

 

	
 
    	
 
    	
headquarters   on the date three months after your termination date.
    
	
 
    	
 
    	
 
    
	
Death
    	
 
    	
If   you die before your Service terminates, then this option will expire at the   close of business at Company headquarters on the date 12 months after the   date of death.
    
	
 
    	
 
    	
 
    
	
Disability
    	
 
    	
If   your Service terminates because of your total and permanent disability, then   this option will expire at the close of business at Company headquarters on   the date 12 months after your termination date.

 

For   all purposes under this Agreement, “total and permanent disability” means   that you are unable to engage in any substantial gainful activity by reason   of any medically determinable physical or mental impairment which can be   expected to result in death or which has lasted, or can be expected to last,   for a continuous period of not less than one year.
    
	
 
    	
 
    	
 
    
	
Leaves   of Absence and Part-Time Work
    	
 
    	
For   purposes of this option, your Service does not terminate when you go on a   military leave, a sick leave or another bona fide   leave of absence, if the leave was approved by the Company in writing and if   continued crediting of Service is required by applicable law, the Company’s   leave of absence policy, or the terms of your leave. However, your Service   terminates when the approved leave ends, unless you immediately return to   active work. 

 

If   you go on a leave of absence, then the vesting schedule specified in the   Notice of Stock Option Grant may be adjusted in accordance with the Company’s   leave of absence policy or the terms of your leave. If you commence working   on a part-time basis, the Company may adjust the vesting schedule so that the   rate of vesting is commensurate with your reduced work schedule.
    
	
 
    	
 
    	
 
    
	
Notice Concerning Incentive Stock Option Treatment
    	
 
    	
Even   if this option is designated as an incentive stock option in the Notice of   Stock Option Grant, it ceases to qualify for favorable tax treatment as an   incentive stock option to the extent that it is exercised: (a) more than   three months after the date when you cease to be an Employee for any reason   other than death or permanent and total disability (as defined in Section 22(e)(3) of   the Code), (b) more than 12 months after the date when you cease to be   an Employee by reason of permanent and total disability (as defined in   Section 22(e)(3) of the Code) or (c) more than three months   after the date when you have been on a leave of absence for three months,   unless your reemployment rights following such leave were guaranteed by   statute or by contract.
    
	
 
    	
 
    	
 
    
	
Restrictions   on Exercise
    	
 
    	
The   Company will not permit you to exercise this option if the issuance of shares   at that time would violate any law or regulation.
    

 

2

 

	
 
    	
 
    	
 
    
	
Notice   of Exercise
    	
 
    	
When   you wish to exercise this option, you must notify the Company by filing the   proper “Notice of Exercise” form at the address given on the form or, if the   Company has designated a brokerage firm to administer the Plan, you must   notify such brokerage firm in the manner such brokerage firm requires. Your   notice must specify how many shares you wish to purchase. The notice will be   effective when the Company receives it. 

 

However,   if you wish to exercise this option by executing a same-day sale (as   described below), you must follow the instructions of the Company and the   broker who will execute the sale. 

 

If   someone else wants to exercise this option after your death, that person must   prove to the Company’s satisfaction that he or she is entitled to do so. 

 

You   may only exercise your option for whole shares.
    
	
 
    	
 
    	
 
    
	
Form of   Payment
    	
 
    	
When   you submit your notice of exercise, you must include payment of the option   exercise price for the shares that you are purchasing. To the extent   permitted by applicable law, payment may be made in one (or a combination of   two or more) of the following forms:

 

·                                          By delivering   to the Company your personal check, a cashier’s check or a money order, or   arranging for a wire transfer.

 

·                                          By delivering   to the Company certificates for shares of Company stock that you own, along   with any forms needed to effect a transfer of those shares to the Company.   The value of the shares, determined as of the effective date of the option   exercise, will be applied to the option exercise price. Instead of   surrendering shares of Company stock, you may attest to the ownership of   those shares on a form provided by the Company and have the same number of   shares subtracted from the option shares issued to you.

 

·                                          By giving to   a securities broker approved by the Company irrevocable directions to sell   all or part of your option shares and to deliver to the Company, from the   sale proceeds, an amount sufficient to pay the option exercise price and any   withholding taxes. (The balance of the sale proceeds, if any, will be   delivered to you.) The directions must be given in accordance with the   instructions of the Company and the broker. This exercise method is sometimes   called a “same-day sale.”
    
	
 
    	
 
    	
 
    
	
Withholding   Taxes
    	
 
    	
You   will not be allowed to exercise this option unless you make arrangements   acceptable to the Company to pay any withholding taxes that may be due as a   result of the option exercise. These arrangements include payment in cash.   With the Company’s consent, these arrangements may also include   (a) payment from the proceeds of the sale of shares through a   Company-approved broker, (b) withholding shares of
    

 

3

 

	
 
    	
 
    	
Company   stock that otherwise would be issued to you when you exercise this option   with a fair market value no greater than the minimum amount required to be   withheld by law, (c) surrendering shares that you previously acquired   with a fair market value no greater than the minimum amount required to be withheld   by law, or (d) withholding cash from other compensation. The fair market   value of withheld or surrendered shares, determined as of the date when taxes   otherwise would have been withheld in cash, will be applied to the   withholding taxes.
    
	
 
    	
 
    	
 
    
	
Restrictions   on Resale
    	
 
    	
You   agree not to sell any option shares at a time when applicable laws, Company   policies or an agreement between the Company and its underwriters prohibit a   sale. This restriction will apply as long as your Service continues and for   such period of time after the termination of your Service as the Company may   specify.
    
	
 
    	
 
    	
 
    
	
Transfer   of Option
    	
 
    	
Prior   to your death, only you may exercise this option. You cannot transfer or   assign this option. For instance, you may not sell this option or use it as   security for a loan. If you attempt to do any of these things, this option   will immediately become invalid. You may, however, dispose of this option in   your will or by means of a written beneficiary designation; provided,   however, that your beneficiary or a representative of your estate   acknowledges and agrees in writing in a form reasonably acceptable to the   Company, to be bound by the provisions of this Agreement and the Plan as if   such beneficiary of the estate were you. 

 

Regardless   of any marital property settlement agreement, the Company is not obligated to   honor a notice of exercise from your former spouse, nor is the Company   obligated to recognize your former spouse’s interest in your option in any   other way.
    
	
 
    	
 
    	
 
    
	
Retention   Rights
    	
 
    	
Your   option or this Agreement does not give you the right to be retained by the   Company, a Parent, Subsidiary, or an Affiliate in any capacity. The Company   and its Parents, Subsidiaries, and Affiliates reserve the right to terminate   your Service at any time, with or without cause.
    
	
 
    	
 
    	
 
    
	
Stockholder   Rights
    	
 
    	
You,   or your estate or heirs, have no rights as a stockholder of the Company until   you have exercised this option by giving the required notice to the Company,   paying the exercise price, and satisfying any applicable withholding taxes.   No adjustments are made for dividends or other rights if the applicable   record date occurs before you exercise this option, except as described in   the Plan.
    
	
 
    	
 
    	
 
    
	
Recoupment   Policy
    	
 
    	
This   option, and the shares acquired upon exercise of this option, shall be   subject to any Company recoupment policy in effect from time to time.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
In   the event of a stock split, a stock dividend or a similar change in Company   stock, the number of shares covered by this option and the exercise price per   share will be adjusted pursuant to the Plan.
    

 

4

 

	
Effect   of Significant Corporate Transactions
    	
 
    	
If   the Company is a party to a merger, consolidation, or certain change in   control transactions, then this option will be subject to the applicable   provisions of Article 9 of the Plan.
    
	
 
    	
 
    	
 
    
	
Applicable   Law
    	
 
    	
This   Agreement will be interpreted and enforced under the laws of the State of   Delaware (without regard to its choice-of-law provisions).
    
	
 
    	
 
    	
 
    
	
The   Plan and Other Agreements
    	
 
    	
The   text of the Plan is incorporated in this Agreement by reference.

 

This   Plan, this Agreement and the Notice of Stock Option Grant constitute the   entire understanding between you and the Company regarding this option. Any prior   agreements, commitments or negotiations concerning this option are   superseded. This Agreement may be amended only by another written agreement   between the parties.
    

 

BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

 

5EXHIBIT 4.8

UPLAND SOFTWARE, INC. RESTRICTED STOCK AGREEMENT
THIS RESTRICTED STOCK AGREEMENT (this “Agreement”), dated as of November
,  2014,  is  entered  into  by  and  between  Upland  Software,  Inc.,  a  Delaware  corporation (“Company”), and Craig MacInnis (the “Executive”), Karen Smiley-MacInnis (“Karen”), and John David MacInnis (“John” and, together with the Executive and Karen, the “Stockholders” and each a “Stockholder”) (the Stockholders together with the Company, collectively the “Parties” and each, individually, a “Party”).
RECITALS
WHEREAS concurrently with the execution of this Agreement, Company, Solution Q Inc. (“Solution Q”), Upland Software Inc. (the “Buyer”), Michael Stork, as Representative, and the Shareholders of Solution Q, are entering into a Share Purchase Agreement (the “Purchase Agreement”). Capitalized terms that are used herein but not defined shall have the meanings ascribed to them in the Purchase Agreement.
WHEREAS the Stockholders, as shareholders of Solution Q, are selling their shares in the capital of Solution Q to the Buyer pursuant to the terms of the Purchase Agreement.
WHEREAS a portion of the consideration payable to the Stockholders in connection with the sale of their shares in Solution Q is in the form of an aggregate of 34,385 shares of the Company’s Common Stock (the “Stock Consideration”) and is allocated as follows: (i) 6,189 shares of the Company’s Common Stock to the Executive, (ii) 7,221 shares of the Company’s Common Stock to Karen, and (iii) 20,975 shares of the Company’s Common Stock to John, which shall be issued and delivered pursuant to the Purchase Agreement and shall be subject to the terms and conditions contained herein.
WHEREAS, as a material inducement for the Company and the Buyer to enter into the Purchase Agreement and consummate the transactions contemplated therein (i) the Executive has agreed to become an employee of the Company (or a subsidiary of the Company) as of the Closing Date pursuant to an executive employment agreement dated on or about the date hereof (the “Executive Agreement”); and (ii) the Stockholders have agreed to enter into this Agreement and agree to the terms set forth herein.
WHEREAS in connection with the purchase and sale of the shares of Solution Q, the Company will also issue an aggregate of 32,785 shares of the Company’s Common Stock (the “Founder Shares”) and allocated as follows: (i) 5,901 shares of the Company’s Common Stock to the Executive, (ii) 6,885 shares of the Company’s Common Stock to Karen, and (iii) 19,999 shares of the Company’s Common Stock to John, which shall be issued and delivered pursuant to the Purchase Agreement and shall be subject to the terms and conditions contained herein.

AGREEMENT
NOW THEREFORE, for valuable consideration, the receipt whereof is hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
		
	1.
	Certain Definitions.

“Cause” shall mean any action or inaction by the Executive which would constitute “cause” or justification for termination of the Executive’s employment by the Company or subsidiary of the Company, as the case may be, without notice under applicable common law in the Province of Ontario.
“Disability” shall mean that the Executive, at the time notice is given, has been unable to substantially perform his duties under the Executive Agreement for not less than one-hundred and twenty (120) work days within a twelve (12) consecutive month period as a result of his incapacity due to a physical or mental condition and, if reasonable accommodation is required by law, after any reasonable accommodation.
“Forfeiture Obligations” shall mean the requirement that the Founder Shares be forfeited and promptly surrendered to the Company for no additional consideration upon: (i) voluntary resignation by the Executive from his employment by the Company or a subsidiary of the Company, as the case may be; or (ii) a termination of the Executive’s employment by the Company or a subsidiary of the Company, as the case may be, for Cause.
“Securities Act” shall mean the U.S. Securities Act of 1933, as amended.
		
	2.
	Founder Shares Forfeiture Obligations.

(a)Subject to Sections 2(b), 2(c), 2(d), and 2(e), 100% of the Founder Shares shall be released from the Forfeiture Obligations and delivered by the Escrow Holder to the Stockholders (according to their respective ownership interest) on the date that is twenty-four (24) months following the Closing Date.
(b)Notwithstanding anything to the contrary herein, in the event of the death or Disability of the Executive, or termination of the Executive’s employment by the Company or a subsidiary of the Company, as the case may be, without Cause, 100% of the Founder Shares shall be released from the Forfeiture Obligations and delivered by the Escrow Holder to the Stockholders (according to their respective ownership interest) or to the estate or personal representative of a Stockholder, as the case may be; provided, however, that any such Founder Shares shall remain subject to any applicable securities laws or other lock-up restrictions to which the Stockholders are subject under this Agreement.
(c)Immediately upon the termination of the Executive’s employment by the Company or subsidiary of the Company, as the case may be, for Cause, 100% of the Founder Shares will be forfeited by the Stockholders and automatically surrendered to the Company for no additional consideration and the Stockholders will have no further rights to the Founder Shares.

(d)Immediately upon the voluntary resignation by the Executive from his employment by the Company or a subsidiary of the Company, as the case may be, 100% of the Founder Shares will be forfeited by the Stockholders and automatically surrendered to the Company for no additional consideration and the Stockholders will have no further rights to the Founder Shares.
(e)Notwithstanding anything to the contrary herein, in the event that the shares of the Company’s Common Stock cease to be publicly traded for any reason or in the event that all of the shares of the Company are acquired by one Person or a group of related Persons, 100% of the Founder Shares shall be released from the Forfeiture Obligations and delivered by the Escrow Holder to the Stockholders (according to their respective ownership interest).
		
	3.
	Release of Stock Consideration

(a)    Subject to Sections 3(b) and 3(c), 50% of the Stock Consideration shall be released from escrow and delivered by the Escrow Holder to the Stockholders (according to their respective ownership interest) on the date that is six (6) months following the Closing Date, and the remaining 50% of the Stock Consideration shall be released from escrow and delivered to the Stockholders (according to their respective ownership interest) by the Escrow Holder on the date that is twenty-four (24) months following the Closing Date.
(b)    Notwithstanding anything to the contrary herein, in the event of the death or Disability of the Executive, 100% of the Stock Consideration shall then be released from escrow and delivered by the Escrow Holder to the Stockholders (according to their respective ownership interest) or to the estate or personal representative of a Stockholder, as the case may be; provided, however, that any such Stock Consideration shall remain subject to any applicable securities laws or other lock-up restrictions to which the Stockholders are subject under this Agreement.
(c)    Notwithstanding anything to the contrary herein, in the event that the shares of the Company’s Common Stock cease to be publicly traded for any reason or in the event that all of the shares of the Company are acquired by one Person or a group of related Persons, 100% of the Stock Consideration shall be released from escrow and delivered by the Escrow Holder to the Stockholders (according to their respective ownership interest).
(d)    The Parties acknowledge and agree that the Stock Consideration and the release thereof by the Escrow Holder shall not be subject to the Forfeiture Obligations or the employment or continued employment of the Executive by the Company or a subsidiary of the Company, as the case may be, in any circumstances whatsoever. For greater certainty, the Stock Consideration shall be released by the Escrow Holder on the dates or in the circumstances set out in Sections 3(a) and 3(b), regardless of whether or not the Executive remains employed by the Company or a subsidiary of the Company, as the case may be.
		
	4.
	Lock-Up Period.

(a)    Each Stockholder hereby agrees that he/she shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any of the shares of Common Stock (or other securities) of the Company or enter into any

swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any shares of Common Stock (or other securities) of the Company held by such Stockholder for a period specified by the representative of the underwriters of Common Stock of the Company not to exceed one hundred and eighty (180) days following the Closing Date (or such other period as may be requested by the Company or the underwriters to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or any successor provisions or amendments thereto).
(b)    Each Stockholder agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the representative of the underwriters of Common Stock of the Company which are consistent with the foregoing or which are necessary to give further effect thereto. The obligations described in this Section 4 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing restriction until the end of said one hundred and eighty (180) day (or other) period. Each Stockholder agrees that any transferee of any portion of the Founder Shares, Stock Consideration or shares acquired pursuant to the Founder Shares or Stock Consideration shall be bound by this Section 4.
		
	5.
	Tax Consequences.

Each Stockholder has reviewed with his/her own tax advisors the federal, state, local and foreign tax consequences of the transactions contemplated by this Agreement. Each Stockholder is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Each Stockholder understands that he/she (and not the Company) shall be responsible for his tax liability that may arise as a result of the transactions contemplated by this Agreement.
		
	6.
	Restriction on Transfer.

Except for the escrow described in Section 7, none of the Founder Shares or any beneficial interest therein shall be transferred, encumbered or otherwise disposed of in any way until the release of such Founder Shares from the Forfeiture Obligations in accordance with the provisions of this Agreement. Any distribution or delivery to be made to any Stockholder under this Agreement shall, if the Stockholder is then deceased, be made to the Stockholder’s designated beneficiary, or if no beneficiary survives the Stockholder, to the administrator or executor of the Stockholder’s estate. Any such transferee must furnish the Company with (a) written notice of his or her status as transferee, and (b) evidence satisfactory to the Company to establish the validity of the transfer and compliance with any laws or regulations pertaining to said transfer.
		
	7.
	Escrow of Stock Consideration and Founder Shares.

(a)    To provide for the retention of the Stock Consideration and to ensure the availability for delivery of the Founder Shares in the event of forfeiture to the Company, the Stockholders will, upon execution of this Agreement, deliver and deposit (or direct such Stock Consideration and Founder Shares to be delivered and deposited) with an escrow holder designated

by the Company (the “Escrow Holder”) the share certificates representing the Stock Consideration and Founder Shares, together with, in the case of the Founder Shares only, the Assignment Separate from Certificate (the “Stock Assignment”) duly endorsed in blank, in the form attached hereto as Exhibit A-1. The Stock Consideration and the Founder Shares and Stock Assignment shall be held by the Escrow Holder, pursuant to the Joint Escrow Instructions of the Company and the Stockholders in the form attached hereto as Exhibit A-2, until the release of: (i) the Founder Shares at such time as the Forfeiture Obligations expire, as contemplated in Section 2; and (ii) the Stock Consideration on the dates and in the circumstances contemplated in Section 3.
(b)    The Escrow Holder shall not be liable for any act it may do or omit to do with respect to holding the Stock Consideration and Founder Shares in escrow and while acting in good faith and in the exercise of its judgment.
(c)    Subject to the terms hereof, each Stockholder shall have all the rights of a shareholder with respect to the Stock Consideration and Founder Shares while such shares are held in escrow, including without limitation, the right to vote the Stock Consideration and Founder Shares and receive any cash dividends declared thereon.
		
	8.
	Restrictive Legends and Stop-Transfer Orders.

(a)    The Stockholders understand and agree that the Company shall cause the legend set forth below or a legend substantially equivalent thereto, to be placed upon any certificate(s) evidencing ownership of the Founder Shares together with any other legends that may be required by the Company or by state or federal securities laws:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR A PERIOD OF TIME AS SET FORTH IN A RESTRICTED STOCK AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER PRIOR TO THE EXPIRATION OF SUCH PERIOD WITHOUT THE CONSENT OF THE COMPANY OR THE MANAGING UNDERWRITER.
(b)    The Stockholders agree that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.
(c)    The Company shall not be required (i) to transfer on its books any Founder Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Founder Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Founder Shares shall have been so transferred.

		
	9.
	Notices.

Any notice, demand or request required or permitted to be given by either the Company or the Stockholders pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally or deposited in the U.S. mail or Canada Post, First Class with postage prepaid, and addressed to the applicable Party at the address of such Party set forth at the end of this Agreement or such other address as a Party may request by notifying the other in writing. Any notice to the Escrow Holder shall be sent to the Company’s address with a copy to the other Parties not sending the notice.
		
	10.
	No Waiver.

Any Party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that Party from thereafter enforcing each and every other provision of this Agreement. The rights granted the Parties herein are cumulative and shall not constitute a waiver of any Party’s right to assert all other legal remedies available to it under the circumstances.
		
	11.
	Successors and Assigns.

The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon the Stockholders and his or her heirs, executors, administrators, successors and assigns. The rights and obligations of the Stockholders under this Agreement may only be assigned with the prior written consent of the Company.
		
	12.
	Additional Documents.

The Stockholders agree upon request to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement.
		
	13.
	Counterparts.

This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties, it being understood that the Parties need not sign the same counterpart. The exchange of a fully executed Agreement (in counterparts or otherwise) by electronic transmission in .PDF format or by facsimile shall be sufficient to bind the Parties to the terms and conditions of this Agreement.
		
	14.
	Governing Law; Severability.

This Agreement is governed by the internal substantive laws, but not the choice of law rules, of Delaware. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect.

		
	15.
	Entire Agreement.

This Agreement, the Purchase Agreement and the Executive Agreement (including the exhibits referenced herein and therein) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Stockholders with respect to the subject matter hereof, and may not be modified adversely to the Stockholders’ interests except by means of a writing signed by the Company and the Stockholders.
(Signature page(s) to follow.)

IN WITNESS WHEREOF, each of the Parties has caused this Restricted Stock Agreement to be duly executed and delivered in its name and on its behalf as of the date first above written.
	
	
	“Company”

	 

	UPLAND SOFTWARE, INC.

	 

	/s/ John T. McDonald

	By

	 

	John T. McDonald

	Print Name

	 

	Chief Executive Officer

	Title

	 

	“STOCKHOLDERS”

	 

	/s/ Craig MacInnis

	 

	/s/ Karen Smiley-MacInnis

	Karen Smiley-MacInnis

	 

	/s/ John David MacInnis

	John David MacInnis

EXHIBIT A-1
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR  VALUE  RECEIVED  I,____________________________________, hereby sell, assign and transfer  unto  Upland  Software,  Inc._________________shares of the Common Stock of Upland Software, Inc. standing in my name on the books of said corporation represented. by Certificate No.______________herewith and do hereby irrevocably constitute and appoint ____to  transfer  the  said  stock on the books of the within named corporation with full power of substitution in the premises.
This Assignment Separate from Certificate may be used only in accordance with the Restricted Stock Agreement between Upland Software, Inc., Craig MacInnis, Karen Smiley­ MacInnis, and John David MacInnis dated November       , 2014 (the "Agreement").

	
					
	Dated:
	 
	 
	Signature:
	/s/ Craig  MacInnis

INSTRUCTIONS: Please do not fill in any blanks other than the signature line.

EXHIBIT A-1

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR  VALUE  RECEIVED  I,____________________________________, hereby sell, assign and transfer  unto  Upland  Software,  Inc._________________shares of the Common Stock of Upland Software, Inc. standing in my name on the books of said corporation represented. by Certificate No.______________herewith and do hereby irrevocably constitute and appoint ____to  transfer  the  said  stock on the books of the within named corporation with full power of substitution in the premises.

This Assignment Separate from Certificate may be used only in accordance with the Restricted Stock Agreement between Upland Software, Inc., Craig MacInnis, Karen Smiley­ MacInnis, and John David MacInnis dated November _____, 2014 (the "Agreement").

	
					
	Dated:
	 
	 
	Signature:
	/s/ Karen Smiley-MacInnis

                                                

INSTRUCTIONS: Please do not fill in any blanks other than the signature line.

EXHIBIT A-1

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR  VALUE  RECEIVED  I,____________________________________, hereby sell, assign and transfer  unto  Upland  Software,  Inc._________________shares of the Common Stock of Upland Software, Inc. standing in my name on the books of said corporation represented. by Certificate No.______________herewith and do hereby irrevocably constitute and appoint ____to  transfer  the  said  stock on the books of the within named corporation with full power of substitution in the premises.

This Assignment Separate from Certificate may be used only in accordance with the Restricted Stock Agreement between Upland Software, Inc., Craig MacInnis, Karen Smiley­ MacInnis, and John David MacInnis dated November _____, 2014 (the "Agreement").

	
					
	Dated:
	 
	 
	Signature:
	/s/ John David MacInnis

INSTRUCTIONS: Please do not fill in any blanks other than the signature line.

EXHIBIT A-2
JOINT ESCROW INSTRUCTIONS
__________________,______

Chief Financial Officer Upland Software, Inc. 401 Congress Ave.
Suite 1850
Austin, TX 78701

Dear___________________:
As Escrow Holder, acting as agent for both Upland Software, Inc. (the “Company”), and the undersigned holders of stock of the Company (the “Stockholders”), you are hereby authorized and directed to hold and thereafter to release and deliver the documents delivered to you pursuant to the terms of that certain Restricted Stock Agreement (the “Agreement”) between the Company, Craig MacInnis, Karen Smiley-MacInnis, and John David MacInnis, in accordance with the following instructions:
1.In the event the Founder Shares that are subject to Forfeiture Obligations as set forth in the Agreement are forfeited to the Company and/or any assignee of the Company (referred to collectively for convenience herein as the “Company”), the Company shall give to the Stockholders and you a written notice specifying the number of shares of stock being forfeited. The Stockholders and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.
2.At the time indicated in the notice, you are directed (a) to date the stock assignments necessary for the transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver the stock assignments, together with the certificate evidencing the shares of stock to be transferred, to the Company or its assignee.
3.The Stockholders irrevocably authorize the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any additions and substitutions to said shares as defined in the Agreement. Each Stockholder does hereby irrevocably constitute and appoint you as such Stockholder’s attorney-in-fact and agent for the term of this escrow to execute with respect to such securities all documents necessary or appropriate to make such securities negotiable and to complete any transaction herein contemplated, including but not limited to the filing with any applicable state blue sky authority of any required applications for consent to, or notice of transfer of, the securities. Subject to the provisions of this paragraph 3, each Stockholder shall exercise all rights and privileges of a stockholder of the Company while the stock is held by you.
4.Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by each of the parties hereto.

5.You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on  any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Holder or as agent or attorney-in-fact for the Stockholders while acting in good faith, and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith.
6.You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.
7.You shall not be liable in any respect on account of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder.
8.You shall not be liable for the outlawing of any rights under the Statute of Limitations with respect to these Joint Escrow Instructions or any documents deposited with you.
9.You shall be entitled to employ such legal counsel and other experts as you may deem necessary properly to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor. All costs you incur, including the cost of legal counsel and other experts, shall be the responsibility of and paid by the Company. You shall not be entitled to withhold delivery of any share certificates to the Stockholders by reason of non-payment of any of your costs by the Company.
10.Your responsibilities as Escrow Holder hereunder shall terminate if you shall cease to be an officer or agent of the Company or if you shall resign by written notice to each party. In the event of any such termination, the Company shall appoint a successor Escrow Holder and give notice therof to the Stockholders.
11.If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.
12.It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such disputes shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings.

13.Any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon personal delivery or upon deposit in the United States Post Office or Canada Post, by registered or certified mail with postage and fees prepaid, addressed to each of the other parties thereunto entitled at the following addresses or at such other addresses as a party may designate by ten (10) days advance written notice to each of the other parties hereto.
14.By signing these Joint Escrow Instructions, you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Agreement.
15.This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns.
16.These Joint Escrow Instructions shall be governed by the internal substantive laws, but not the choice of law rules, of Delaware.
(Signature page(s) to follow.)

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be duly executed and delivered in its name and on its behalf as of the date first above written.
	
	
	“Company”

	 

	UPLAND SOFTWARE, INC.

	 

	/s/ John T. McDonald

	By

	 

	John T. McDonald

	Print Name

	 

	Chief Executive Officer

	Title

	 

	“STOCKHOLDERS”

	 

	/s/ Craig MacInnis

	Craig MacInnis

	/s/ Karen Smiley-MacInnis

	Karen Smiley-MacInnis

	 

	/s/ John David MacInnis

	John David MacInnis

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00242-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00242-of-00352.parquet"}]]