Document:

Exhibit 10.2

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated Employment Agreement (the “Agreement”) is effective as of June 19, 2018 (the “Effective Date”) between Onconova Therapeutics, Inc., a Delaware corporation (the “Company”) and Steven Fruchtman, M.D. (“Employee”).

 

WHEREAS, Employee is currently employed by the Company pursuant to the terms of an Amended and Restated Employment Agreement dated July 1, 2015 (the “Prior Agreement”); and

 

WHEREAS, the Company desires to continue to employ Employee and Employee desires to continue to be so employed by the Company upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the mutual promises and undertakings herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

 

1.                                      Duration of Agreement.  This Agreement is effective on the date set forth above and has no specific expiration date.  Unless terminated or amended in writing by the parties, this Agreement will govern Employee’s continued employment by the Company until that employment ceases in accordance with Section 4 hereof.

 

2.                                      Duties.  Subject to all the terms and conditions hereof, the Company shall employ Employee, and Employee shall serve the Company as President.  Employee, as President, will be invited to attend all meetings, other than non-management executive sessions, of the Board of Directors of the Company (the “Board”).  Until a permanent replacement is hired to assume Employee’s duties and responsibilities as Chief Medical Officer and/or Senior Vice President, Research and Development, or an interim replacement is hired who, following a period of time, and based on performance, assumes the responsibilities of Chief Medical Officer and/or Vice President, Research & Development, Employee also shall continue to maintain the responsibilities of Chief Medical Officer and Vice President, Research and Development, as applicable, and provide sufficient guidance to any such interim replacement in his role as President.  Employee will seek to transfer the role of Vice President, Research and Development in a commercially reasonable manner subsequent to approval of this Agreement. Employee shall report directly to the Chief Executive Officer of the Company.  As Employee’s position is a full-time position, Employee agrees to devote Employee’s effort of 100% from the Company’s Newtown, Pennsylvania office or from offsite, as appropriate, to this position and to the promotion of the business and interests of the Company.  Employee will not render any professional services or engage in any activity that might be competitive with, adverse to the best interest of, or create the appearance of a conflict of interest with the Company.  Employee agrees to abide by the policies, rules and regulations of the Company as they may be amended from time to time.  Employee may not engage in outside employment or consulting without first obtaining prior express permission from the Board.

 

3.                                      Compensation and Other Benefits.

 

(a)                                 Salary.  For all services rendered by Employee under this Agreement, the Company agrees to pay Employee a base salary at an initial annualized rate of

 

 

Five Hundred and Ten Thousand Dollars ($510,000) (the “Base Salary”), in installments in accordance with the Company’s normal payroll cycle.

 

(b)                                 Annual Bonus.  During the term of this Agreement, in addition to his other remuneration, Employee shall be eligible to receive an annual bonus (the “Bonus”), based on the performance of Employee and the Company.  The determination of such performance and the amount of the Bonus, if any, shall be at the sole discretion of the Compensation Committee (the “Compensation Committee”) of the Board but shall not exceed fifty percent (50%) of Employee’s Base Salary (the “Target Bonus”).  In the event that Employee has earned a Bonus for a particular year, such Bonus shall be paid to Employee in the form of cash, stock options, shares of the Company’s common stock (“Common Stock”), or a combination thereof, at the Compensation Committee’s discretion between January 1 and March 15 of the year following the end of such year.

 

(c)                                  Equity Awards.  Subject to approval of the Onconova Therapeutics, Inc. 2018 Omnibus Incentive Compensation Plan (the “Plan”) by the Company’s stockholders, which is expected to occur on June 27, 2018, the Company will grant Employee a stock option to purchase 300,000 shares of Common Stock pursuant to the terms of the Plan and the Company’s standard form of stock option grant agreement evidencing the terms and conditions of the grant (“Initial Option”).  The number of shares of Common Stock subject to the Initial Option will be proportionately adjusted if a reverse stock split of the Common Stock is effected before the date the Initial Option is granted.  In addition, during the term of this Agreement, Employee shall be eligible to receive an annual option award under the Plan (or its successor), based on the performance of Employee and the Company.  The determination of such performance and the number of shares subject to any such stock option shall be at the sole discretion of the Compensation Committee.

 

(d)                                 Signing Bonus.  The Company shall pay Employee a signing bonus in the aggregate amount of Two Hundred Thousand Dollars ($200,000) (the “Signing Bonus”).  The Signing Bonus will be paid in a lump sum immediately upon execution of this Agreement.  Employee will be required to repay the full amount of the Signing Bonus if, prior to the first anniversary of the Effective Date, Employee’s employment terminates for any reason other than (i) by Employee in accordance with 4(d) below, (ii) by the Company without Cause (as defined below), (iii) by Employee for Good Reason (as defined below), (iv) upon the Employee’s death or (v) by the Company due to Employee’s Disability (as defined below).

 

(e)                                  Employee Benefits.  During the term of this Agreement, Employee shall be entitled to participate in any employee benefit plans or programs of the Company that are made generally available from time to time by the Company to similarly situated employees, including but not limited to health insurance, a flexible spending account, and 401(k) participation.  Nothing in this Agreement shall preclude the Company or any affiliate of the Company from terminating or amending any employee benefit plan or program from time to time after the Effective Date.

 

(f)                                   Vacation and Holidays.  During Employee’s employment hereunder, Employee shall be entitled each year to four (4) weeks of vacation, and to those

 

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holidays observed by the Company.  Vacation shall be taken by Employee at such time or times as are mutually convenient to Employee and the Company.

 

(g)                                  Reimbursement of Expenses.  The Company shall provide or reimburse Employee for a smart phone to use for Company business.  In addition, the Company shall reimburse Employee for all reasonable expenses incurred by Employee in connection with his employment hereunder provided, however, that such expenses were incurred in conformance with the policies of the Company, as established from time to time, and that Employee submits detailed vouchers and other records reasonably required by the Company in support of the amount and nature of such expense.  Expenses for a car service or a rented car from and to the Princeton Junction or Hamilton train stations to the Onconova Office will be reimbursed or provided.

 

(h)                                 Taxes and Withholding.  All compensation payable and other benefits provided under this Agreement shall be subject to customary and legally required withholding for income, F.I.C.A., and other employment taxes.  Employee shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement.

 

(i)                                     Attorneys’ Fees.  The Company shall pay or reimburse Employee up to $10,000 for reasonable attorneys’ fees incurred by Employee in connection with the review, negotiation and documentation of this Agreement, within thirty (30) days following presentation of appropriate receipts for such fees.

 

4.                                      Termination of Employment.

 

(a)                                 Death of Employee.  If Employee dies during the term of this Agreement, this Agreement shall terminate immediately and the Company shall pay to Employee’s then-current spouse, if she survives him, or if not, to his estate, the balance of his accrued and unpaid Base Salary, unreimbursed expenses, and his unused accrued vacation time through the termination date.

 

(b)                                 Disability of Employee.  If Employee is unable to perform his full-time regular duties by reason of incapacity, either physical or mental, for a period of twelve (12) consecutive weeks or ninety (90) days within any twelve (12) month period (“Disability”), the Company shall have the right to terminate Employee’s employment upon written notice to Employee.  If the Company decides to terminate Employee’s employment under this Section 4(b), the Company shall pay to Employee only the balance of his accrued and unpaid Base Salary, unreimbursed expenses, and his unused, accrued vacation time through the termination date.  If the Company decides not to terminate Employee’s employment as allowed under this Section, the Company shall have the option of reducing the Base Salary thereafter payable to Employee by the amount of payment Employee receives pursuant to any disability insurance policy or program.

 

(c)                                  Termination for Cause.  If Employee’s employment is terminated by the Company for “Cause,” as defined below, the Company shall pay Employee only the balance of his accrued, but unpaid Base Salary, unreimbursed expenses, and his unused, accrued

 

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vacation time through the termination date.  The Company shall have the right to set off any amounts due to Employee by any amounts owed by Employee to the Company at the time Employee’s employment terminates, and Employee hereby authorizes the Company to make this setoff. Employee’s employment may be terminated for “Cause” at any time upon delivery of written notice to Employee.

 

(d)                                 Management Change.  In the event that the Company appoints a new Chief Executive Officer other than Employee at any time during the term of this Agreement and Employee voluntarily resigns within three (3) months following such appointment upon not less than thirty (30) days’ notice to the Company, the Company shall:

 

(i)                                     pay to Employee the balance of his accrued, but unpaid Base Salary, unreimbursed expenses, and his unused, accrued vacation time through the termination date;

 

(ii)                                  pay to Employee monthly severance payments equal to one-twelfth of Employee’s then current Base Salary, which severance payments shall be paid for the duration of the Severance Period (as defined below), in accordance with the Company’s usual payroll practices, commencing within sixty (60) days following the termination date, subject to the six (6) month delay set forth in Section 17(b) below, and the first payment shall include any unpaid installments from the termination date until the first payment date; and

 

(iii)                               cause any outstanding unvested options to purchase shares of Common Stock of the Company previously awarded to Employee to become fully vested as of the date of his termination of employment pursuant to this Section 4(d).

 

(e)                                  Termination by the Company without Cause or by Employee for Good Reason.  If Employee’s employment by the Company ceases due to a termination by the Company without Cause or a resignation by Employee for Good Reason, the Company shall:

 

(i)                                     pay to Employee the balance of his accrued, but unpaid Base Salary, unreimbursed expenses, and his unused, accrued vacation time through the termination date;

 

(ii)                                  to the extent then approved, accrued and unpaid, pay to Employee the annual Bonus (if any) with respect to the fiscal year ended immediately prior to the cessation of Employee’s employment, which such Bonus shall be paid at the time such Bonus would have otherwise been paid absent Employee’s cessation of employment;

 

(iii)                               pay to Employee,

 

(1)                                 in the event Employee’s employment by the Company ceases due to a termination by the Company without Cause or by Employee for Good Reason other than during the Change in Control Protection Period (as defined below), monthly severance payments equal to one-twelfth of the sum of (A) Employee’s then current Base Salary, and (B) an amount equal to the Target Bonus for the fiscal year during which Employee’s employment by the Company ceases, as determined in good faith by the Compensation Committee, which severance payments shall be paid for the duration of the Severance Period in

 

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accordance with the Company’s usual payroll practices, commencing within sixty (60) days following the termination date, subject to the six (6) month delay set forth in Section 17(b) below, and the first payment shall include any unpaid installments from the termination date until the first payment date; or

 

(2)                                 in the event Employee’s employment by the Company ceases due to a termination by the Company without Cause or by Employee for Good Reason during the Change in Control Protection Period, a severance payment amount equal to (A) the sum of Employee’s then current Base Salary plus (B) an amount equal to the Target Bonus for the fiscal year during which Employee’s employment by the Company ceases, as determined in good faith by the Compensation Committee, in a lump sum payment within sixty (60) days following the termination date; subject to the six (6) month delay set forth in Section 17(b) below, provided that such payment shall be made in installments as set forth in Section 4(e)(iii)(1) above if the Change in Control is not a “change in control event” as defined under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”);

 

(iv)                              cause any outstanding unvested options to purchase shares of Common Stock of the Company previously awarded to Employee to become fully vested as of the date of his termination of employment pursuant to this Section 4(e); and

 

(v)                                 if Employee validly elects to receive continuation coverage under the Company’s group health plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), reimburse Employee for a portion of the applicable premium payable for such COBRA continuation coverage for the duration of the Severance Period in an amount equal to the employer’s portion of such premiums at the rate in effect on Employee’s termination date; provided, however, that if the Company determines that it cannot continue to provide Employee with such benefit (either pursuant to the terms of the applicable group health plan, as a result of applicable law, or otherwise), the Company shall make supplemental monthly severance payments to Employee in an amount equal to the monthly amount the Company would have otherwise reimbursed to Employee for his participation in such group health plan for the duration of the Severance Period.

 

Except as otherwise provided in this Section 4, all compensation and benefits will cease at the time of Employee’s cessation of employment and the Company will have no further liability or obligation by reason of such cessation of employment.  The payments and benefits set forth in Sections 4(d)(ii) and (iii) and 4(e)(iii), (iv) and (v) shall only be paid if Employee signs and does not revoke a release and waiver of claims in a form approved by the Company.

 

(f)                                   Voluntary Resignation.  Employee may voluntarily resign from his employment with the Company at any time.  In the event Employee voluntarily resigns from his employment with the Company (other than in accordance with Section 4(d)), Employee shall provide the Company with at least thirty (30) days’ notice of his intent to resign.  The Company shall pay Employee only the balance of his accrued, but unpaid Base Salary, unreimbursed expenses, and his unused, accrued vacation time through Employee’s last day of work.

 

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(g)                                  Definitions.  For purposes of this Agreement:

 

(i)                                     “Cause” shall mean the occurrence of any of the following events:  (1) any gross failure on the part of Employee (other than by reason of Disability as provided in Section 4(b)) to faithfully and professionally carry out his duties or to comply with any other material provision of this Agreement, which failure continues after written notice thereof by the Company, provided that the Company shall not be required to provide such notice in the event that such failure (A) is not susceptible to remedy or (B) relates to the same type of acts or omissions as to which such notice has been given on a prior occasion; (2) Employee’s dishonesty (which shall include without limitation any misuse or misappropriation of the Company’s assets), or other willful misconduct (including without limitation any conduct on the part of Employee intended to or likely to injure the business of the Company); (3) Employee’s conviction for any felony or for any other crime involving moral turpitude, whether or not relating to his employment; (4) in accordance with applicable federal, state or local laws, Employee’s insobriety or use of illegal drugs, chemicals or controlled substances either (A) in the course of performing his duties and responsibilities under this Agreement, or (B) otherwise affecting the ability of Employee to perform the same; (5) Employee’s failure to comply with a lawful written direction of the Company; or (6) any wanton and willful dereliction of duties by Employee.  The existence of any of the foregoing events or conditions shall be determined by the Company in the exercise of its reasonable judgment.

 

(ii)                                  “Change in Control” shall be deemed to have occurred if:

 

(1)                                 the acquisition, directly or indirectly, by a “person” (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of more than 50% of the combined voting power of the voting securities of the Company entitled to vote generally in the election of directors (the “Voting Securities”); provided, however, that the following acquisitions of Voting Securities shall not constitute a Change in Control:  (A) any acquisition by or from the Company or any of its subsidiaries, or by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries, (B) any acquisition by any underwriter in any firm commitment underwriting of securities to be issued by the Company, or (C) any acquisition by any corporation (or other entity) if, immediately following such acquisition, 50% or more of the then outstanding shares of common stock (or other equity unit) of such corporation (or other entity) and the combined voting power of the then outstanding voting securities of such corporation (or other entity), are beneficially owned, directly or indirectly, by all or substantially all of the individuals or entities who, immediately prior to such acquisition, were the beneficial owners of the then outstanding shares of Common Stock and the Voting Securities in substantially the same proportions, respectively, as their ownership immediately prior to the acquisition of the shares of Common Stock and Voting Securities; or

 

(2)                                 the consummation of the sale or other disposition of all or substantially all of the assets of the Company, other than to a wholly-owned subsidiary of the Company or to a holding company of which the Company is a direct or indirect wholly owned subsidiary prior to such transaction; or

 

(3)                                 the consummation of a reorganization, merger or consolidation of the Company, other than a reorganization, merger or consolidation, which

 

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would result in the Voting Securities outstanding immediately prior to the transaction continuing to represent (whether by remaining outstanding or by being converted to voting securities of the surviving entity) 65% or more of the Voting Securities or the voting power of the voting securities of such surviving entity outstanding immediately after such transaction; or

 

(4)                                 the consummation of a plan of complete liquidation of the Company; or

 

(5)                                 the following individuals cease for any reason to constitute a majority of the Board:  individuals who, as of the effective date of the Plan, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved and recommended by a vote of at least two-thirds of the directors then still in office who either were directors on the effective date of the Plan or whose appointment, election or nomination for election was previously so approved or recommended.

 

(iii)                               “Change in Control Protection Period” shall mean the twelve (12) month period following a Change in Control.

 

(iv)                              “Good Reason” shall mean:  (1) the breach by the Company of any material provision of this Agreement (provided, however, that a reduction in Employee’s Base Salary by less than twenty percent (20%) in and for any twelve (12) month period shall not be a material breach by the Company if it is made in connection with a reduction in base salaries imposed on a majority of other senior executives of the Company and Employee’s Base Salary is not reduced by a percentage that is greater than the percentage by which the base salary of a majority of other senior executives of the Company is reduced in and for that same twelve (12) month period); (2) a relocation of Employee’s principal business location to a location more than fifty (50) miles from Employee’s then-current business location; or (3) at any time there occurs any of the following which results in a material adverse change in Employee’s duties, position, or compensation without the express prior written consent of Employee: (A) the sale or transfer, whether in one transaction or in a series of transactions, of substantially all of the assets of the Company; (B) the merger or consolidation of the Company with or into any other person or entity under circumstances where the Company is not the surviving entity in such merger or where persons having control of the Company immediately prior to the transaction are not in control of the Company immediately after the transaction.  None of the foregoing events or conditions will constitute Good Reason unless Employee provides the Company with written objection to the event or condition within thirty (30) days following the occurrence thereof, the Company does not cure the event or condition within thirty (30) days of receiving that written objection, and Employee resigns his employment within thirty (30) days following the expiration of that cure period.

 

(v)                                 “Severance Period” shall mean (i) the seven (7) month period immediately following the date Employee’s employment with the Company ceases due to a termination by Employee in accordance with Section 4(d), (ii) the nine (9) month period immediately following the date Employee’s employment with the Company ceases due to a

 

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termination by the Company without Cause or by Employee for Good Reason other than during the Change in Control Protection Period or (iii) the twelve (12) month period immediately following the date Employee’s employment with the Company ceases due to a termination by the Company without Cause or by Employee for Good Reason during the Change in Control Protection Period.

 

(h)                                 Code Section 280G. It is the intention of Employee and of the Company that no payments by the Company to or for the benefit of Employee under this Agreement or any other agreement or plan, if any, pursuant to which Employee is entitled to receive payments or benefits shall be nondeductible to the Company by reason of the operation of Code Section 280G relating to parachute payments or any like statutory or regulatory provision.  Accordingly, and notwithstanding any other provision of this Agreement or any such agreement or plan, if by reason of the operation of said Section 280G or any like statutory or regulatory provision, any such payments exceed the amount which can be deducted by the Company, such payments shall be reduced to the maximum amount which can be deducted by the Company.  The Company shall make all reasonable efforts to avoid rendering such payments or benefits nondeductible.  To the extent that payments exceeding such maximum deductible amount have been made to or for the benefit of Employee, such excess payments shall be refunded to the Company with interest thereon at the applicable Federal rate determined under Code Section 1274(d), compounded annually, or at such other rate as may be required in order that no such payments shall be nondeductible to the Company by reason of the operation of said Code Section 280G or any like statutory or regulatory provision.  To the extent any such reduction in payments is necessary, any amounts subject to Code Section 409A will be reduced first, then to the extent any remaining reduction is necessary such further reduction shall occur to the payments or benefits in the order that results in the greatest economic present value of all payments actually made to Employee.

 

5.                                      Non-Competition.

 

(a)                                 For purposes of this Agreement, “Competitor” shall mean any person, company, or entity whose primary business at the time is, or whose then-current business plan contemplates engaging in activities which may be, competitive with products and services that were or were being designed, conceived, marketed, sold, distributed and/or developed by the Company during Employee’s employment by the Company or at the time of termination of Employee’s employment by the Company. For sake of clarity this would include products that would compete directly or indirectly with the Company’s rigosertib molecule in all its forms directly focused on myelodysplastic syndrome (MDS).

 

(b)                                 Employee agrees that so long as he is employed by the Company, and for a period of twelve (12) months after the termination of his employment for any reason whatsoever, he will not, directly or indirectly, whether for compensation or not, own, manage, operate, join, control, work for, or participate in, or be connected as a stockholder, officer, employee, partner, creditor, guarantor, advisor or otherwise, with a Competitor. The foregoing shall not be construed, however, as preventing Employee from investing his assets in such form or manner as will not require services on the part of Employee in the operations of the businesses in which such investments are made, provided that any such business is publicly owned and the interest of Employee therein is solely that of an investor owning not more than five percent (5%)

 

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of the outstanding equity securities of any such business. Should Employee breach the provisions of this Section, the Company shall, in addition to any equitable or legal relief to which it is otherwise entitled, be entitled to cease all payments and benefits under the terms of this Agreement and shall be entitled to pursue all remedies it might have including, but not limited to, those contained in this Agreement.

 

(c)                                  For the period of twelve (12) months after the termination of this Agreement for any reason whatsoever, Employee shall not hire, retain or engage as a director, officer, employee, agent or in any other capacity any person or persons who are employed by the Company or who were at any time (within a period of six (6) months immediately prior to the date of Employee’s termination) employed by the Company or otherwise interfere with the relationship between such persons and the Company.

 

(d)                                 If the period of time or area herein specified should be adjudged unreasonable in any court proceeding, then the period of time shall be reduced by such number of months or the area shall be reduced by elimination of such portion thereof as deemed unreasonable, so that this covenant may be enforced during such period of time and in such area as is adjudged to be reasonable.

 

6.                                      Confidential Information.

 

(a)                                 Subject to Section 6(f), at all times during Employee’s employment and thereafter, Employee will hold in strictest confidence and will not disclose, use, lecture upon or publish any of the Company’s Proprietary Information (defined below), except as such use may be required in connection with Employee’s work for the Company, or unless an officer of the Company expressly authorizes such disclosure in writing.  Employee will obtain Company’s written approval before publishing or submitting for publication any material (written, verbal, or otherwise) that relates to Employee’s work for Company and/or incorporates any Proprietary Information.  Employee hereby assigns to the Company any rights Employee may have or acquire in such Proprietary Information and recognizes that all Proprietary Information shall be the sole property of the Company and its assigns.

 

(b)                                 The term “Proprietary Information” shall mean any and all confidential and/or proprietary knowledge, data or information of the Company, whether acquired by Employee while employed by the Company, during Employee’s prior service as a consultant to the Company, or otherwise.  By way of illustration but not limitation, “Proprietary Information” includes but is not limited to (i) trade secrets, inventions, mask works, ideas, methods, processes, formulas, chemical structures and methods for chemical synthesis, structure-activity relationships, assay methodologies, characteristics, equipment and equipment designs, results, formulations and biological, pharmacological, toxicological and clinical data, physical, chemical or biological materials, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, compilations, shop practices, supplier lists, designs and techniques (hereinafter collectively referred to as “Inventions”); and (ii) information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; and (iii) information regarding the skills and compensation of other employees of the Company.  Notwithstanding the foregoing, it is understood that, at all times,

 

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Employee is free to use information which is generally known in the trade or industry, which is not gained as a result of a breach of this Agreement, and which is acquired as a result of Employee’s own skill, knowledge, know-how and experience.

 

(c)                                  Employee understands, in addition, that the Company has received and in the future will receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  Subject to Section 6(f), during the period of Employee’s employment and thereafter, Employee will hold Third Party Information in the strictest confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection with their work for the Company) or use, except in connection with Employee’s work for the Company, Third Party Information unless expressly authorized by an officer of the Company in writing.

 

(d)                                 During Employee’s employment by the Company, Employee will not improperly use or disclose any confidential information or trade secrets, if any, of any of his former employers or any other person to whom Employee has an obligation of confidentiality, and Employee will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person to whom Employee has an obligation of confidentiality, unless such action is consented to in writing by all persons to whom the relevant obligation of confidentiality is owed.  Employee shall not work on Company projects on the grounds of, or using the equipment of, any third party, unless such work is agreed to by the Company in writing.

 

(e)                                  Upon termination of his employment, Employee shall return to the Company all Proprietary Information in any tangible form in his possession, including copies thereof.

 

(f)                                   Nothing in this Agreement shall prohibit or restrict Employee from initiating communications directly with, responding to any inquiries from, providing testimony before, providing confidential information to, reporting possible violations of law or regulation to, or from filing a claim or assisting with an investigation directly with a self-regulatory authority or a government agency or entity, including the U.S. Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General (collectively, the “Regulators”), or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation.  Employee does not need the prior authorization of the Company to engage in such communications, respond to such inquiries, provide confidential information or documents to the Regulators, or make any such reports or disclosures to the Regulators.  Employee is not required to notify the Company that Employee has engaged in such communications with the Regulators.  If Employee is required by law to disclose Proprietary Information, other than to Regulators as described above, Employee shall give prompt written notice to the Company so as to permit the Company to protect its interests in confidentiality to the extent possible.  Federal law provides criminal and civil immunity to federal and state claims for trade secret misappropriation to individuals who disclose a trade secret to their attorney, a court, or a government official in certain, confidential circumstances that are set forth at 18 U.S.C. §§ 1833(b)(1) and 1833(b)(2), related to the reporting or

 

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investigation of a suspected violation of the law, or in connection with a lawsuit for retaliation for reporting a suspected violation of the law.

 

7.                                      Company Right to Inventions.

 

(a)                                 Inventions, if any, patented or unpatented, which Employee made prior to the commencement of Employee’s employment with the Company are excluded from the scope of this Agreement.  To preclude any possible uncertainty, Employee has provided on Appendix A (Previous Inventions) attached hereto a complete list of all Inventions that Employee has, alone or jointly with others, conceived, developed or reduced to practice or caused to be conceived, developed or reduced to practice prior to the commencement of Employee’s employment with the Company, that Employee considers to be Employee’s property or the property of third parties, and that Employee wishes to have excluded from the scope of this Agreement (collectively referred to as “Prior Inventions”).  If disclosure of any such Prior Invention would cause Employee to violate any prior confidentiality agreement, Employee understands that Employee shall not list such Prior Inventions in Appendix A but shall only disclose a cursory name for each such invention (bearing in mind that where necessary the naming shall not be so specific as to violate the confidentiality obligation), a listing of the party(ies) to whom the invention belongs, and the fact that full disclosure as to such invention has not been made for that reason.  Space is provided on Appendix A for this purpose.  Notwithstanding the foregoing, Employee agrees that Employee will not incorporate, or permit to be incorporated, Prior Inventions in any Company Inventions without the Company’s prior written consent and, furthermore, Employee shall not incorporate a Prior Invention into a Company product, process or machine without having the ability to make the grant set forth in the foregoing. If, in the course of Employee’s employment with the Company, Employee incorporates a Prior Invention into a Company product, process or machine, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, modify, use, import, sell and offer to sell such Prior Invention.

 

(b)                                 Employee agrees to assign and hereby does assign to the Company all of Employee’s right, title and interest in and to any and all Inventions, whether or not patentable or registerable under patent, intellectual property, copyright or similar statutes, made or conceived or reduced to practice or learned by Employee, either alone or jointly with others, during the period of Employee’s employment with the Company, including in the future (e.g., when any such Inventions are first reduced to practice or a description thereof first fixed in a tangible medium, as applicable).  Inventions assigned to the Company pursuant to this Section 7(b) are hereinafter referred to as “Company Inventions.”

 

(c)                                  During the period of Employee’s employment, Employee will promptly disclose to the Company fully and in writing all Inventions authored, conceived or reduced to practice by Employee, either alone or jointly with others.  In addition, Employee will promptly disclose to the Company all patent applications filed by Employee or on Employee’s behalf during Employee’s employment and within one (1) year after termination of employment.  At the time of each such disclosure, Employee will advise the Company in writing of any Inventions that Employee believes qualify for exclusion from Employee’s obligation to

 

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assign hereunder; and Employee will at that time provide to the Company in writing all evidence necessary to substantiate that belief.

 

(d)                                 Employee acknowledges that all original works of authorship which are made by Employee (solely or jointly with others) within the scope of Employee’s employment and which are protectable by copyright are “works made for hire,” pursuant to United States Copyright Act (17 U.S.C. § 101).

 

(e)                                  Employee will assist the Company in every proper way to obtain, and from time to time enforce, United States and foreign trade secret, patent, copyright, mask work and other intellectual property rights (“Proprietary Rights”) relating to Company Inventions in any and all countries.  To that end, Employee will execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the assignment thereof.  In addition, Employee will execute, verify and deliver assignments of such Proprietary Rights to the Company, its successor in interest, or its designee.  Employee’s obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries shall continue beyond the termination of Employee’s employment.

 

In the event the Company is unable for any reason, after reasonable effort, to secure Employee’s signature on any document needed in connection with the actions specified in this Section 7(e), Employee hereby irrevocably designates and appoints the Company and its duly authorized officers and agents as Employee’s agent and attorney-in-fact, which appointment is coupled with an interest, to act for and on Employee’s behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph with the same legal force and effect as if executed by Employee.

 

(f)                                   Employee agrees to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that may be required by the Company) of all Proprietary Information developed by Employee and all Inventions made by Employee during the period of Employee’s employment at the Company, which records shall be available to and remain the sole property of the Company at all times.

 

(g)                                  Employee represents that Employee’s performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any agreement to keep in confidence information acquired by Employee in confidence or in trust prior to Employee’s employment by the Company.  Employee has not entered into, and Employee agrees that he will not enter into, any agreement either written or oral in conflict herewith.

 

8.                                      Remedies.  Because Employee’s services are personal and unique and because Employee may have access to and become acquainted with the Proprietary Information of the Company, the Company shall have the right to enforce this Agreement and any of its provisions by injunction, or other equitable relief, without bond (if allowed by applicable law), and without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement.  In the event that Employee performs services for other entities while

 

12

 

employed by the Company or leaves the employ of the Company, Employee hereby consents to the notification of Employee’s new employer of Employee’s rights and obligations under this Agreement.

 

9.                                      Arbitration.  Any and all disputes between the parties (except actions to enforce the provisions of Sections 5, 6 or 7 of this Agreement), arising under or relating to this Agreement or any other dispute arising between the parties, including claims arising under any employment discrimination laws, shall be adjudicated and resolved exclusively through binding arbitration before the American Arbitration Association pursuant to the American Arbitration Association’s then-in-effect National Rules for the Resolution of Employment Disputes (hereafter “Rules”).  The initiation and conduct of any arbitration hereunder shall be in accordance with the Rules and each side shall bear its own costs and counsel fees in such arbitration.  Any arbitration hereunder shall be conducted in Philadelphia, Pennsylvania, and any arbitration award shall be final and binding on the Parties.  The arbitrator shall have no authority to depart from, modify, or add to the written terms of this Agreement.  The arbitration provisions of this Section 9 shall be interpreted according to, and governed by, the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and any action pursuant to such Act to enforce any rights hereunder shall be brought exclusively in the United States District Court for the Eastern District of Pennsylvania.  The parties consent to the jurisdiction of (and the laying of venue in) such court.

 

10.                               General Indemnification.  In the event the Employee is made, or threatened to be made, a party to any legal action or proceeding, whether civil or criminal, including any governmental or regulatory proceedings or investigations, by reason of the fact that the Employee is or was a director or officer of the Company or its affiliates, Employee shall be indemnified by the Company, and the Company shall pay Employee’s related expenses when and as incurred, to the fullest extent permitted by the laws of the state of Delaware and the Company’s articles of incorporation and bylaws. During Employee’s employment with the Company and its affiliates and after termination of employment for any reason, the Company shall cover Employee under the Company’s directors and officers insurance applicable to other officers and directors.

 

11.                               Severability.  The terms of this Agreement and each Section hereof shall be considered severable and the invalidity or unenforceability of any part thereof shall not affect the validity or enforceability of the remaining portions or provisions hereof.

 

12.                               Notices.  Any notice required or permitted to be given under this Agreement shall be sufficient, if in writing and delivered by registered or certified mail or overnight delivery service to his residence in the case of Employee, or to its principal office in the case of the Company.

 

13.                               Assignment.  The rights and obligations of the Company under this Agreement shall inure to the benefit of and be binding upon its successors and assigns.  Neither this Agreement nor any rights or interests herein or created hereby may be assigned or otherwise transferred voluntarily or involuntarily by Employee.

 

13

 

14.                               Waiver.  The waiver by the Company or Employee of a breach of any provision of this Agreement by the other shall not operate or be construed as a waiver of any subsequent breach.

 

15.                               Applicable Law.  This Agreement shall be interpreted and construed under the laws of the Commonwealth of Pennsylvania.

 

16.                               Entire Agreement; Prior Agreements.  This instrument contains the entire agreement of the parties with respect to the subject matter hereof and supersedes any and all prior or contemporaneous agreements, oral or written, concerning the subject matter contained herein, including without limitation any prior agreements between the Company and Employee (including without limitation the Prior Agreement).  It may not be changed or altered, except by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.

 

17.                               Code Section 409A.

 

(a)                                 Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and applied so that the payments and benefits set forth herein shall either be exempt from the requirements of Code Section 409A or shall comply with the requirements of Code Section 409A and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be exempt from or in compliance with Code Section 409A. The parties hereto agree that the payments and benefits set forth herein comply with or are exempt from the requirements of Code Section 409A and agree not to take any position, and to cause their affiliates, successors and assigns not to take any position, inconsistent with such interpretation for any reporting purposes, whether internal or external.

 

(b)                                 Notwithstanding anything in this Agreement or elsewhere to the contrary, a termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits that constitute “non-qualified deferred compensation” within the meaning of Code Section 409A upon or following a termination of Employee’s employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service” and the date of such separation from service shall be treated as the date of termination for purposes of any such payment or benefits. Notwithstanding any other provision of this Agreement to the contrary, if Employee is a “specified employee” within the meaning of Code Section 409A and the regulations issued thereunder, and a payment or benefit provided for in this Agreement would be subject to additional tax under Code Section 409A if such payment or benefit is paid within six (6) months after Employee’s “separation from service” (within the meaning of Code Section 409A), then such payment or benefit required under this Agreement shall not be paid (or commence) during the six-month period immediately following Employee’s separation from service except as provided in the immediately following sentence. In such an event, any payments or benefits that would otherwise have been made or provided during such six-month period and which would have incurred such additional tax under Code Section 409A shall instead be paid to Employee in a lump-sum cash payment on the earlier of (i) the first regular payroll date of the seventh month

 

14

 

following Employee’s separation from service or (ii) the 10th business day following Employee’s death.

 

(c)                                  It is intended that each installment of any severance payments and benefits provided under this Agreement shall be treated as a separate “payment” for purposes of Code Section 409A. Neither Employee nor the Company shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Code Section 409A. All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Code Section 409A to the extent that such reimbursements or in-kind benefits are subject to Code Section 409A, including, where applicable, the requirements that (i) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (ii) the reimbursement of an eligible expense shall be made promptly and in all cases on or before the last day of the calendar year following the year in which the expense is incurred and (iii) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit. Notwithstanding anything contained herein to the contrary, if the period in which any general waiver and release of claims may be executed overlaps two calendar years (regardless of when such release is actually executed), then, to the extent required by Code Section 409A, any payments that are subject to such general waiver and release of claims that would otherwise be made in such first calendar year shall instead be withheld and paid on the first normal payment date in the second calendar year with all remaining payments to be paid as if such delay had not occurred.

 

18.                               Recoupment Policy.  Employee agrees that Employee will be subject to any compensation claw back, recoupment and anti-hedging policies that may be applicable to Employee as an executive of the Company, as in effect from time to time and as approved by the Board or a duly authorized committee thereof.

 

19.                               Counterparts.  This Amendment may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument.  Any and all counterparts may be executed by facsimile.

 

[signature page follows]

 

15

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

 

	
 
    	
ONCONOVA   THERAPEUTICS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ramesh Kumar
    
	
 
    	
 
    	
Ramesh   Kumar, Ph.D., CEO
    
	
 
    	
 
    	
 
    
	
 
    	
STEVEN   FRUCHTMAN, M.D.
    
	
 
    	
 
    
	
 
    	
/s/ Steven Fruchtman
    

 

16

 

APPENDIX A

 

	
TO:
    	
Ramesh   Kumar, Ph.D.
    	
 
    
	
 
    	
 
    	
 
    
	
FROM:
    	
Steven   Fruchtman, M.D.
    	
 
    
	
 
    	
 
    	
 
    
	
DATE:
    	
July 1,   2015
    	
 
    
	
 
    	
 
    	
 
    
	
SUBJECT:
    	
PREVIOUS   INVENTIONS
    	
 
    

 

1.                                      Except as listed in Section 2 below, the following is a complete list of all inventions or improvements relevant to the subject matter of my employment by Onconova Therapeutics, Inc. (the “Company”) that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by the Company:

 

	
x
    	
No   inventions or improvements.
    
	
 
    	
 
    
	
o
    	
See   below:
    

 

o           Additional sheet(s) attached.

 

2.                                      Due to a prior confidentiality agreement, I cannot complete the disclosure under Section 1 above with respect to inventions or improvements generally listed below, the proprietary rights and duty of confidentiality with respect to which I owe to the following party(ies):

 

	
INVENTION OR IMPROVEMENT
    	
 
    	
PARTY(IES)
    	
 
    	
RELATIONSHIP
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
1.
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
 
    	
 
    	
 
    

 

o           Additional sheet(s) attached.EX-10.4

 Exhibit 10.4 

ARADIGM CORPORATION 

Employee Stock Purchase Plan 

Adopted April 16, 1996 Approved by the Shareholders on June 5, 1996 Amended by the Board of Directors 

on April 7, 1998 Approved by the Shareholders on May 15, 1998 Amended by the Board of Directors 

on February 2, 1999 Approved by the Shareholders on May 21, 1999 Amended by the Board of Directors on 

April 3, 2000 Approved by the Shareholders on May 19, 2000 Amended by the Board of Directors on April 2, 

2001 Approved by the Shareholders on May 18, 2001 Amended by the Board of Directors on December 17, 

2001 Approved by the Shareholders on February 8, 2002 Amended by the Board of Directors on February 19, 

2003 Approved by the Shareholders on May 15, 2003 Amended by the Board of Directors on March 21, 2005 

Approved by the Shareholders on May 19, 2005 Amended by the Board of Directors on April 4, 2008 

Approved by the Shareholders on May 15, 2008 Amended by the Board of Directors on February 25, 2009 

Approved by the Shareholders on May 15, 2009 

Amended by the Board of Directors on March 22, 2013 

Approved by the Shareholders on May 22, 2013 

Amended by the Board of Directors on March 13, 2015 

Approved by the Shareholders on May 14, 2015 

Amended by the Board of Directors on March 22, 2017 

Approved by the Shareholders on June 1, 2017 

Amended by the Board of Directors on April 13, 2018 

Approved by the Shareholders on June 29, 2018 

Purpose 
 The purpose of the Employee
Stock Purchase Plan (the “Plan”) is to provide a means by which employees of Aradigm Corporation, a California corporation (the “Company”), and its Affiliates, as defined in subparagraph 1(b), which are designated as provided in
subparagraph 2(b), may be given an opportunity to purchase stock of the Company. 
 The word “Affiliate” as used in the Plan means
any parent corporation or subsidiary corporation of the Company, as those terms are defined in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended (the “Code”). 

The Company, by means of the Plan, seeks to retain the services of its employees, to secure and retain the services of new employees, and to
provide incentives for such persons to exert maximum efforts for the success of the Company. 
 The Company intends that the rights to
purchase stock of the Company granted under the Plan be considered options issued under an “employee stock purchase plan” as that term is defined in Section 423(b) of the Code. 

Administration 
 The Plan shall be
administered by the Board of Directors (the “Board”) of the Company unless and until the Board delegates administration to a Committee, as provided in subparagraph 2(c). Whether or not the Board has delegated administration, the Board
shall have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan. 
 The
Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan: 
 To determine when and how
rights to purchase stock of the Company shall be granted and the provisions of each offering of such rights (which need not be identical). 

To designate from time to time which Affiliates of the Company shall be eligible to participate in the Plan. 

To construe and interpret the Plan and rights granted under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. 

 To amend the Plan as provided in paragraph 13. 

Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the
Company and its Affiliates and to carry out the intent that the Plan be treated as an “employee stock purchase plan” within the meaning of Section 423 of the Code. 

The Board may delegate administration of the Plan to a Committee composed of not fewer than two (2) members of the Board (the
“Committee”) constituted in accordance with the requirements of Rule 16b-3 under the Exchange Act. If administration is delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board, subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee
at any time and revest in the Board the administration of the Plan. 
 Shares Subject to the Plan 

Subject to the provisions of paragraph 12 relating to adjustments upon changes in stock, the stock that may be sold pursuant to rights
granted under the Plan shall not exceed in the aggregate six hundred eighty six thousand, two hundred and fifty (686,250) shares of the Company’s common stock (the “Common Stock”). If any right granted under the Plan shall for any
reason terminate without having been exercised, the Common Stock not purchased under such right shall again become available for the Plan. 

The stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise. 

Grant of Rights; Offering 
 The Board or
the Committee may from time to time grant or provide for the grant of rights to purchase Common Stock of the Company under the Plan to eligible employees (an “Offering”) on a date or dates (the “Offering Date(s)”) selected by the
Board or the Committee. Each Offering shall be in such form and shall contain such terms and conditions as the Board or the Committee shall deem appropriate, which shall comply with the requirements of Section 423(b)(5) of the Code that all
employees granted rights to purchase stock under the Plan shall have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate
Offerings need not be identical, but each Offering shall include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering shall be effective, which
period shall not exceed twenty-seven (27) months beginning with the Offering Date, and the substance of the provisions contained in paragraphs 5 through 8, inclusive. 

Eligibility 
 Rights may be granted only
to employees of the Company or, as the Board or the Committee may designate as provided in subparagraph 2(b), to employees of any Affiliate of the Company. Except as provided in subparagraph 5(b), an employee of the Company or any Affiliate shall
not be eligible to be granted rights under the Plan, unless, on the Offering Date, such employee has been in the employ of the Company or any Affiliate for such continuous period preceding such grant as the Board or the Committee may require, but in
no event shall the required period of continuous employment be equal to or greater than two (2) years. In addition, unless otherwise determined by the Board or the Committee and set forth in the terms of the applicable Offering, no employee of
the Company or any Affiliate shall be eligible to be granted rights under the Plan, unless, on the Offering Date, such employee’s customary employment with the Company or such Affiliate is for at least twenty (20) hours per week and at
least five (5) months per calendar year. 

  
 2 

 The Board or the Committee may provide that, each person who, during the course of an
Offering, first becomes an eligible employee of the Company or designated Affiliate will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an eligible employee or occurs thereafter, receive a
right under that Offering, which right shall thereafter be deemed to be a part of that Offering. Such right shall have the same characteristics as any rights originally granted under that Offering, as described herein, except that: 

the date on which such right is granted shall be the “Offering Date” of such right for all purposes, including determination of the
exercise price of such right; 
 the period of the Offering with respect to such right shall begin on its Offering Date and end coincident
with the end of such Offering; and 
 the Board or the Committee may provide that if such person first becomes an eligible employee
within a specified period of time before the end of the Offering, he or she will not receive any right under that Offering. 
 No employee
shall be eligible for the grant of any rights under the Plan if, immediately after any such rights are granted, such employee owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the
Company or of any Affiliate. For purposes of this subparagraph 5(c), the rules of Section 424(d) of the Code shall apply in determining the stock ownership of any employee, and stock which such employee may purchase under all outstanding rights
and options shall be treated as stock owned by such employee. 
 An eligible employee may be granted rights under the Plan only if such
rights, together with any other rights granted under “employee stock purchase plans” of the Company and any Affiliates, as specified by Section 423(b)(8) of the Code, do not permit such employee’s rights to purchase stock of the
Company or any Affiliate to accrue at a rate which exceeds twenty five thousand dollars ($25,000) of fair market value of such stock (determined at the time such rights are granted) for each calendar year in which such rights are outstanding at any
time. 
 Officers of the Company and any designated Affiliate shall be eligible to participate in Offerings under the Plan, provided,
however, that the Board may provide in an Offering that certain employees who are highly compensated employees within the meaning of Section 423(b)(4)(D) of the Code shall not be eligible to participate. 

Rights; Purchase Price 
 On each Offering
Date, each eligible employee, pursuant to an Offering made under the Plan, shall be granted the right to purchase up to the number of shares of Common Stock of the Company purchasable with a percentage designated by the Board or the Committee not
exceeding fifteen percent (15%) of such employee’s Earnings (as defined by the Board or the Committee in each Offering) during the period which begins on the Offering Date (or such later date as the Board or the Committee determines for a
particular Offering) and ends on the date stated in the Offering, which date shall be no later than the end of the Offering. The Board or the Committee shall establish one or more dates during an Offering (the “Purchase Date(s)”) on which
rights granted under the Plan shall be exercised and purchases of Common Stock carried out in accordance with such Offering. 
 In
connection with each Offering made under the Plan, the Board or the Committee may specify a maximum number of shares that may be purchased by any employee as well as a maximum aggregate number of shares that may be purchased by all eligible
employees pursuant to such Offering. In addition, in connection with each Offering that contains more than one Purchase Date, the Board or the Committee may specify a maximum aggregate number of shares which may be purchased by all eligible
employees on any given Purchase Date under the Offering. If the aggregate purchase of shares upon exercise of rights granted under the Offering would exceed any such maximum aggregate number, the Board or the Committee shall make a pro rata
allocation of the shares available in as nearly a uniform manner as shall be practicable and as it shall deem to be equitable. 
 The
purchase price of stock acquired pursuant to rights granted under the Plan shall be not less than the lesser of: 
 an amount equal to
eighty-five percent (85%) of the fair market value of the stock on the Offering Date; or 
 an amount equal to eighty-five percent (85%)
of the fair market value of the stock on the Purchase Date. 

  
 3 

 Participation; Withdrawal; Termination 

An eligible employee may become a participant in the Plan pursuant to an Offering by delivering a participation agreement to the Company within
the time specified in the Offering, in such form as the Company provides. Each such agreement shall authorize payroll deductions of up to the maximum percentage specified by the Board or the Committee of such employee’s Earnings during the
Offering (as defined by the Board or Committee in each Offering). The payroll deductions made for each participant shall be credited to an account for such participant under the Plan and shall be deposited with the general funds of the Company. A
participant may reduce (including to zero) or increase such payroll deductions, and an eligible employee may begin such payroll deductions, after the beginning of any Offering only as provided for in the Offering. A participant may make additional
payments into his or her account only if specifically provided for in the Offering and only if the participant has not had the maximum amount withheld during the Offering. 

At any time during an Offering, a participant may terminate his or her payroll deductions under the Plan and withdraw from the Offering by
delivering to the Company a notice of withdrawal in such form as the Company provides. Such withdrawal may be elected at any time prior to the end of the Offering except as provided by the Board or the Committee in the Offering. Upon such withdrawal
from the Offering by a participant, the Company shall distribute to such participant all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to acquire stock for the participant) under the
Offering, without interest, and such participant’s interest in that Offering shall be automatically terminated. A participant’s withdrawal from an Offering will have no effect upon such participant’s eligibility to participate in any
other Offerings under the Plan but such participant will be required to deliver a new participation agreement in order to participate in subsequent Offerings under the Plan. 

Rights granted pursuant to any Offering under the Plan shall terminate immediately upon cessation of any participating employee’s
employment with the Company and any designated Affiliate, for any reason, and the Company shall distribute to such terminated employee all of his or her accumulated payroll deductions (reduced to the extent, if any, such deductions have been used to
acquire stock for the terminated employee) under the Offering, without interest. 
 Rights granted under the Plan shall not be transferable
by a participant otherwise than by will or the laws of descent and distribution, or by a beneficiary designation as provided in paragraph 14 and, otherwise during his or her lifetime, shall be exercisable only by the person to whom such rights
are granted. 
 Exercise 
 On each
Purchase Date specified therefor in the relevant Offering, each participant’s accumulated payroll deductions and other additional payments specifically provided for in the Offering (without any increase for interest) will be applied to the
purchase of whole shares of stock of the Company, up to the maximum number of shares permitted pursuant to the terms of the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares shall be issued upon
the exercise of rights granted under the Plan. The amount, if any, of accumulated payroll deductions remaining in each participant’s account after the purchase of shares which is less than the amount required to purchase one share of stock on
the final Purchase Date of an Offering shall be held in each such participant’s account for the purchase of shares under the next Offering under the Plan, unless such participant withdraws from such next Offering, as provided in subparagraph
7(b), or is no longer eligible to be granted rights under the Plan, as provided in paragraph 5, in which case such amount shall be distributed to the participant after such final Purchase Date, without interest. The amount, if any, of
accumulated payroll deductions remaining in any participant’s account after the purchase of shares which is equal to the amount required to purchase whole shares of stock on the final Purchase Date of an Offering shall be distributed in full to
the participant after such Purchase Date, without interest. 
 No rights granted under the Plan may be exercised to any extent unless the
shares to be issued upon such exercise under the Plan (including rights granted thereunder) are covered by an effective registration statement pursuant to the Securities Act of 1933, as amended (the “Securities Act”) and the Plan is in
material compliance with all applicable state, foreign and other securities and other laws applicable to the Plan. If on a Purchase Date in any Offering hereunder the Plan is not so registered or in such compliance, no rights granted under the Plan
or any Offering shall be exercised on such Purchase Date, and the Purchase Date shall be delayed until the Plan is subject to such an effective registration statement and such compliance, except that the Purchase Date shall not be delayed more than
twelve (12) months and the Purchase Date shall in no event be more than twenty-seven (27) months from the Offering Date. If on the Purchase Date of any Offering hereunder, as delayed to the maximum extent permissible, the Plan is not
registered and in such compliance, no rights granted under the Plan or any Offering shall be exercised and all payroll deductions accumulated during the Offering (reduced to the extent, if any, such deductions have been used to acquire stock) shall
be distributed to the participants, without interest. 

  
 4 

 Covenants of the Company 

During the terms of the rights granted under the Plan, the Company shall keep available at all times the number of shares of stock required to
satisfy such rights. 
 The Company shall seek to obtain from each federal, state, foreign or other regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to issue and sell shares of stock upon exercise of the rights granted under the Plan. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell stock upon exercise of such rights unless and
until such authority is obtained. 
 Use of Proceeds from Stock 

Proceeds from the sale of stock pursuant to rights granted under the Plan shall constitute general funds of the Company. 

Rights as a Shareholder 
 A participant
shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares subject to rights granted under the Plan unless and until the participant’s shareholdings acquired upon exercise of rights under the
Plan are recorded in the books of the Company. 
 Adjustments upon Changes in Stock 

If any change is made in the stock subject to the Plan, or subject to any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving
the receipt of consideration by the Company), the Plan and outstanding rights will be appropriately adjusted in the class(es) and maximum number of shares subject to the Plan and the class(es) and number of shares and price per share of stock
subject to outstanding rights. Such adjustments shall be made by the Board or the Committee, the determination of which shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a
“transaction not involving the receipt of consideration by the Company.”) 
 In the event of: (1) a dissolution or
liquidation of the Company; (2) a merger or consolidation in which the Company is not the surviving corporation; (3) a reverse merger in which the Company is the surviving corporation but the shares of the Company’s Common Stock
outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise; or (4) the acquisition by any person, entity or group within the meaning of
Section 13(d) or 14(d) of the Exchange Act or any comparable successor provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the Company or any Affiliate of the Company) of the beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable successor rule) of securities of the Company representing at least fifty percent (50%) of the combined voting power
entitled to vote in the election of directors, then, as determined by the Board in its sole discretion (i) any surviving or acquiring corporation may assume outstanding rights or substitute similar rights for those under the Plan,
(ii) such rights may continue in full force and effect, or (iii) participants’ accumulated payroll deductions may be used to purchase Common Stock immediately prior to the transaction described above and the participants’ rights
under the ongoing Offering terminated. 
 Amendment of the Plan 

The Board at any time, and from time to time, may amend the Plan. However, except as provided in paragraph 12 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the shareholders of the Company within twelve (12) months before or after the adoption of the amendment, where the amendment will: 

Increase the number of shares reserved for rights under the Plan; 

  
 5 

 Modify the provisions as to eligibility for participation in the Plan (to the extent such
modification requires shareholder approval in order for the Plan to obtain employee stock purchase plan treatment under Section 423 of the Code or to comply with the requirements of Rule 16b-3
promulgated under the Exchange Act as amended (“Rule 16b-3”)); or employee stock purchase plan treatment under Section 423 of the Code or to comply with the requirements of Rule 16b-3 promulgated under the Exchange Act as amended (“Rule 16b-3”)); or 

Modify the Plan in any other way if such modification requires shareholder approval in order for the Plan to obtain employee stock purchase
plan treatment under Section 423 of the Code or to comply with the requirements of Rule 16b-3. 

It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible
employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to employee stock purchase plans and/or to bring the Plan and/or rights granted under it into
compliance therewith. 
 Rights and obligations under any rights granted before amendment of the Plan shall not be impaired by any amendment
of the Plan, except with the consent of the person to whom such rights were granted, or except as necessary to comply with any laws or governmental regulations, or except as necessary to ensure that the Plan and/or rights granted under the Plan
comply with the requirements of Section 423 of the Code. 
 Designation of Beneficiary 

A participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant’s
account under the Plan in the event of such participant’s death subsequent to the end of an Offering but prior to delivery to the participant of such shares and cash. In addition, a participant may file a written designation of a beneficiary
who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death during an Offering. 

Such designation of beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant
and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant’s death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the participant, or
if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if
no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate. 
 Termination or Suspension of the
Plan 
 The Board in its discretion, may suspend or terminate the Plan at any time. No rights may be granted under the Plan while the
Plan is suspended or after it is terminated. Rights and obligations under any rights granted while the Plan is in effect shall not be impaired by suspension or termination of the Plan, except as expressly provided in the Plan or with the consent of
the person to whom such rights were granted, or except as necessary to comply with any laws or governmental regulation, or except as necessary to ensure that the Plan and/or rights granted under the Plan comply with the requirements of
Section 423 of the Code. 
 Effective Date of Plan 

The Plan shall become effective on the same day that the Company’s initial public offering of shares of common stock becomes effective
(the “Effective Date”), but no rights granted under the Plan shall be exercised unless and until the Plan has been approved by the shareholders of the Company within twelve (12) months before or after the date the Plan is adopted by
the Board or the Committee, which date may be prior to the Effective Date. 

  
 6

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