Document:

exv10w19

 

Exhibit 10.19

RXi Pharmaceuticals Corporation

2007 INCENTIVE PLAN

	1.	 	DEFINED TERMS

          Exhibit A,
which is incorporated by reference, defines the terms used in the Plan and sets
forth certain operational rules related to those terms.

	2.	 	PURPOSE

          The Plan
has been established to advance the interests of the Company by providing for the
grant to Participants of Stock-based and other incentive Awards.

	3.	 	ADMINISTRATION

          The
Administrator has discretionary authority, subject only to the express provisions of the
Plan, to interpret the Plan; determine eligibility for and grant Awards; determine, modify or waive
the terms and conditions of any Award; prescribe forms, rules and procedures; and otherwise do all
things necessary to carry out the purposes of the Plan. In the case of any Award intended to be
eligible for the performance-based compensation exception under Section 162(m), the Administrator
will exercise its discretion consistent with qualifying the Award for that exception.
Determinations of the Administrator made under the Plan will be conclusive and will bind all
parties.

	4.	 	LIMITS ON AWARDS UNDER THE PLAN

          (a)     
Number of Shares. A maximum of 2,750,000 shares of Stock may be delivered in
satisfaction of Awards under the Plan. The number
of shares of Stock delivered in
satisfaction of Awards shall, for purposes of the preceding sentence, be determined net of shares
of Stock withheld by the Company in payment of the exercise price of the Award or in satisfaction
of tax withholding requirements with respect to the Award. The limits set forth in this Section
4(a) shall be construed to comply with Section 422. To the extent consistent with the requirements
of Section 422 and with other applicable legal requirements (including applicable stock exchange
requirements), Stock issued under awards of an acquired company that are converted, replaced, or
adjusted in connection with the acquisition shall not reduce the number of shares available for
Awards under the Plan. 

          (b)     
Type of Shares. Stock delivered by the Company under the Plan may be authorized
but unissued Stock or previously issued Stock acquired by the Company. No fractional shares of
Stock will be delivered under the Plan.

          (c)      Section 162(m) Limits. The maximum number of shares of Stock for which Stock
Options may be granted to any person in any calendar year and the maximum number of shares of Stock
subject to SARs granted to any person in any calendar year will each be the total number of shares
then available under the Plan. The maximum number of shares subject to other Awards granted to any
person in any calendar year will be the total number of shares available

 

 

under the Plan. The foregoing provisions
will be construed in a manner consistent with
Section 162(m).

	5.	 	ELIGIBILITY AND PARTICIPATION

          The
Administrator will select Participants from among those key Employees and directors of,
and consultants and advisors to, the Company or its Affiliates who, in the opinion of the
Administrator, are in a position to make a significant contribution to the success of the Company
and its Affiliates; provided, that, subject to such express exceptions, if any, as the
Administrator may establish, eligibility shall be further limited to those persons as to whom the
use of a Form S-8 registration statement is permissible. Eligibility for ISOs is limited to
employees of the Company or of a “parent corporation” or “subsidiary corporation” of the Company as
those terms are defined in Section 424 of the Code.

	6.	 	RULES APPLICABLE TO AWARDS

          (a)      All Awards

                    (1)      Award Provisions. The Administrator will determine the terms of all Awards,
subject to the limitations provided herein. By accepting (or, under such rules as the
Administrator may prescribe, being deemed to have accepted) an Award, the Participant agrees to the
terms of the Award and the Plan. Notwithstanding any provision of this Plan to the contrary,
awards of an acquired company that are converted, replaced or adjusted in connection with the
acquisition may contain terms and conditions that are inconsistent with the terms and conditions
specified herein, as determined by the Administrator.

                    (2)      Term of Plan. No Awards may be made after the tenth anniversary of the date that
this Plan is first adopted by the Board of Directors of the Company, but previously granted Awards
may continue beyond that date in accordance with their terms.

                    (3)      Transferability. Neither ISOs nor, except as the Administrator otherwise
expressly provides in accordance with the second sentence of this Section 6(a)(3), other Awards may
be transferred other than by will or by the laws of descent and distribution, and during a
Participant’s lifetime ISOs (and, except as the Administrator otherwise expressly provides in
accordance with the second sentence of this Section 6(a)(3), other Awards requiring exercise) may
be exercised only by the Participant. The Administrator may permit Awards other than ISOs to be
transferred by gift, subject to such limitations as the Administrator may impose.

                    (4)      Vesting, Etc. The Administrator may determine the time or times at which an
Award will vest or become exercisable and the terms on which an Award requiring exercise will
remain exercisable. Without limiting the foregoing, the Administrator may at any time accelerate
the vesting or exercisability of an Award, regardless of any adverse or potentially adverse tax
consequences resulting from such acceleration. Unless the Administrator expressly provides
otherwise, however, the following rules will apply: immediately upon the cessation of

-2-

 

the Participant’s Employment, each Award requiring exercise that is then held by the
Participant or by the Participant’s permitted transferees, if any, will cease to be exercisable and
will terminate, and all other Awards that are then held by the Participant or by the Participant’s
permitted transferees, if any, to the extent not already vested will be forfeited, except that:

          (A) subject to (B) and (C) below, all Stock Options and SARs held by the Participant
or the Participant’s permitted transferees, if any, immediately prior to the cessation of
the Participant’s Employment, to the extent then exercisable, will remain exercisable for
the lesser of (i) a period of three months or (ii) the period ending on the latest date on
which such Stock Option or SAR could have been exercised without regard to this Section
6(a)(4), and will thereupon terminate;

          (B) all Stock Options and SARs held by a Participant or the Participant’s permitted
transferees, if any, immediately prior to the Participant’s death, to the extent then
exercisable, will remain exercisable for the lesser of (i) the one year period ending with
the first anniversary of the Participant’s death or (ii) the period ending on the latest
date on which such Stock Option or SAR could have been exercised without regard to this
Section 6(a)(4), and will thereupon terminate; and

          (C) all Stock Options and SARs held by a Participant or the Participant’s permitted
transferees, if any, immediately prior to the cessation of the Participant’s Employment will
immediately terminate upon such cessation if the Administrator in its sole discretion
determines that such cessation of Employment has resulted for reasons which cast such
discredit on the Participant as to justify immediate termination of the Award or are
otherwise determined by the Administrator to constitute cause. 

                    (5)      Taxes. The Administrator will make such provision for the withholding of taxes
as it deems necessary. The Administrator may, but need not, hold back shares of Stock from an
Award or permit a Participant to tender previously owned shares of Stock in satisfaction of tax
withholding requirements (but not in excess of the minimum withholding required by law).

                    (6)      Dividend Equivalents, Etc. The Administrator may provide for the payment of
amounts in lieu of cash dividends or other cash distributions with respect to Stock subject to an
Award. Any entitlement to dividend equivalents or similar entitlements shall be established and
administered consistent either with exemption from, or compliance with, the requirements of Section
409A.

                    (7)      Rights Limited. Nothing in the Plan will be construed as giving any person the
right to continued employment or service with the Company or its Affiliates, or any rights as a
stockholder except as to shares of Stock actually issued under the Plan. The loss of existing or
potential profit in Awards will not constitute an element of damages in the event of termination

-3-

 

of Employment for any reason, even if the termination is in violation of an obligation of the
Company or any Affiliate to the Participant.

                    (8)      Section 162(m). This Section 6(a)(8) applies to any Performance Award intended
to qualify as performance-based for the purposes of Section 162(m) other than a Stock Option or
SAR. In the case of any Performance Award to which this Section 6(a)(8) applies, the Plan and such
Award will be construed to the maximum extent permitted by law in a manner consistent with
qualifying the Award for such exception. With respect to such Performance Awards, the Administrator
will preestablish, in writing, one or more specific Performance Criteria no later than 90 days
after the commencement of the period of service to which the performance relates (or at such
earlier time as is required to qualify the Award as performance-based under Section 162(m)). Prior
to grant, vesting or payment of the Performance Award, as the case may be, the Administrator will
certify whether the applicable Performance Criteria have been attained and such determination will
be final and conclusive. No Performance Award to which this Section 6(a)(8) applies may be granted
after the first meeting of the stockholders of the Company held in 2012 until the listed
performance measures set forth in the definition of “Performance Criteria” (as originally approved
or as subsequently amended) have been resubmitted to and reapproved by the stockholders of the
Company in accordance with the requirements of Section 162(m) of the Code, unless such grant is
made contingent upon such approval.

                    (9)      Coordination with Other Plans. Awards under the Plan may be granted in tandem
with, or in satisfaction of or substitution for, other Awards under the Plan or awards made under
other compensatory plans or programs of the Company or its Affiliates. For example, but without
limiting the generality of the foregoing, awards under other compensatory plans or programs of the
Company or its Affiliates may be settled in Stock (including, without limitation, Unrestricted
Stock) if the Administrator so determines, in which case the shares delivered shall be treated as
awarded under the Plan (and shall reduce the number of shares thereafter available under the Plan
in accordance with the rules set forth in Section 4). In any case where an award is made under
another plan or program of the Company or its Affiliates and such award is intended to qualify for
the performance-based compensation exception under Section 162(m), and such award is settled by the
delivery of Stock or another Award under the Plan, the applicable Section 162(m) limitations under
both the other plan or program and under the Plan shall be applied to the Plan as necessary (as
determined by the Administrator) to preserve the availability of the Section 162(m)
performance-based compensation exception with respect thereto.

                    (10)      Section 409A. Each Award shall contain such terms as the Administrator
determines, and shall be construed and administered, such that the Award either (i) qualifies for
an exemption from the requirements of Section 409A, or (ii) satisfies such requirements.

                    (11)      Certain Requirements of Corporate Law. Awards shall be granted and administered
consistent with the requirements of applicable Delaware law relating to the

-4-

 

issuance of stock and the consideration to be received therefor, and with the applicable
requirements of the stock exchanges or other trading systems on which the Stock is listed or
entered for trading, in each case as determined by the Administrator.

          (b)      Awards Requiring Exercise

                    (1)      Time And Manner Of Exercise. Unless the Administrator expressly provides
otherwise, an Award requiring exercise by the holder will not be deemed to have been exercised
until the Administrator receives a notice of exercise (in form acceptable to the Administrator)
signed by the appropriate person and accompanied by any payment required under the Award. If the
Award is exercised by any person other than the Participant, the Administrator may require
satisfactory evidence that the person exercising the Award has the right to do so.

                    (2)      Exercise Price. The exercise price (or the base value from which appreciation is
to be measured) of each Award requiring exercise shall be 100% (in the case of an ISO granted to a
ten-percent shareholder within the meaning of subsection (b)(6) of Section 422, 110%) of the fair
market value of the Stock subject to the Award, determined as of the date of grant, or such higher
amount as the Administrator may determine in connection with the grant. No such Award, once
granted, may be repriced other than in accordance with the applicable stockholder approval
requirements of Nasdaq. Fair market value shall be determined by the Administrator consistent with
the applicable requirements of Section 422 and Section 409A.

                    (3)      Payment Of Exercise Price. Where the exercise of an Award is to be accompanied
by payment, payment of the exercise price shall be by cash or check acceptable to the
Administrator, or, if so permitted by the Administrator and if legally permissible, (i) through the
delivery of shares of Stock that have been outstanding for at least six months (unless the
Administrator approves a shorter period) and that have a fair market value equal to the exercise
price, (ii) through a broker-assisted exercise program acceptable to the Administrator, (iii) by
other means acceptable to the Administrator, or (iv) by any combination of the foregoing
permissible forms of payment. The delivery of shares in payment of the exercise price under clause
(i) above may be accomplished either by actual delivery or by constructive delivery through
attestation of ownership, subject to such rules as the Administrator may prescribe.

                    (4)      Maximum Term. Awards requiring exercise will have a maximum term not to exceed
ten (10) years from the date of grant.

	7.	 	EFFECT OF CERTAIN TRANSACTIONS

          (a)      Mergers, etc. Except as otherwise provided in an Award, the following provisions
shall apply in the event of a Covered Transaction:

                    (1)      Assumption or Substitution. If the Covered Transaction is one in which

-5-

 

there is an acquiring or surviving entity, the Administrator may provide for the assumption of
some or all outstanding Awards or for the grant of new awards in substitution therefor by the
acquiror or survivor or an affiliate of the acquiror or survivor.

                    (2)      Cash-Out of Awards. If the Covered Transaction is one in which holders of Stock
will receive upon consummation a payment (whether cash, non-cash or a combination of the
foregoing), the Administrator may provide for payment (a “cash-out”), with respect to some or all
Awards or any portion thereof, equal in the case of each affected Award or portion thereof to the
excess, if any, of (A) the fair market value of one share of Stock (as determined by the
Administrator in its reasonable discretion) times the number of shares of Stock subject to the
Award or such portion, over (B) the aggregate exercise or purchase price, if any, under the Award
or such portion (in the case of an SAR, the aggregate base value above which appreciation is
measured), in each case on such payment terms (which need not be the same as the terms of payment
to holders of Stock) and other terms, and subject to such conditions, as the Administrator
determines; provided, that the Administrator shall not exercise its discretion under this Section
7(a)(2) with respect to an Award or portion thereof providing for “nonqualified deferred
compensation” subject to Section 409A in a manner that would constitute an extension or
acceleration of, or other change in, payment terms if such change would be inconsistent with the
applicable requirements of Section 409A.

                    (3)      Acceleration of Certain Awards. If the Covered Transaction (whether or not there
is an acquiring or surviving entity) is one in which there is no assumption, substitution or
cash-out, each Award requiring exercise will become fully exercisable, and the delivery of any
shares of Stock remaining deliverable under each outstanding Award of Stock Units (including
Restricted Stock Units and Performance Awards to the extent consisting of Stock Units) will be
accelerated and such shares will be delivered, prior to the Covered Transaction, in each case on a
basis that gives the holder of the Award a reasonable opportunity, as determined by the
Administrator, following exercise of the Award or the delivery of the shares, as the case may be,
to participate as a stockholder in the Covered Transaction; provided, that to the extent
acceleration pursuant to this Section 7(a)(3) of an Award subject to Section 409A would cause the
Award to fail to satisfy the requirements of Section 409A, the Award shall not be accelerated and
the Administrator in lieu thereof shall take such steps as are necessary to ensure that payment of
the Award is made in a medium other than Stock and on terms that as nearly as possible, but taking
into account adjustments required or permitted by this Section 7, replicate the prior terms of the
Award.

-6-

 

                    (4)      Termination of Awards Upon Consummation of Covered Transaction. Each Award will
terminate upon consummation of the Covered Transaction, other than the following: (i) Awards
assumed pursuant to Section 7(a)(1) above; (ii) Awards converted pursuant to the proviso in Section
7(a)(3) above into an ongoing right to receive payment other than Stock; and (iii) outstanding
shares of Restricted Stock (which shall be treated in the same manner as other shares of Stock,
subject to Section 7(a)(5) below).

                    (5)      Additional Limitations. Any share of Stock and any cash or other property
delivered pursuant to Section 7(a)(2) or Section 7(a)(3) above with respect to an Award may, in the
discretion of the Administrator, contain such restrictions, if any, as the Administrator deems
appropriate to reflect any performance or other vesting conditions to which the Award was subject
and that did not lapse (and were not satisfied) in connection with the Covered Transaction. In the
case of Restricted Stock that does not vest in connection with the Covered Transaction, the
Administrator may require that any amounts delivered, exchanged or otherwise paid in respect of
such Stock in connection with the Covered Transaction be placed in escrow or otherwise made subject
to such restrictions as the Administrator deems appropriate to carry out the intent of the Plan.

          (b)      Changes in and Distributions With Respect to Stock

                    (1)      Basic Adjustment Provisions. In the event of a stock dividend, stock split or
combination of shares (including a reverse stock split), recapitalization or other change in the
Company’s capital structure, the Administrator shall make appropriate adjustments to the maximum
number of shares specified in Section 4(a) that may be delivered under the Plan and to the maximum
share limits described in Section 4(c), and shall also make appropriate adjustments to the number
and kind of shares of stock or securities subject to Awards then outstanding or subsequently
granted, any exercise prices relating to Awards and any other provision of Awards affected by such
change.

                    (2)      Certain Other Adjustments. The Administrator may also make adjustments of the
type described in Section 7(b)(1) above to take into account distributions to stockholders other
than those provided for in Section 7(a) and 7(b)(1), or any other event, if the Administrator
determines that adjustments are appropriate to avoid distortion in the operation of the Plan and to
preserve the value of Awards made hereunder, having due regard for the qualification of ISOs under
Section 422, the requirements of Section 409A, and for the performance-based compensation rules of
Section 162(m), where applicable.

                    (3)      Continuing Application of Plan Terms. References in the Plan to shares of Stock
will be construed to include any stock or securities resulting from an adjustment pursuant to this
Section 7.

-7-

 

	8.	 	LEGAL CONDITIONS ON DELIVERY OF STOCK

          The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to
remove any restriction from shares of Stock previously delivered under the Plan until: (i) the
Company is satisfied that all legal matters in connection with the issuance and delivery of such
shares have been addressed and resolved; (ii) if the outstanding Stock is at the time of delivery
listed on any stock exchange or national market system, the shares to be delivered have been listed
or authorized to be listed on such exchange or system upon official notice of issuance; and (iii)
all conditions of the Award have been satisfied or waived. If the sale of Stock has not been
registered under the Securities Act of 1933, as amended, the Company may require, as a condition to
exercise of the Award, such representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such Act. The Company may require that certificates evidencing
Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer
applicable to such Stock, and the Company may hold the certificates pending lapse of the applicable
restrictions.

	9.	 	AMENDMENT AND TERMINATION

          The Administrator may at any time or times amend the Plan or any outstanding Award for any
purpose which may at the time be permitted by law, and may at any time terminate the Plan as to any
future grants of Awards; provided, that except as otherwise expressly provided in the Plan the
Administrator may not, without the Participant’s consent, alter the terms of an Award so as to
affect materially and adversely the Participant’s rights under the Award, unless the Administrator
expressly reserved the right to do so at the time of the Award. Any amendments to the Plan shall
be conditioned upon stockholder approval only to the extent, if any, such approval is required by
law (including the Code and applicable stock exchange requirements), as determined by the
Administrator.

	10.	 	OTHER COMPENSATION ARRANGEMENTS

          The existence of the Plan or the grant of any Award will not in any way affect the Company’s
right to Award a person bonuses or other compensation in addition to Awards under the Plan.

	11.	 	MISCELLANEOUS

          (a)      Waiver of Jury Trial. By accepting an Award under the Plan, each Participant
waives any right to a trial by jury in any action, proceeding or counterclaim concerning any rights
under the Plan and any Award, or under any amendment, waiver, consent, instrument, document or
other agreement delivered or which in the future may be delivered in connection therewith, and
agrees that any such action, proceedings or counterclaim shall be tried before a court and not
before a jury. By accepting an Award under the Plan, each Participant certifies that no officer,
representative, or attorney of the Company has represented, expressly or otherwise,

-8-

 

that the Company would not, in the event of any action, proceeding or counterclaim, seek to
enforce the foregoing waivers.

          (b)      Limitation of Liability. Notwithstanding anything to the contrary in the Plan,
neither the Company, nor any Affiliate, nor the Administrator, nor any person acting on behalf of
the Company, any Affiliate, or the Administrator, shall be liable to any Participant or to the
estate or beneficiary of any Participant or to any other holder of an Award by reason of any
acceleration of income, or any additional tax, asserted by reason of the failure of an Award to
satisfy the requirements of Section 422 or Section 409A or by reason of Section 4999 of the Code;
provided, that nothing in this Section 11(b) shall limit the ability of the Administrator or the
Company to provide by separate express written agreement with a Participant for a gross-up payment
or other payment in connection with any such tax or additional tax.

-9-

 

EXHIBIT A

Definition of Terms

          The following terms, when used in the Plan, will have the meanings and be subject to the
provisions set forth below:

          “Administrator”: The Compensation Committee, except that the Compensation Committee may
delegate (i) to one or more of its members such of its duties, powers and responsibilities as it
may determine; (ii) to one or more officers of the Company the power to grant rights or options to
the extent permitted by Section 157(c) of the Delaware General Corporation Law; and (iii) to such
Employees or other persons as it determines such ministerial tasks as it deems appropriate. In the
event of any delegation described in the preceding sentence, the term “Administrator” shall include
the person or persons so delegated to the extent of such delegation.

          “Affiliate”: Any corporation or other entity that stands in a relationship to the Company
that would result in the Company and such corporation or other entity being treated as one employer
under Section 414(b) and Section 414(c) of the Code, except that in determining eligibility for the
grant of a Stock Option or SAR by reason of service for an Affiliate, Sections 414(b) and 414(c) of
the Code shall be applied by substituting “at least 50%” for “at least 80%” under Section
1563(a)(1), (2) and (3) of the Code and Treas. Regs. § 1.414(c)-2; provided, that to the extent
permitted under Section 409A, “at least 20%” shall be used in lieu of “at least 50%”; and further
provided, that the lower ownership threshold described in this definition (50% or 20% as the case
may be) shall apply only if the same definition of affiliation is used consistently with respect to
all compensatory stock options or stock awards (whether under the Plan or another plan). The
Company may at any time by amendment provide that different ownership thresholds (consistent with
Section 409A) apply but any such change shall not be effective for twelve (12) months.

          “Award”: Any or a combination of the following:

          (i) Stock Options.

          (ii) SARs.

          (iii) Restricted Stock.

          (iv) Unrestricted Stock.

          (v) Stock Units, including Restricted Stock Units.

-10-

 

          (vi) Performance Awards.

          (vii) Cash Awards.

          (viii) Awards (other than Awards described in (i) through (vii) above) that are
convertible into or otherwise based on Stock.

          “Board”: The Board of Directors of the Company.

          “Cash Award”: An Award denominated in cash.

          “Code”: The U.S. Internal Revenue Code of 1986 as from time to time amended and in effect, or
any successor statute as from time to time in effect.

          “Compensation Committee”: The Compensation Committee of the Board.

          “Company”: RXi Pharmaceuticals Corporation.

          “Covered Transaction”: Any of (i) a consolidation, merger, or similar transaction or series
of related transactions, including a sale or other disposition of stock, in which the Company is
not the surviving corporation or which results in the acquisition of all or substantially all of
the Company’s then outstanding common stock by a single person or entity or by a group of persons
and/or entities acting in concert, (ii) a sale or transfer of all or substantially all the
Company’s assets, or (iii) a dissolution or liquidation of the Company. Where a Covered
Transaction involves a tender offer that is reasonably expected to be followed by a merger
described in clause (i) (as determined by the Administrator), the Covered Transaction shall be
deemed to have occurred upon consummation of the tender offer.

          “Employee”: Any person who is employed by the Company or an Affiliate.

          “Employment”: A Participant’s employment or other service relationship with the Company and
its Affiliates. Employment will be deemed to continue, unless the Administrator expressly provides
otherwise, so long as the Participant is employed by, or otherwise is providing services in a
capacity described in Section 5 to the Company or its Affiliates. If a Participant’s employment or
other service relationship is with an Affiliate and that entity ceases to be an Affiliate, the
Participant’s Employment will be deemed to have terminated when the entity ceases to be an
Affiliate unless the Participant transfers Employment to the Company or its remaining Affiliates.

          “ISO”: A Stock Option intended to be an “incentive stock option” within the meaning of
Section 422. Each option granted pursuant to the Plan will be treated as providing by its terms
that it is to be a non-incentive stock option unless, as of the date of grant, it is expressly
designated as an ISO.

-11-

 

          “Participant”: A person who is granted an Award under the Plan.

          “Performance Award”: An Award subject to Performance Criteria. The Committee in its
discretion may grant Performance Awards that are intended to qualify for the performance-based
compensation exception under Section 162(m) and Performance Awards that are not intended so to
qualify.

          “Performance Criteria”: Specified criteria, other than the mere continuation of Employment or
the mere passage of time, the satisfaction of which is a condition for the grant, exercisability,
vesting or full enjoyment of an Award. For purposes of Awards that are intended to qualify for the
performance-based compensation exception under Section 162(m), a Performance Criterion will mean an
objectively determinable measure of performance relating to any or any combination of the following
(measured either absolutely or by reference to an index or indices and determined either on a
consolidated basis or, as the context permits, on a divisional, subsidiary, line of business,
project or geographical basis or in combinations thereof): sales; revenues; assets; expenses;
earnings before or after deduction for all or any portion of interest, taxes, depreciation, or
amortization, whether or not on a continuing operations or an aggregate or per share basis; return
on equity, investment, capital or assets; one or more operating ratios; borrowing levels, leverage
ratios or credit rating; market share; capital expenditures; cash flow; stock price; stockholder
return; sales of particular products or services; customer acquisition or retention; acquisitions
and divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs,
split-ups and the like; reorganizations; or recapitalizations, restructurings, financings (issuance
of debt or equity) or refinancings. A Performance Criterion and any targets with respect thereto
determined by the Administrator need not be based upon an increase, a positive or improved result
or avoidance of loss. To the extent consistent with the requirements for satisfying the
performance-based compensation exception under Section 162(m), the Administrator may provide in the
case of any Award intended to qualify for such exception that one or more of the Performance
Criteria applicable to such Award will be adjusted in an objectively determinable manner to reflect
events (for example, but without limitation, acquisitions or dispositions) occurring during the
performance period that affect the applicable Performance Criterion or Criteria.

          “Plan”:
The RXi Pharmaceuticals Corporation 2007 Incentive Plan as from time to time amended
and in effect.

          “Restricted Stock”: Stock subject to restrictions requiring that it be redelivered or offered
for sale to the Company if specified conditions are not satisfied.

          “Restricted Stock Unit”: A Stock Unit that is, or as to which the delivery of Stock or cash
in lieu of Stock is, subject to the satisfaction of specified performance or other vesting
conditions.

-12-

 

          “SAR”: A right entitling the holder upon exercise to receive an amount (payable in cash or in
shares of Stock of equivalent value) equal to the excess of the fair market value of the shares of
Stock subject to the right over the base value from which appreciation under the SAR is to be
measured.

          “Section 409A”: Section 409A of the Code.

          “Section 422”: Section 422 of the Code.

          “Section 162(m)”: Section 162(m) of the Code.

          “Stock”: Common Stock of the Company, par value $0.0001 per share.

          “Stock Option”: An option entitling the holder to acquire shares of Stock upon payment of the
exercise price.

          “Stock Unit”: An unfunded and unsecured promise, denominated in shares of Stock, to deliver
Stock or cash measured by the value of Stock in the future.

          “Unrestricted Stock”: Stock not subject to any restrictions under the terms of the Award.

-13-exv10w20

 

Exhibit 10.20

Form of Incentive Stock Option

Granted Under RXi Pharmaceuticals Corporation 2007 Incentive Plan

			
	1.	 	Grant of Option.

     This certificate evidences an incentive stock option (this “Stock Option”) granted by RXi
Pharmaceuticals Corporation, a Delaware corporation (the “Company”), on [___ ] to [___],
an employee of the Company or its subsidiaries (the “Participant”) pursuant to the Company’s 2007
Incentive Plan (as from time to time in effect, the “Plan”). Under this Stock Option, the
Participant may purchase, in whole or in part, on the terms herein provided, a total of [___]
shares of common stock of the Company (the “Shares”) at $[___] per Share, which is not less than
the fair market value of the Shares on the date of grant of this Stock Option. The latest date on
which this Stock Option, or any part thereof, may be exercised is [___](the “Final Exercise
Date”). The Stock Option evidenced by this certificate is intended to be an incentive stock option
as defined in section 422 of the Internal Revenue Code of 1986, as amended from time to time (the
“Code”).

     This Stock Option is exercisable in the following installments prior to the Final Exercise
Date:

 

 

 

 

Notwithstanding the foregoing, upon termination of the Participant’s Employment, any portion of
this Stock Option that is not then exercisable will immediately expire and the remainder of this
Stock Option will remain exercisable for three months (unless termination of the Participant’s
Employment resulted from reasons that in the determination of the Administrator cast such discredit
on the Participant as to justify immediate forfeiture of this Stock Option, in which case this
entire Option shall immediately expire and no portion thereof shall remain exercisable); provided,
that any portion of this Stock Option held by the Participant immediately prior to the
Participant’s death, to the extent then exercisable, will remain exercisable for one year following
the Participant’s death; and further provided, that in no event shall any portion of this Stock
Option be exercisable after the Final Exercise Date.

1

 

			
	2.	 	Exercise of Stock Option.

     Each election to exercise this Stock Option shall be in writing, signed by the Participant or
the Participant’s executor, administrator, or legally appointed representative (in the event of the
Participant’s incapacity) or the person or persons to whom this Stock Option is transferred by will
or the applicable laws of descent and distribution (collectively, the “Option Holder”), and
received by the Company at its principal office, accompanied by this certificate and payment in
full as provided in the Plan. Subject to the further terms and conditions provided in the Plan,
the purchase price may be paid as follows: (i) by delivery of cash or check acceptable to the
Administrator; (ii) upon and following an initial public offering of the Company and to the extent
permitted by applicable law (as determined by the Administrator), through a broker-assisted
exercise program acceptable to the Administrator; or (iii) through any combination of the
foregoing. In the event that this Stock Option is exercised by an Option Holder other than the
Participant, the Company will be under no obligation to deliver Shares hereunder unless and until
it is satisfied as to the authority of the Option Holder to exercise this Stock Option.

			
	3.	 	Notice of Disposition.

     The person exercising this Stock Option shall notify the Company when making any disposition
of the Shares acquired upon exercise of this Stock Option, whether by sale, gift or otherwise.

			
	4.	 	Restrictions on Transfer of Shares.

     If at the time this Stock Option is exercised the Company or any of its stockholders is a
party to any agreement restricting the transfer of any outstanding shares of the Company’s common
stock, the Administrator may provide that this Stock Option may be exercised only if the Shares so
acquired are made subject to the transfer restrictions set forth in that agreement (or if more than
one such agreement is then in effect, the agreement or agreements specified by the Administrator).

     If requested by the Corporation and the managing underwriter of an offering by the Corporation
of Common Stock pursuant to a registration statement under the Securities Act of 1933, as amended,
each stockholder who acquires shares by exercise of this Option shall agree, by executing and
delivering such form of agreement as the Company and such underwriter shall reasonably request, not
to sell publicly or otherwise transfer or dispose of any shares held by such stockholder or other
securities of the Corporation held by such stockholder for a specified period of time (not to
exceed 180 days) immediately following the effective date of such registration statement; provided,
that such agreement shall apply only to the initial public offering of the Corporation’s
securities.

			
	5.	 	Withholding; Agreement to Provide Security.

2

 

     If at the time this Stock Option is exercised the Company determines that under applicable law
and regulations it could be liable for the withholding of any federal or state tax upon exercise or with respect to a disposition of any Shares acquired upon exercise of this
Stock Option, this Stock Option may not be exercised unless the person exercising this Stock Option
remits to the Company any amounts determined by the Company to be required to be withheld upon
exercise (or makes other arrangements satisfactory to the Company for the payment of such taxes)
and gives such security as the Company deems adequate to meet its potential liability for the
withholding of tax upon a disposition of the Shares and agrees to augment such security from time
to time in any amount reasonably determined by the Company to be necessary to preserve the adequacy
of such security.

			
	6.	 	Nontransferability of Stock Option.

     This Stock Option is not transferable by the Participant otherwise than by will or the laws of
descent and distribution and is exercisable during the Participant’s lifetime only by the
Participant (or in the event of the Participant’s incapacity, the person or persons legally
appointed to act on the Participant’s behalf).

			
	7.	 	Provisions of the Plan.

     This Stock Option is subject to the provisions of the Plan, which are incorporated herein by
reference. A copy of the Plan as in effect on the date of the grant of this Stock Option has been
furnished to the Participant. By exercising all or any part of this Stock Option, the Participant
agrees to be bound by the terms of the Plan and this certificate. All initially capitalized terms
used herein will have the meaning specified in the Plan, unless another meaning is specified
herein.

3

 

     IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly
authorized officer.

	 	 	 	 	 
	 	RXi Pharmaceuticals Corporation
 	 
	 	By:  	 	 
	 	 	 	 
	 	 	 	 
	 

Dated: [_________________]

	 	 	 	 	 
	 	Acknowledged and agreed:

 	 
	 	 	 
	 	[Name of Participant] 	 
	 	 	 
	 

Dated: [_________________]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00131-of-00352.parquet"}]]