Document:

Exhibit

Exhibit 10.4

	
	
	The Hershey Company
100 Crystal A Drive
Hershey, Pennsylvania  17033

	
			
	 
	 

	Notice of Award of Performance Stock Units

	 
	 

1.  EFFECTIVE DATE AND CONTINGENT TARGET AWARD.  Effective _____________ (the “Grant Date”), Grantee will be awarded __________ contingent target Performance Stock Units (“PSUs”) pursuant to the terms of this agreement.  The actual number of PSUs earned may be equal to, exceed or be less than the contingent target award, and will be based upon the Company’s attainment of the performance goals approved for the three-year performance cycle commencing in the year of the Grant Date (the “Performance Cycle”).  Each earned PSU represents the right to receive one share of Hershey Common Stock, $1.00 par value, at a future date and time, subject to the terms of this Notice of Award of Performance Stock Units (the “Notice of Award”).  

The Grantee will have forty-five (45) days to accept the terms of this Notice of Award.  By accepting the award of PSUs under this Notice of Award, Grantee accepts and agrees to: (i) these terms and conditions, (ii) the terms and conditions of The Hershey Company Equity and Incentive Compensation Plan (“EICP”), which are incorporated herein by reference, and (iii) as applicable, the terms and conditions of The Hershey Company Deferred Compensation Plan, which are incorporated herein by reference.  This award of PSUs is expressly contingent upon Grantee agreeing to the obligations contained herein.  Failure to agree to all the terms and conditions set forth herein in the form presented by The Hershey Company (“Hershey”) shall result in the PSUs being cancelled, with no benefit to Grantee.

The terms of this Notice of Award extend not only to the Grantee and Hershey, but also to Hershey’s past and present affiliated and related companies, subsidiaries, joint ventures, affiliated entities, parent companies and its and their respective successors and assigns, its and their past, present and future benefit and severance plans, including the EICP and the terms and conditions of The Hershey Company Deferred Compensation Plan, and their representatives, agents, trustees, officials, shareholders, officers, directors, employees, attorneys, benefit plan administrators and fiduciaries, both past and present, in their individual or representative capacities, and all of their successors and assigns (collectively with Hershey, the “Company ”).

2.  DEFINITIONS.  Wherever used herein, the following terms shall have the meanings set forth below.  Capitalized terms not otherwise defined in this Notice of Award shall have the same meanings as set forth in the EICP.

(A) “Business Relationships” means the Company’s relationships with customers, suppliers, agents, licensees, licensors and others that likewise give the Company a competitive advantage.

 
    (B) “Committee” means the Compensation and Executive Organization Committee of the Board of Directors.

(C)  “Competing Business” means any business, person, entity or group of business entities, regardless of whether organized as a corporation, partnership (general or limited), joint venture, association or other organization that (i) conducts or is planning to conduct a business similar to and/or in competition with any business conducted or planned by the Company and for which Grantee was employed or performed services in a job or had knowledge of the operations of such business(es) over the last two (2) years of Grantee’s employment with Hershey, or (ii) designs, develops, produces, offers for sale or sells a product or service that can be used as a substitute for or is generally intended to satisfy the same customer needs for, any one or more 

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products or services designed, developed, manufactured, produced or offered for sale or sold by the Company for which Grantee was employed or performed services in a job or had knowledge of the operations of such business(es) of the Company during the two (2) years prior to the termination of Grantee’s employment with Hershey.  Grantee acknowledges that he/she will be deemed to have such knowledge if Grantee received, was in possession of or otherwise had access to Confidential Information regarding such business.

(D) “Confidential Information” means trade secrets and other confidential and proprietary information relating to the Company’s business, including, but not limited to, information about Hershey’s manufacturing processes; manuals, recipes and ingredient percentages; engineering drawings; product and process research and development; new product information; cost information; supplier data; strategic business information; information related to Hershey’s legal strategies or legal advice rendered to Hershey; marketing, financial and business development information, plans, forecasts, reports and budgets; customer information; new product strategies, plans and project activities; and acquisition and divestiture strategies, plans and project activities.

(E) “Deferred Compensation Plan” means The Hershey Company Deferred Compensation Plan and any successor or replacement plan thereof.

(F) “Disabled” means Grantee is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.

(G) “Key Employee” means a “specified employee” under Internal Revenue Code (“Code”) section 409A(a)(2)(B)(i) (i.e., a key employee (as defined in Code section 416(i) (without regard to paragraph (5) thereof)) of a corporation any stock in which is publicly traded on an established securities market or otherwise) and applicable Treasury regulations and other guidance under Code section 409A.  Key Employees shall be determined in accordance with Code section 409A and pursuant to the methodology established by the Employee Benefits Committee.

(H) Wherever reference is made to “performance metric,” the reference is intended to refer to a Performance Goal and the performance period (the Performance Cycle or a calendar year within the Performance Cycle) over which attainment of the Performance Goal is measured.

(I) “EICP” means The Hershey Company Equity and Incentive Compensation Plan, as in effect from time to time and any successor or replacement plan thereof.

(J) A Grantee is “Retirement Eligible” on and after the date the Grantee has both attained his or her 55th birthday and been continuously employed by Hershey for at least five (5) years.

(K)  “Material Contact” means contact for the purpose of furthering the Company’s business.

(L) “Separation from Service” or “Separate from Service” means a “separation from service” within the meaning of Code section 409A.

3. VESTING DATE.  On December 31 of the final year of the Performance Cycle (the “Vesting Date”), the Grantee shall vest in the number of PSUs earned based on the Company’s actual performance during the Performance Cycle relative to each performance metric, provided that the Grantee has remained in continuous employment with the Company from the Grant Date through such date and has accepted and agreed to all terms and conditions in this agreement.  

In the event of a Change in Control, vesting of PSUs, if any, shall be determined in accordance with paragraph 15 of the EICP. In accordance with paragraph 15 of the EICP, if the PSUs are assumed or replaced, or remain outstanding, such that the PSUs as assumed, replaced or continued qualify as a Replacement Award under paragraph 15 of the EICP, the occurrence of the Change in Control shall not affect the vesting or payment of 

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the PSUs which shall then constitute a Replaced Award as defined in the EICP.  However, if within two (2) years following the Change in Control and prior to the Vesting Date, Grantee's employment is terminated by the Company for any reason other than for Cause (as defined in the EICP), by the Grantee for Good Reason (as defined in the EICP), as a result of Grantee 's death or as a result of Grantee becoming Disabled, the Grantee shall immediately vest in the Replacement Award upon such termination based on the provisions of The Hershey Company Executive Benefits Protection Plan (“EBPP”) applicable to Grantee.  Notwithstanding the foregoing, if the Committee determines that the PSUs are not replaced in connection with a Change in Control with awards meeting the requirements for Replacement Awards, the Grantee shall vest in the PSUs and receive payment in accordance with the provisions of the EBPP applicable to Grantee.  

If prior to the Vesting Date, the Grantee’s employment with the Company terminates for any reason, then the PSUs subject to this Notice of Award shall terminate and be completely forfeited on the date of such termination of the Grantee’s employment unless the Grantee is entitled to vesting with respect to the PSUs under the terms of the EICP or other Company-sponsored plan or agreement or as described in this paragraph 3 relating to a Change in Control, paragraph 4 below relating to special vesting conditions or paragraph 13(G) below relating to Foreign Nationals, in which case such vesting of the PSUs will be in accordance with the terms of this Notice of Award or the applicable plan, agreement or local law.  Notwithstanding anything in the EICP or this Notice of Award to the contrary, if the Grantee is terminated for Cause (as defined in the EICP) from the Company prior to payment pursuant to paragraph 6, all of the PSUs will immediately and automatically without any action on the part of the Grantee or the Company, be forfeited by the Grantee.

4.  SPECIAL VESTING CONDITIONS.  The Committee has determined that the following special vesting conditions shall apply to this award.

(A) If the Grantee’s employment with the Company terminates (i) as a result of the Grantee’s death or (ii) solely as a result of Grantee becoming Disabled, then the Grantee will vest immediately on the date of such termination in a prorated portion of the PSUs allocated to each performance metric in effect as of the date of employment termination and the number of PSUs earned, if any, will be determined based on Hershey’s financial statement accruals through the completed fiscal quarter immediately preceding termination of employment for each performance metric, provided, if such termination occurs during the first fiscal quarter, the number of earned PSUs will be based on the target number of PSUs allocated to each such performance metric.

(B) If the Grantee’s employment with the Company terminates (other than for Cause (as defined in the EICP)) when the Grantee is Retirement Eligible, then the Grantee will vest upon the Vesting Date in a prorated portion of the PSUs allocated to each performance metric and the number of PSUs earned, if any, will be based on Hershey’s actual performance during the Performance Cycle for each performance metric. 

(C) The prorated portion of the earned PSUs allocated to each performance metric, determined as described in paragraphs 4(A) and 4(B) above, shall be equal to the number of PSUs allocated at the start of the Performance Cycle to such performance metric multiplied by a fraction, the numerator of which equals the number of full and partial calendar months during the performance period (the Performance Cycle or a calendar year within the Performance Cycle, as applicable) for such performance metric preceding the date of the Grantee’s termination and the denominator of which equals the number of months in the performance period for such performance metric.  Any fractional share resulting from such calculations shall be eliminated by rounding down to the nearest whole number for each performance metric.  Any PSUs subject to this Notice of Award in excess of the prorated amounts shall not vest pursuant to paragraph 4(A) or 4(B) but instead shall terminate and be completely forfeited as of the date of termination.

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5.  DETERMINATION OF EARNED PSUs.  The number of PSUs earned, if any, with respect to each performance metric shall be determined following the conclusion of the Performance Cycle (and, if applicable, any performance period ending in the Performance Cycle), based upon achievement against the applicable Performance Goals. Any fractional share resulting from such calculations shall be eliminated by rounding to the nearest whole number for each performance metric. The determination of earned PSUs and the prorated amounts under paragraph 4(A) and 4(C) in the event of Grantee’s termination due to death or becoming Disabled will be made within 60 days following such termination.  The final determination of the number of PSUs earned is subject to review, approval and modification by the Committee. 

6.  PAYMENT OF AWARD.  Unless deferred under the Deferred Compensation Plan, earned PSUs that have vested (“Vested Units”) shall be paid in the form of a share of Common Stock, unless prohibited by applicable local law or as otherwise provided by the Committee or other applicable agreement or the EBPP, in which case the Vested Units will be paid in the cash equivalent, effective as of (A) the date the Committee approves the number of PSUs earned for the Performance Cycle (or, if earlier, the date the award vests in accordance with the provisions of paragraph 3 applicable upon a Change in Control), (B) the date of Grantee’s death, or (C) the date Grantee becomes Disabled. In the event payment is made pursuant to clause (A) above, such payment shall be made as soon as practicable following the Vesting Date and the Committee’s approval of the number of PSUs earned, but in no event later than March 15 following the calendar year in which the applicable date occurs.  In the event payment is made pursuant to clause (B) or (C) above, such payment shall be made on or before the sixtieth (60th) day following the date of the applicable event.  

Notwithstanding the foregoing, distributions due to a Separation from Service may not be made to a Key Employee before the date which is six months after the date of the Key Employee’s Separation from Service (or, if earlier, the date of death of the Key Employee).  Any payments that would otherwise be made during this period of delay as a result of the Grantee’s Separation from Service shall be accumulated and paid within fifteen (15) days after the first day of the seventh month following the Grantee’s Separation from Service (or, if earlier, on or before the first day of the third month after the Participant’s death).  
7.  NON-COMPETITION.  Grantee acknowledges that due to the nature of his/her employment with Hershey, he/she has and will have access to, contact with, and Confidential Information about the Company’s business and Business Relationships.  Grantee acknowledges that the Company has incurred considerable expense and invested considerable time and resources in developing its Confidential Information and Business Relationships, and that such Confidential Information and Business Relationships are critical to the success of the Company’s business.  Accordingly, both (i) during the term of his/her employment with Hershey, and (ii) for a period of twelve (12) months following the termination of his/her employment, Grantee, except in the performance of his/her duties to Hershey, shall not, without the prior written consent of Hershey’s Chief Human Resources Officer, directly or indirectly serve or act in a consulting, employee or managerial capacity, or engage in oversight of any person who serves or acts in a consulting, employee or managerial capacity, as an officer, director, employee, consultant, advisor, independent contractor, agent or representative of a Competing Business.  This restriction shall apply to any Competing Business that conducts business or plans to conduct business in the same or substantially similar geographic area in which Grantee was employed or, directly or indirectly, performed services for Hershey during the two years prior to his/her termination of Grantee’s employment.  Grantee acknowledges: (i) that the Company’s business is conducted throughout the United States and the world, (ii) notwithstanding the state of incorporation or principal office of Hershey, it is expected that the Company will have business activities and have valuable business relationships within its industry throughout the United States and around the world, and (iii) as part of Grantee’s responsibilities, Grantee has conducted or may conduct business throughout the United States and around the world in furtherance of the Company’s business and its relationships.  Grantee further acknowledges and understands that if he/she has any question about whether any prior position which Grantee has held at the Company over the last two (2) years subjects Grantee to specific restrictions, and will be used to identify Competing Business(es), Grantee should contact his/her Human Resource representative at Hershey. 

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8.  NON-SOLICITATION.  Grantee acknowledges that the Company has invested and will invest significant time and money to recruit and retain its employees and to develop valuable, continuing relationships with existing and prospective clients and customers of the Company.  Accordingly, recognizing that Grantee has obtained and will obtain valuable information about employees of the Company and their respective talents and areas of expertise and information about the Company’s customers, suppliers, business partners, and/or vendors and their requirements, Grantee agrees both (i) during the term of his/her employment, and (ii) for a period of twelve (12) months following his/her termination of employment, Grantee, except in the performance of his/her duties to Hershey, shall not directly or indirectly (including as an officer, director, employee, consultant, advisor, agent or representative), for himself/herself or on behalf of any other person or entity:
(A)   for any purpose that is in competition with any of the aspects of the Company’s business, solicit, take away or engage, or participate in soliciting, taking away or engaging, any current or potential customers, suppliers, agents, licensees or licensors of the Company with whom Grantee had contact while employed by Hershey, or about whom Grantee had access to Confidential Information as a result of Grantee’s employment; or
(B)   recruit, hire, or attempt to recruit or hire, or solicit or encourage to leave their employment with the Company (either directly or by assisting others), any Company employee with whom Grantee had Material Contact during the last two (2) years of Grantee’s employment with Hershey.  Notwithstanding the foregoing, this paragraph shall not be violated by (i) general advertising or solicitation not specifically targeted at employees of the Company, or (ii) actions taken by any person or entity with which Grantee is associated if Grantee is not directly or indirectly involved in any manner in the matter and has not identified such employee of the Company for recruiting or solicitation.
9.  NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.  Grantee acknowledges that due to the nature of his/her employment and the position of trust that he/she holds or will hold with Hershey, he/she will have access to, learn, be provided with, and in some cases will prepare and create for the Company, Confidential Information.  Grantee acknowledges and agrees that Confidential Information, whether or not in written form, is the exclusive property of Hershey, that it has been and will continue to be of critical importance to the business of Hershey, and that the disclosure of it will cause the Company substantial and irreparable harm.  Accordingly, Grantee will not, either during his/her employment or at any time after the termination of his/her employment with Hershey, use or disclose any Confidential Information relating to the business of the Company which is not generally available to the public.  Notwithstanding the foregoing provisions of this paragraph 9, Grantee may disclose or use any such information (i) when such disclosure or use may be required or appropriate in the good faith judgment of Grantee in the course of performing his/her duties to Hershey and in accordance with Hershey policies and procedures, (ii) when required by a court of law, by any governmental agency having supervisory authority over Grantee or the business of Hershey, or by any administrative or legislative body (including a committee thereof) with apparent jurisdiction, or (iii) with the prior written consent of Hershey’s General Counsel.  Notwithstanding anything herein to the contrary, Grantee understands and agrees that his/her obligations under this Agreement shall be in addition to, rather than in lieu of, any obligations Grantee may have under any applicable statute or at common law.
Grantee is hereby notified in accordance with the Defend Trade Secrets Act of 2016 that Grantee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.  If Grantee files a lawsuit for retaliation against Hershey for reporting a suspected violation of law, Grantee may disclose Hershey’s trade secrets to Grantee’s attorney and use the trade secret information in the court proceeding, provided Grantee files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.

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10.    ADDITIONAL RESTRICTIONS AND LIMITATIONS.

(A) To the extent that no PSUs are earned or the Grantee does not vest in any PSUs, all interest in such units and any related shares of Common Stock shall be forfeited.  The Grantee shall have no right or interest in any PSU or related share of Common Stock that is forfeited.

(B) Upon each issuance or transfer of shares of Common Stock in accordance with this Notice of Award, a number of Vested Units equal to the number of shares of Common Stock issued or transferred to the Grantee shall be extinguished and such number of Vested Units will not be considered to be held by the Grantee for any purpose.

11.  WITHHOLDING.

(A) The Company’s obligation to deliver shares of Common Stock or cash to settle the Vested Units shall be subject to the satisfaction of applicable tax withholding requirements. The Grantee may pay to the Company any applicable withholding tax due as a result of such payment. 

(B) Unless the Grantee has otherwise paid the withholding tax due, the Company shall withhold from any cash which may be paid and/or reduce the number of shares of Common Stock issued to the Grantee to satisfy the minimum applicable tax withholding requirements.

12.  OTHER LAWS.  The Company shall have the right to refuse to issue or transfer any shares under this Notice of Award if the Company acting in its absolute discretion determines that the issuance or transfer of such Common Stock might violate any applicable law or regulation.

13.  MISCELLANEOUS.

(A) This Notice of Award shall be subject to all of the provisions, definitions, terms and conditions set forth in the EICP and any interpretations, rules and regulations promulgated by the Committee from time to time, all of which are incorporated by reference in this Notice of Award.  By accepting the PSUs awarded herewith, Grantee acknowledges and agrees that the PSUs are awarded under and governed by the terms and conditions set forth in this document and in the EICP, and the Employee Confidentiality and Restrictive Covenant Agreement (or similar or successor agreement), if any, applicable to Grantee.  Any dispute or disagreement which shall arise under, as a result of, or in any way relate to the interpretation, construction or administration of the EICP or the PSUs awarded thereunder shall be determined in all cases and for all purposes by the Committee or any successor committee, and any such determination shall be final, binding and conclusive for all purposes.  In the event of any conflict between this Notice of Award and the Employee Confidentiality and Restrictive Covenant Agreement (or similar or successor agreement), if any, applicable to Grantee, this Notice of Award shall govern.  Grantee acknowledges that a remedy at law for any breach or threatened breach of this Notice of Award would be inadequate and therefore agrees that the Company shall be entitled to injunctive relief in case of any such breach or threatened breach.  Grantee acknowledges and agrees that the Company may apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief (without posting a bond or other security) in order to enforce or prevent any violation of this Notice of Award and that money damages would not be an adequate remedy.  Grantee acknowledges and agrees that a violation of this Notice of Award would cause irreparable harm to the Company.  The Company’s right to injunctive relief shall be cumulative and in addition to any other remedies available by law or equity.  If a court determines that Grantee has breached or threatened to breach this Notice of Award, Grantee agrees to reimburse the Company for all reasonable attorneys’ fees and costs incurred in enforcing its terms.  However, nothing contained herein shall be construed as prohibiting the Company from pursuing any other available remedies for a breach, which may include, but not be limited to, contract damages, lost profits and punitive damages.

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(B)  Grantee acknowledges and agrees that in addition to the relief described in paragraph 13(A), if the Committee determines, in its sole judgment, that Grantee has violated or threatened to violate the terms of this Notice of Award or the EICP, then Hershey may cancel any part of the award that has not vested.  In addition, upon the request or direction of the Committee, Grantee shall also immediately deliver to Hershey, the cash equivalent of any PSUs that have vested and been distributed to Grantee under this Notice of Award, inclusive of any dividends paid on any vested shares.

(C)  Notwithstanding anything in the EICP or this Notice of Award to the contrary, Grantee acknowledges that the Company may be entitled or required by law or Hershey policy to recoup compensation paid to Grantee pursuant to the EICP, and Grantee agrees to comply with any Company request or demand for recoupment.

(D) Grantee agrees that, at any time after Grantee’s termination of employment from Hershey, he/she will cooperate with the Company in (i) all investigations of any kind, (ii) helping to prepare and review documents and meetings with Company attorneys, and (iii) providing truthful testimony as a witness or a declarant during discovery and/or trial in connection with any present or future court, administrative, agency or arbitration proceeding involving the Company and with respect to which Grantee has relevant information

(E) If one or more of the provisions of this Notice of Award shall be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and the invalid, illegal or unenforceable provisions shall be deemed null and void; however, to the extent permissible by law, any provisions which could be deemed null and void shall first be construed, interpreted or revised retroactively to permit this Notice of Award to be construed so as to foster the intent of this award and the EICP.

(F) The PSUs are intended to comply with Code section 409A and official guidance issued thereunder.  Notwithstanding anything herein to the contrary, this Notice of Award shall be interpreted, operated and administered in a manner consistent with this intention.

(G) Notwithstanding anything herein to the contrary, in the event the Grantee:  (i) is an employee of the Company in a country other than the United States (a “Foreign National”), (ii) is not subject to the federal income tax laws of the United States (“U.S. Tax Law”) for purposes of these PSUs, and (iii) has certain rights in the vesting and payment of the PSUs upon termination of employment under the laws of the country in which Grantee is employed, the vesting and payment of any unvested PSUs will be in accordance with the terms of a severance agreement entered into between the Company and Grantee that complies with the laws of the country in which Grantee is employed or in the absence of a severance agreement, as may be required by the laws of such country; provided, however, if any PSUs, granted to such Foreign National, are subject to U.S. Tax Law, the payment of such PSUs shall be governed by the terms of this Notice of Award.

(H)  The award of PSUs and all terms and conditions related thereto, including those of the EICP, shall be governed by the laws of the Commonwealth of Pennsylvania.  Grantee expressly consents that: (i) any action or proceeding relating to a breach or the enforceability of this Notice of Award will be brought only in the federal or state courts, as appropriate, located in the Commonwealth of Pennsylvania; and (ii) any such action or proceeding will be heard without a jury.  Grantee expressly waives the right to bring any such action in any other jurisdiction and to have such action heard before a jury regardless of where such action is filed.  The EICP shall control in the event there is a conflict between the EICP and these terms and conditions.

14.  CONTACT INFORMATION.  Copies of the EICP and Information Statement (Prospectus) for the EICP are available upon request from the myHR Support Center by calling 1-800-878-0440 or by email to myHR@hersheys.com. Contact the VP, Global Total Rewards for information relating to the performance metrics.

7EX-4.1

 Exhibit 4.1 

MERUS N.V. 2010 EMPLOYEE OPTION PLAN 

As amended per 18 May 2016 
  

	1.	DEFINITIONS AND INTERPRETATIONS 

  

	1.1.	In this Plan, the following words and expressions shall have, where the context so admits, the meanings set forth below: 

  

			
	Acquirer	  	has the meaning given to it in Rule 4.1.
		
	Acquiring Company	  	has the meaning given to it in Rule 4.5.
		
	Bad Leaver	  	the Participant who is dismissed for (i) cause, as referred to in article 7:678 of the Dutch Civil Code (dringende reden voor de werkgever), or (ii) on grounds of termination or nonextension of the agreement for reasons that
can mainly be attributed to the relevant Participant concerned (as determined by a decision rendered in legal or arbitration proceedings that has become irrevocable, or a settlement agreement or another private extrajudicial agreement); or (iii) on
grounds of the provisions of article 7:685 or 6:265 and further of the Dutch Civil Code, where the reason for termination of the employment agreement or the management agreement can mainly be attributed to the relevant Participant (as determined by
a decision rendered in legal or arbitration proceedings that has become irrevocable).
		
	CEO	  	means the member of the Management Board who is the chief executive officer of the Company.
		
	Company	  	Merus B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under the laws of the Netherlands, having its corporate seat in Utrecht, the Netherlands, and its
offices at Padualaan 8, 3584 CH Utrecht, the Netherlands.
		
	Control	  	the power of a company, directly or indirectly (i) to exercise more than 50% of the voting rights at a shareholders meeting of a company, or (ii) to appoint or dismiss more than 50% of the directors of the management board or of the
members of the supervisory board of a company, or (iii) to direct the management of a company through the exercise of majority votes at directors’ meetings of such company.
		
	Date of Grant	  	the date on which an Option is granted.
		
	Date of Exercise	  	the day on which an Option is exercised.
		
	Eligible Employee	  	a person:
		
		  	 •    who is or has been employed by the Company (including functioning as
a member of the Management Board or Supervisory Board of the Company); or

			
		
		  	 •    who is a third party (advisor/consultant or otherwise) with the
prior written approval of the Management Board and the Supervisory Board.

		
	Exercise Price	  	the price per Share, as determined by the Grantor at the Date of Grant, at which an Eligible Employee may acquire a Share upon the exercise of an Option granted to him, being not less than the nominal value of the underlying Share
on the Date of Grant but subject to any adjustment pursuant to Rule 8 of this Plan.
		
	Fair Market Value	  	means the value of the underlying Share of the Company as determined during the last valuation that took place prior to the Termination Date.
		
	General Meeting of Shareholders	  	the general meeting of shareholders (algemene vergadering van aandeelhouders) of the Company.
		
	Good Leaver	  	a Participant whose employment or management agreement is terminated, either by himself or by the Company, and who is not a Bad Leaver.
		
	Grantor	  	the “Grantor” shall mean the Company.
		
	Insider Rules	  	means the internal rules concerning the dealing in securities as determined and adopted by the Company.
		
	Legal Compliance Officer	  	the legal compliance officer of the Company from time to time, which initially will be a member of the Management Board.
		
	Management Board	  	the management board (raad van bestuur) of the Company from time to time.
		
	Notice of Exercise	  	a notice to the Legal Compliance Officer in a form to be determined by the Grantor whereby a Participant notifies the Company of his wish to exercise an Option granted to him under this Plan.
		
	Option Agreement	  	the Merus B.V. 2010 Employee Option Agreement; an agreement in a form to be determined by the Grantor whereby the Grantor grants Options under this Plan.
		
	Option	  	subject to Rule 2.5 and the terms and conditions of the Plan, the non-transferable right of the Participant to, at the choice of the Grantor, acquire one Share.
		
	Participant	  	any Eligible Employee to whom an Option has been granted, or where the context so admits, his legal successor.
		
	Plan	  	the Merus B.V. 2010 Employee Option Plan as amended from time to time.

			
	Retirement	  	the cessation of employment in circumstances, which the Grantor regards as retirement (whether at normal retirement age or any other age).
		
	Rules	  	the rules of the Plan as amended from time to time.
		
	Share	  	a fully paid up common share in the capital of the Company.
		
	Supervisory Board	  	the supervisory board (raad van commissarissen) of the Company from time to time.
		
	Tax Liability	  	a liability, on the part of the Company, to account for any tax, social security or other levy in respect of an Option for which the person entitled to the Option is liable, whether by reason of grant, Vesting, exercise or
otherwise, including for the avoidance of doubt but without limitation any liability arising after termination of a Participant’s employment for whatever reason and which may arise or be incurred in any jurisdiction whatever, and by the law of
the same jurisdiction may or shall be recovered from the person entitled to the Option.
		
	Termination Date	  	the date on which a Participant ceases to hold office or employment.
		
	Tranche	  	the part of the number of Options granted under the Option Agreement that Vest in line with the vesting scheme as set out in the Option Agreement.
		
	Vest	  	the point at which an Option becomes exercisable and “Vesting” and “Vested” shall be construed accordingly.
		
	Vesting Commencement Date	  	the date on which the Vesting commences, as stipulated in the Option Agreement.
		
	Vesting Date	  	the date on which an Option or Tranches will become exercisable.

  

	1.2	Where the context so admits or requires words importing the singular shall include the plural and vice versa and words importing the masculine shall include the feminine. 

 

	1.3.	Reference in the Rules to any statutory provisions are to these provisions as amended, extended or re-enacted from time to time, and shall include any regulations made thereunder. 

 

	1.4.	The headings in the Rules are for the sake of convenience only and should be ignored when construing the Rules. 

  

	2.	GRANT OF OPTIONS 

  

	2.1.	Whether the Grantor will grant Options will be decided as follows: 

  

	 	(a)	with respect to Options to be granted to the members of the Supervisory Board , the Shareholders’ Meeting will decide. Any resolution to that effect can only be adopted with a majority of two thirds of the votes
cast in a meeting in which two third of the issued share capital of the Company is present or represented; 

	 	(b)	with respect to Options to the members of the Management Board, the Supervisory Board will decide; 

  

	 	(c)	with respect to Options to Eligible Employees who are not members of the Management Board or Supervisory Board the Management Board will decide, subject to the prior approval of the Supervisory Board. 

In case the Grantor wishes to grant Options as referred to under (a) above, the Grantor shall request a Shareholders’ Meeting to be
convened in order to adopt a resolution to that effect. 
 With respect to the Options referred to under (b) and (c) above, the
Shareholders’ Meeting has designated the Supervisory Board and the Management Board respectively thereto by resolution dated January 21, 2009. 

Subject to (a), (b) and (c) of this Rule the Grantor has a discretionary power to grant Options to such Eligible Employees as it
shall determine and to determine the conditions under which such Options are granted. 
 Subject to the Rules of this Plan a Participant
shall receive Options granted with an Exercise Price as specified in the Option Agreement. 
 Each and every grant of an Option is subject to
the Insider Rules of the Company once these have been adopted. 
  

	2.2.	The grant of an Option or the delivery of any Share following its exercise shall be subject to: 

  

	 	(a)	obtaining the required internal corporate approvals; and 

  

	 	(b)	obtaining any approval or consent required under any applicable laws, regulations of governmental authority and the requirements of any recognised stock exchange on which the Shares are traded. 

 

	2.3.	The grant of an Option shall be evidenced by an Option Agreement, sent to the Eligible Employee on behalf of the Grantor by the chairman of the Supervisory Board or by the CEO, which document may relate to an individual
Option or any number of Options granted at the same time. The Option Agreement must at least state: 

 the date of grant; 

 

	 	(a)	the number of Shares over which Options have been granted to the Participant; 

  

	 	(b)	the Exercise Price; 

  

	 	(c)	the Vesting Commencement Date and Vesting Date and/or Vesting Dates; 

  

	 	(d)	the date on which the Options will lapse pursuant to Rule 3.3(a) 

	2.4.	Subject to Rule 6 of this Plan no payment by the Participant shall be required on the grant of Options. 

  

	2.5.	Subject to the rights of exercise by the Participant’s legal successors in the event of a Participant’s death, every Option shall be personal to the Participant to whom it is granted and shall not be
transferable, in any way alienable or capable of being encumbered and may not be contributed to the net wealth of an enterprise (vermogen van een onderneming). 

 

	2.6.	The Participant can accept a grant of Options only in whole. Acceptance takes place by returning a signed copy of the Option Agreement to the Legal Compliance Officer, which should be received ultimately on the latest
moment of (1) sixty (60) days of the Date of Grant or (2) 30 Days of the date of adoption of this Plan. Grants of Options that are not accepted in accordance with this Rule 2.6, will lapse automatically with immediate effect and
without any consideration due. By accepting a grant of Options the Participant accepts the Rules of the Plan and all other regulations and documents relating to the granted Options. 

 

	3.	RIGHTS OF EXERCISE AND LAPSE OF OPTIONS 

  

	3.1.	Any Option granted to the Eligible Employee under this Plan, will Vest following the Vesting Scheme set out in the Option Agreement and furthermore in accordance with the conditions as set out in the Option Agreement.

  

	3.2.	If a Participant ceases to hold office or employment unvested Options shall lapse on the Termination Date, unless the Grantor, acting reasonably and given the specific circumstances of the Participant, determines
otherwise, in which event the Grantor in its sole discretion and acting reasonably, shall determine the extent, and the terms, of the Participant’s continued participation in the Plan. 

 

	3.3.	Vested Options shall lapse upon the occurrence of the earliest of the following events: 

  

	 	(a)	the eight (8th) anniversary of the Date of Grant; 

  

	 	(b)	the expiry of any of the periods specified in Rules 4.1, 4.3 and 4.4; 

  

	 	(c)	(for the Participant ceasing to hold an office or employment or giving or being given notice to terminate employment) on the first (1) anniversary of the Termination Date; 

 

	 	(d)	subject to Rule 4.4, the passing of an effective resolution, or the making of an order by any court, for the winding-up of the Company; 

 

	 	(e)	subject to Rule 4.3, the Participant or his legal successor being deprived of the legal or beneficial ownership of the relevant Options by operation of law or being declared bankrupt or having applied for temporary
suspension of payment (surséance van betaling), unless the Grantor in its absolute discretion determines otherwise; 

  

	 	(f)	the Participant purporting to transfer or dispose of the Options or any rights in respect of it other than as permitted under Rule 2.5; 

 

	 	(g)	On the Termination Date in the event the Participant becomes a Bad Leaver. 

	4.	TAKEOVER, RECONSTRUCTION AND WINDING-UP 

  

	4.1.	Subject to Rule 4.5, if any person or legal entity (the “Acquirer”) obtains Control of the Company as a result of making an offer to acquire the whole or part of the issued share capital of the Company
or through any other means, which is either made without any condition or which is made on a condition such that if it is satisfied the Acquirer will have Control of the Company, Options will Vest upon such acquisition of Control and may be
exercised during a period of one (1) month thereafter (or such period as the Grantor may determine). The Legal Compliance Officer shall notify Participants in writing as soon as possible and in any event with sufficient time to exercise their
Options. Such exercise of Options shall be done in accordance with any procedure set down by the Grantor. 

  

	4.2.	For the purpose of Rule 4.1 a person or legal entity shall be deemed to have obtained Control of the Company if he and others acting in concert with him have together obtained Control of it. For the purpose of this Rule
4.2 persons shall be treated as “acting in concert” if pursuant to an agreement or understanding (whether formal or informal) they actively cooperate through the acquisition by any of them of Shares to obtain Control of the Company.

  

	4.3.	Subject to Rule 4.5, if the Company or its legal successor applies for temporary suspension of payments (surséance van betaling) or in the event of a restructuring of the Company aimed at restructuring the
Company’s debts, at the sole discretion of the Grantor, the Grantor may decide that Options will immediately Vest and under what conditions. 

  

	4.4.	If a resolution of the General Meeting of Shareholders to voluntarily wind-up the Company (ontbinden) has been duly adopted, the Company shall notify all Participants. Subject to Rule 4.5, Options will Vest and
may be exercised during a period of one (1) month thereafter (or such period as the Grantor otherwise determines) and in each case conditionally on the resolution being duly passed. 

 

	4.5.	Rules 4.1, 4.3 and 4.4 above shall not apply where: 

  

	 	(a)	Control of the Company is obtained prior to the adoption of this Plan; 

  

	 	(b)	the events form part of a scheme or arrangement whereby Control of the Company is obtained by another person or company (the “Acquiring Company”); 

 

	 	(c)	immediately after the Acquiring Company obtains Control, the issued share capital of the Acquiring Company is directly or indirectly owned substantially by the same persons or companies (or their legal successors) who
were shareholders of the Company immediately prior to the Acquiring Company obtaining Control; 

  

	 	(d)	the Acquiring Company has agreed to grant new options in consideration for the release of any Options which have not lapsed or for any options on shares in the Company’s capital, and 

 

	 	(e)	the Acquiring Company obtains Control in connection to a financing of the Company, whether privately done of by means of an I PO. 

	4.6.	If the Grantor becomes aware that the Company is expected to be, or has been, affected by any demerger, dividend, dividend in specie, super dividend or other transaction which, in the opinion of the Grantor could affect
(or has affected) the current or future value of any Option, the Grantor has the discretionary power, acting reasonably, to determine new, or replace the, conditions of Vesting, or any such other terms and conditions of the Options that may be
required. 

  

	4.7.	Where Rules 4.1, 4.3 or 4.4 apply, Options shall lapse to the extent not already exercised following the expiry of any specified period. 

 

	5.	MANNER OF EXERCISE 

  

	5.1.	An Option may only be exercised by a Participant in its entirety. 

  

	5.2.	An Option may only be exercised to the extent Vested and in accordance with the conditions as set out in the Option Agreement. 

  

	5.3.	Subject to the Rules of this Plan and the Option Agreement, Options may be exercised by the receipt of a Notice of Exercise by the Legal Compliance Officer, which is completed and signed by the Participant, covering at
least all the Shares over which the Options are then to be exercised unless the Grantor determines that a different exercise procedure should apply. 

  

	5.4.	Payment of the Exercise Price must be made by the Participant in such manner and at such moment prior to the issue or transfer of the Shares as the Management Board shall direct. 

 

	5.5.	Once such rules have been adopted in accordance with Rule 2. 1, each exercise of an Option is subject to the Insider Rules of the Company as applicable from time to time. Where any exercise would temporarily be
prohibited by law, securities regulations, or the dealing or insider trading rules of or applicable to the Company, the exercise period shall be extended with the length of such period of prohibition provided that an Option may not be exercised
after the expiry of the Option in accordance with any Rule of this Plan. 

  

	6.	TAX LIABILITY 

  

	6.1.	The Participant shall be responsible for and shall indemnify the Company against any Tax Liability. Without prejudice to Rule 6.2 below, the Company may withhold any amounts from the Participant’s net pay for the
relevant pay period or make such arrangements as are necessary to satisfy any Tax Liability. 

  

	6.2.	In the event that any Tax Liability becomes due on the exercise of Options, the Participant will be deemed to have given irrevocable instructions to the Company (or any other person acceptable to the Company) for the
sale of sufficient Shares acquired on the exercise of Options to realize an amount equal to the Tax Liability and the payment of the Tax Liability to the Company, unless: 

 

	 	(a)	the Company is able to deduct an amount equal to the whole of the Tax Liability from the Participants net pay for the relevant pay period; or 

 

	 	(b)	the Participant has paid to the Company an amount equal to the Tax Liability; or 

  

	 	(c)	the Grantor determines otherwise. 

	7.	ISSUE OR TRANSFER OF SHARES 

  

	7.1.	Subject to the Rules of this Plan, including but not limited to Rule 6, and to having received the Exercise Price, the Grantor, in its sole discretion, shall decide whether the Company shall: 

 

	 	(a)	procure the issue or transfer of such number of Shares to be transferred to the Participant pursuant to the exercise of an Option; or 

 

	 	(b)	settle the Options specified in the Notice of Exercise in cash, it being understood that the default settlement mechanism will be settlement through the issue or transfer of Shares covered by the Options.

  

	7.2.	The issue or transfer of any Shares under the Plan shall be subject to obtaining any such approval or consent as is mentioned in Rule 2.2 and the Participant signing all documents relevant for the issue of Shares to the
Participant. 

  

	8.	ADJUSTMENTS 

  

	8.1.	The number of Shares over which Options are granted, the conditions of exercise and the Exercise Price thereof (and where Options have been exercised, but no Shares have been issued or transferred pursuant to such
exercise, the number of Shares which may be so issued or transferred and the price at which they may be acquired) shall be adjusted in such manner as the Grantor shall in consultation with the CEO determine following any capitalisation issue,
merger, any offer or invitation made by way of rights, subdivision, consolidation, reduction, other variation in the share capital of the Company, demerger, dividend, dividend in specie, super dividend or other corporate event which in the
reasonable opinion of the Grantor justifies such an adjustment. 

  

	8.2.	The Grantor or the Legal Compliance Officer may take such steps as it or he may consider necessary to notify Participants of any adjustment made under this Rule 8. 

 

	9.	ADMINISTRATION 

  

	9.1.	The Plan shall be administered by the Management Board, assisted by the Legal Compliance Officer should the Legal Compliance Officer not be a member of the Management Board. The Management Board shall have full
authority, consistent with the Plan, to administer the Plan, including authority to interpret and construe any provision of the Plan, to amend the Plan, to correct any errors or mistakes of procedure, and to adopt such regulations for administering
the Plan and such forms of exercise as it may deem necessary or appropriate. Decisions of the Management Board shall be final and binding on all parties. The Legal Compliance Officer will keep a register showing the number of Options granted to each
Participant, the Exercise Price related to such Options and the further conditions pursuant to which the Options are granted. Furthermore, the Legal Compliance Officer will supervise that the Plan is administered in accordance with the applicable
laws and regulations. 

  

	9.2.	 Any notice or other communication under or in connection with the Plan may be given by personal delivery or by
sending the same by electronic means or mail, in the case of a company to its registered office, and in the case of an individual to his last known 

	 	
address, or, where he is a director or employee of the Company, either to his last known address or to the address of the place of business at which he performs the whole or substantially the
whole of the duties of his office or employment, and where a notice or other communication is given by mail, it shall be deemed to have been received 72 hours after it was put into the mail properly addressed and stamped, and if by electronic means,
when the sender receives a non automatically generated electronic confirmation of receipt. 

  

	9.3.	The Company may distribute to Participants copies of any notice or document normally sent by the Company to the holders of Shares. 

  

	9.4	The costs of introducing and administering the Plan shall be borne by the Company. 

  

	10.	ALTERATIONS 

  

	10.1.	Subject to this Rule 10, the Management Board may at any time alter or add to all or any of the provisions of the Plan in any respect. Amendments other than the adjustments as set forth in Rules 4.6, 8.1 and 10.3 will
require the prior approval of the General Meeting of Shareholders and any resolution to that effect can only be adopted by two thirds of the votes cast in a meeting in which two third of the issued share capital is present or represented.

  

	10.2.	Subject to Rule 10.3 and without prejudice to Rule 10.1, the prior approval of the General Meeting of Shareholders shall in any event be required for the following alterations or additions to the material advantage of
Participants to: 

  

	 	(a)	the persons to whom Options may be granted under the Plan; 

  

	 	(b)	the principal terms of the Options; 

  

	 	(c)	the determination of the Exercise Price; 

  

	 	(d)	the rights of Participants in the event of a variation of the share capital; and 

  

	 	(e)	the terms of this Rule 10.2. 

 Any resolution to this effect can only be adopted by the General
Meeting of Shareholders with two thirds of the votes cast in a meeting in which two third of the issued share capital is present or represented. 
  

	10.3.	Approval by the General Meeting of Shareholders shall not be required for any minor alteration or addition, which is to benefit the administration of the Plan. 

 

	10.4.	Except to the extent required by law, no alteration or addition shall be made under Rule 10.1 which would materially abrogate or adversely affect the subsisting rights of a Participant unless it is made with the written
consent of the Participant so adversely affected. 

  

	10.5.	As soon as reasonably practicable after making any alteration or addition under Rule 10. 1, the Grantor or the Legal Compliance Officer shall give written notice thereof to any Participant materially affected thereby.

  

	10.6.	No alteration to the Plan under this Rule 10 shall require the consent of any person unless expressly provided by laws or regulations or in the Rules. 

	11.	LEGAL ENTITLEMENT 

  

	11.1.	The Plan shall not form part of a Participant’s employment contract or terms and conditions of employment. Furthermore, nothing in the Plan, or in any regulations pursuant to it shall confer on any person any right
to continue in employment, nor will it affect the right of any provider of any service relationship to terminate the employment of any person without liability at any time with or without cause, nor will it impose upon the Grantor or any other
person any duty or liability whatsoever (whether in contract, tort, or otherwise howsoever) in connection with: 

  

	 	(A)	the lapse of any Option pursuant to the Plan; 

  

	 	(B)	the failure or refusal to exercise any discretion under the Plan; and/or 

  

	 	(C)	a Participant ceasing to be a person who has a service relationship for any reason whatever. 

  

	11.2.	Options shall not (except as may be required by taxation law) form part of the emoluments of individuals or count as wages or remuneration for pension or other purposes. 

 

	11.3.	Nothing in the Plan shall be deemed to give any employee of the Company any right to participate in the Plan. 

  

	11.4.	Any person who ceases to have the status or relationship of an employee with the Company as a result of the termination of his employment for any reason and however that termination occurs, whether lawfully or
otherwise, shall not be entitled and shall be deemed irrevocably to have waived any entitlement by way of damages for dismissal or by way of compensation for loss of office or employment or otherwise to any sum, damages or other benefits to
compensate that person for the loss of alteration of any rights, benefits or expectations in relation to any Option, the Plan or any instrument executed pursuant to it. 

 

	12.	DATA PROTECTION 

  

	12.1.	By participating in the Plan, the Participant consents to the holding and processing of personal data provided by the Participant to the Company for all purposes relating to the operation of the Plan. These include, but
are not limited to: 

  

	 	(A)	Administering and maintaining Participant records; 

  

	 	(B)	Providing information to trustees of any employee benefit trust, registrars, brokers savings carrier or other third party administrators of the Plan; and 

 

	 	(C)	Providing information to future purchasers of the Company or the business in which the Participant works. 

  

	12.2.	By participating in the Plan, the Participant consents to the transfer of personal data to persons within the European Union and jurisdictions outside the European Union, for all purposes relating to the operation of
the Plan. 

	13.	GENERAL 

  

	13.1.	No Option may be granted, exercised, released or surrendered at a time when such grant, exercise, release or surrender would not be in accordance with applicable laws and regulations as amended from time to time.

  

	13.2.	The Plan shall terminate at the date of the passing of a resolution by the General Meeting of Shareholders to this effect. Termination of the Plan will be without prejudice to the subsisting rights of Participants.

  

	13.3.	These Rules, any Option Agreement and all Options granted shall be governed by and construed in accordance with the laws of the Netherlands. The competent court in Amsterdam, the Netherlands shall have exclusive
jurisdiction to settle any dispute in connection with this Plan or Option Agreement.

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