Document:

Form of Indemnification Agreement

 EXHIBIT 10.20 
  
 FORM OF INDEMNIFICATION AGREEMENT 
  
 THIS INDEMNIFICATION AGREEMENT (the “Agreement”), effective as of April     , 2004, is
made between Salmedix, Inc., a Delaware corporation (the “Corporation”), and [                    ] (the “Indemnitee”),

  
 W I T N E S S E T H: 
  
 WHEREAS, Indemnitee is a member of the board of directors of the Corporation
(the “Board of Directors”) and/or is an officer of the Corporation and in such capacity is performing a valuable service for the Corporation; and 
  
 WHEREAS, Indemnitee is willing to serve, continue to serve, and take on additional service for or on behalf of the Corporation on the condition that he be
indemnified as herein provided; and 
  
 WHEREAS, it is intended
that Indemnitee shall be paid promptly by the Corporation all amounts necessary to effectuate in full the indemnity provided herein. 
  
 NOW, THEREFORE, in consideration of the premises and the covenants in this Agreement, and intending to be legally bound hereby, the parties hereto agree
as follows: 
  

	 	1.	Services by Indemnitee. 

  
 Indemnitee agrees to serve as a director and/or officer of the Corporation so long as he is duly appointed or elected and qualified in
accordance with the applicable provisions of the Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) and Bylaws of the Corporation or any subsidiary of the Corporation and until such time as he resigns or
fails to stand for election or is removed from his position. Indemnitee may at any time and for any reason resign or be removed from such position (subject to any other contractual obligation or other obligation imposed by operation of law), in
which event the Corporation shall have no obligation under this Agreement to continue Indemnitee in any such position. 
  

	 	2.	Indemnification. 

  
 (a) The Corporation shall indemnify Indemnitee against Expenses and Liabilities in connection with any Proceeding arising out of acts or
omissions of Indemnitee in his capacity as a director and/or an officer of the Corporation or in his capacity serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while
serving as a director, officer, employee or agent, occurring subsequent to the effective date hereof to the fullest extent permitted by applicable law or the Certificate of Incorporation of the Corporation in effect on the effective date hereof or
as such law or Certificate of Incorporation may from time to time 

  

 
be amended (but, in the case of any such amendment, only to the extent such amendment permits the Corporation to provide broader indemnification rights than
the law or Certificate of Incorporation permitted the Corporation to provide before such amendment). The right to indemnification provided in the Certificate of Incorporation shall be presumed to have been relied upon by Indemnitee in serving or
continuing to serve the Corporation and shall be enforceable as a contract right. Without diminishing the scope of the indemnification provided by this Section 2, the Corporation shall indemnify Indemnitee whenever he is or was a party or is
threatened to be made a party to any Proceeding, including without limitation any such Proceeding brought by or in the right of the Corporation, because he is or was a director and/or officer of the Corporation or because of anything done or not
done by him in such capacity, against Expenses and Liabilities actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding, including the costs of any investigation, defense, settlement or appeal, except that
no indemnification shall be made with respect to any claim, issue or matter if Indemnitee was finally adjudged to be liable to the Corporation by a court of competent jurisdiction due to his gross negligence or willful misconduct unless and to the
extent that a Delaware Court of Chancery or the court in which the action was heard determines that Indemnitee is entitled to indemnification for such amounts as the court deems proper. In addition to, and not as a limitation of, the foregoing, the
rights of indemnification of Indemnitee provided under this Agreement shall include those rights set forth in Sections 3, 7, 8 and 13 below. 
  
 (b) Indemnitee shall be paid promptly by the Corporation all amounts necessary to effectuate the foregoing indemnity. 
  

	 	3.	Advancement of Expenses. 

  
 All reasonable Expenses incurred by or on behalf of Indemnitee shall be advanced from time to time by the Corporation to him within thirty
(30) days after the Corporation’s receipt of a written request for an advance of Expenses, whether prior to or after final disposition of a Proceeding (except to the extent that there has been a Final Adverse Determination that Indemnitee is
not entitled to be indemnified for such Expenses), including without limitation any Proceeding brought by or in the right of the Corporation. The written request for an advancement of any and all Expenses under this paragraph shall contain
reasonable detail of the Expenses incurred by Indemnitee. If required by law at the time of such advance, Indemnitee hereby agrees to repay the amounts advanced if it is ultimately determined that Indemnitee is not entitled to be indemnified
pursuant to the terms of this Agreement. 
  

	 	4.	Limitations. 

  
 The foregoing indemnity and advancement of Expenses shall apply only to the extent that Indemnitee has not been indemnified and reimbursed
pursuant to such insurance as the Corporation may maintain for Indemnitee’s benefit, the Certificate of Incorporation, Bylaws, or otherwise; provided, however, that notwithstanding the availability of such other indemnification and
reimbursement, Indemnitee may claim indemnification and advancement of Expenses pursuant to this Agreement by assigning to the Corporation, at its request, Indemnitee’s claims under such insurance to the extent Indemnitee has been paid by the
Corporation. 
  

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	 	5.	Insurance and Funding. 

  
 The Corporation may purchase and maintain insurance to protect itself and/or Indemnitee against any Expenses and Liabilities in connection
with any Proceeding to the fullest extent permitted by applicable laws. The Corporation may create a trust fund, grant an interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be
necessary to effect indemnification or advancement of Expenses as provided in this Agreement. 
  

	 	6.	Procedure for Determination of Entitlement to Indemnification. 

  
 (a) Whenever Indemnitee believes that he is entitled to indemnification pursuant to this Agreement, Indemnitee shall submit a written
request for indemnification to the Corporation. Any request for indemnification shall include sufficient documentation or information reasonably available to Indemnitee to support his claim for indemnification. Indemnitee shall submit his claim for
indemnification within a reasonable time not to exceed five years after any judgment, order, settlement, dismissal, arbitration award, conviction, acceptance of a plea of nolo contendere or its equivalent, final termination or other disposition or
partial disposition of any Proceeding, whichever is the later date for which Indemnitee requests indemnification. The President or the Secretary or other appropriate officer shall, promptly upon receipt of Indemnitee’s request for
indemnification, advise the Board of Directors in writing that Indemnitee has made such request. Determination of Indemnitee’s entitlement to indemnification shall be made not later than ninety (90) days after the Corporation’s receipt of
Indemnitee’s written request for such indemnification. 
  
 (b) The Indemnitee shall be entitled to select the forum in which Indemnitee’s request for indemnification will be heard, which selection shall be included in the written request for indemnification required in
Section 6(a). The forum shall be any one of the following: 
  
 (i) The stockholders of the Corporation; 
  
 (ii) A quorum of the Board of Directors consisting of Disinterested Directors; 
  
 (iii) Independent Legal Counsel, who shall make the determination in a written opinion; or 
  
 (iv) A panel of three arbitrators, one selected by the
Corporation, another by Indemnitee and the third by the first two arbitrators selected. If for any reason three arbitrators are not selected within thirty (30) days after the appointment of the first arbitrator, then selection of additional
arbitrators shall be made by the American Arbitration Association. If any arbitrator resigns or is unable to serve in such capacity for any reason, the American Arbitration Association shall select his replacement. The arbitration shall be conducted
pursuant to the commercial arbitration rules of the American Arbitration Association now in effect. 
  
 If Indemnitee fails to make such designation, his claim shall be determined by an appropriate court of the State of Delaware. 

 

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	 	7.	Fees and Expenses of Independent Legal Counsel. 

  
 The Corporation agrees to pay the reasonable fees and expenses of Independent Legal Counsel or a panel of three arbitrators should such
Independent Counsel or such panel of arbitrators be retained to make a determination of Indemnitee’s entitlement to indemnification pursuant to Section 6 of this Agreement, and to fully indemnify such Independent Counsel or arbitrators against
any and all expenses and losses incurred by any of them arising out of or relating to this Agreement or their engagement pursuant hereto. 
  

	 	8.	Remedies of Indemnitee. 

  
 (a) In the event that (i) a determination pursuant to Section 6 hereof is made that Indemnitee is not entitled to indemnification, (ii)
advances of Expenses are not made pursuant to this Agreement, (iii) payment has not been timely made following a determination of entitlement to indemnification pursuant to this Agreement, or (iv) Indemnitee otherwise seeks enforcement of this
Agreement, Indemnitee shall be entitled to a final adjudication in an appropriate court of the State of Delaware of his rights. Alternatively, Indemnitee at his option may seek an award in arbitration to be conducted by a single arbitrator pursuant
to the commercial arbitration rules of the American Arbitration Association now in effect, whose decision is to be made within ninety (90) days following the filing of the demand for arbitration. The Corporation shall not oppose Indemnitee’s
right to seek any such adjudication or arbitration award. 
  
 (b) In the event that a determination that Indemnitee is not entitled to indemnification, in whole or in part, has been made pursuant to Section 6 hereof, the decision in the judicial proceeding or arbitration
provided in paragraph (a) of this Section 8 shall be made de novo and Indemnitee shall not be prejudiced by reason of a determination that he is not entitled to indemnification. 
  
 (c) If a determination that Indemnitee is entitled to indemnification has been made pursuant to Section 6
hereof or otherwise pursuant to the terms of this Agreement, the Corporation shall be bound by such determination in the absence of (i) a misrepresentation of a material fact by Indemnitee or (ii) a specific finding (which has become final) by an
appropriate court of the State of Delaware that all or any part of such indemnification is expressly prohibited by law. 
  
 (d) In any court proceeding pursuant to this Section 8, the Corporation shall be precluded from asserting that the procedures and
presumptions of this Agreement are not valid, binding and enforceable. The Corporation shall stipulate in any such court or before any such arbitrator that the Corporation is bound by all the provisions of this Agreement and is precluded from making
any assertion to the contrary. 
  
 (e) Expenses
reasonably incurred by Indemnitee in connection with seeking enforcement of this Agreement or to recover damages for breach of this Agreement pursuant to this Section 8 shall be borne by the Corporation if Indemnitee is ultimately successful in such
action. 
  

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	 	9.	Presumptions and Effect of Certain Proceedings. 

  
 No initial finding by the Board, its counsel, Independent Counsel, arbitrators or the stockholders shall be effective to deprive
Indemnitee of the protection of this indemnity, nor shall a court or other forum to which Indemnitee may apply for enforcement of this indemnity give any weight to any such adverse finding in deciding any issue before it. Upon making a request for
indemnification, Indemnitee shall be presumed to be entitled to indemnification under this Agreement and the Company shall have the burden of proof to overcome that presumption in reaching any contrary determination. The termination of any
Proceeding by judgment, order, settlement, arbitration award or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, (a) adversely affect the rights of Indemnitee to indemnification except as indemnification may be
expressly prohibited under this Agreement, (b) create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or (c) with respect to any
criminal action or proceeding, create a presumption that Indemnitee had reasonable cause to believe that his conduct was unlawful. 
  

	 	10.	Modification, Waiver, Termination and Cancellation. 

  
 No supplement, modification, termination, cancellation or amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. 
  

	 	11.	Notice by Indemnitee and Defense of Claim. 

  
 Indemnitee shall promptly notify the Corporation in writing upon being served with any summons, citation, subpoena, complaint, indictment,
information or other document relating to any matter, whether civil, criminal, administrative or investigative, but the omission so to notify the Corporation will not relieve it from any liability which it may have to Indemnitee if such omission
does not prejudice the Corporation’s rights. If such omission does prejudice the Corporation’s rights, the Corporation will be relieved from liability only to the extent of such prejudice; nor will such omission relieve the Corporation
from any liability which it may have to Indemnitee otherwise than under this Agreement. With respect to any Proceeding as to which Indemnitee notifies the Corporation of the commencement thereof: 
  
 (a) The Corporation will be entitled to participate therein
at its own expense; and 
  
 (b) The Corporation
jointly with any other indemnifying party similarly notified will be entitled to assume the defense thereof, with counsel reasonably satisfactory to Indemnitee; provided, however, that the Corporation shall not be entitled to assume the defense of
any Proceeding if Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Corporation and Indemnitee with respect to such Proceeding. The Corporation will not be liable to Indemnitee under this Agreement for
any expenses subsequently incurred by Indemnitee in connection with the defense thereof, other than reasonable costs of investigation or as otherwise provided below. After notice from the Corporation to Indemnitee of its election to assume the
defense thereof, (i) the Corporation shall pay the fees and expenses of counsel selected by the Indemnitee, promptly after 

  

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statements therefor are received, and otherwise advance to such Indemnitee upon request reimbursement of documented expenses reasonably incurred, and (ii)
the Corporation will cooperate in the defense of any such matter; provided, however, that (A) the Corporation shall be obligated pursuant to this section to pay for only one firm of counsel for all Indemnitees in any jurisdiction, except to
the extent there is, in the opinion of counsel to an Indemnitee, under applicable standards of professional conduct, a conflict on any significant issue between the positions of such Indemnitee and any other Indemnitee, in which case each Indemnitee
with a conflicting position on a significant issue shall be entitled to retain separate counsel mutually satisfactory to the Corporation and such Indemnitee, (B) the Indemnitees shall cooperate in the defense of any such matter and (C) the
Corporation shall not be liable for any settlement effected without its prior written consent (which consent may not be unreasonably withheld or delayed). Indemnitee shall have the right to employ Indemnitee’s own counsel in such Proceeding but
except as provided above the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Indemnitee unless: 
  
 (i) The employment of counsel by Indemnitee has been
authorized by the Corporation; 
  
 (ii)
Indemnitee shall have reasonably concluded that counsel engaged by the Corporation may not adequately represent Indemnitee; 
  
 (iii) The Corporation shall not in fact have employed counsel to assume the defense in such Proceeding or shall not in fact have assumed
such defense and be acting in connection therewith with reasonable diligence; 
  
 in each of which cases the fees and expenses of such counsel shall be at the expense of the Corporation. 
  
 (c) The Corporation shall not settle any Proceeding in any manner which would impose any penalty or limitation on Indemnitee without
Indemnitee’s written consent; provided, however, that Indemnitee will not unreasonably withhold his consent to any proposed settlement. 
  

	 	12.	Notices. 

  
 All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so
mailed: 
  
 (a) If to Indemnitee, to: 

 
 [                            ] 
 [                            ] 
 [                            ] 
 [                            ] 
  

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 or to such other address as may have been furnished to Indemnitee 
  
 (b) If to the Corporation, to: 
  
 Salmedix, Inc. 
 9380 Judicial Drive 
 San Diego, CA 92121

  
 or to such other address as may have been furnished to Indemnitee by the
Corporation or to the Corporation by Indemnitee, as the case may be. 
  

	 	13.	Nonexclusivity. 

  
 The rights of Indemnitee hereunder shall not be deemed exclusive of any other rights to which Indemnitee may now or in the future be
entitled under the Delaware General Corporation Law, the Corporation’s Certificate of Incorporation or Bylaws, or any agreements, vote of stockholders, resolution of the Board of Directors or otherwise. 
  

	 	14.	Certain Definitions. 

  
 (a) “Disinterested Director” shall mean a director of the Corporation who is not or was not a party to the Proceeding in respect
of which indemnification is being sought by Indemnitee. 
  
 (b) “Expenses” shall include all direct and indirect costs (including, without limitation, attorneys’ fees, retainers, court costs, transcripts, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, all other disbursements or out-of-pocket expenses and reasonable compensation for time spent by Indemnitee for which he is otherwise not compensated by
the Corporation) actually and reasonably incurred in connection with a Proceeding or establishing or enforcing a right to indemnification under this Agreement, applicable law or otherwise; provided, however, that “Expenses” shall not
include any Liabilities. 
  
 (c) “Final
Adverse Determination” shall mean that a determination that Indemnitee is not entitled to indemnification shall have been made pursuant to Section 6 hereof and either (i) a final adjudication in a Delaware court or decision of an arbitrator
pursuant to Section 8(a) hereof shall have denied Indemnitee’s right to indemnification hereunder, or (ii) Indemnitee shall have failed to file a complaint in a Delaware court or seek an arbitrator’s award pursuant to Section 8(a) for a
period of one hundred twenty (120) days after the determination made pursuant to Section 6 hereof. 
  
 (d) “Indemnification Period” shall mean the period of time during which Indemnitee shall continue to serve as a director and/or
as an officer of the Corporation, and thereafter so long as Indemnitee shall be subject to any possible Proceeding arising out of acts or omissions of Indemnitee as a director and/or as an officer of the Corporation. 
  
 (e) “Independent Legal Counsel” shall mean a law
firm or a member of a law firm selected by the Corporation and approved by Indemnitee (which approval shall not be unreasonably withheld) and that neither is presently nor in the past five years has been retained 

  

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to represent: (i) the Corporation, (ii) the Indemnitee or (iii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent Legal Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the
Corporation or Indemnitee in an action to determine Indemnitee’s right to indemnification under this Agreement. 
  
 (f) “Liabilities” shall mean liabilities of any type whatsoever including, but not limited to, any judgments, fines, ERISA
excise taxes and penalties, penalties and amounts paid in settlement (including all interest assessments and other charges paid or payable in connection with or in respect of such judgments, fines, penalties or amounts paid in settlement) of any
proceeding. 
  
 (g) “Proceeding” shall
mean any threatened, pending or completed action, claim, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other proceeding whether civil, criminal, administrative or investigative, including any
appeal therefrom. 
  

	 	15.	Binding Effect, Duration and Scope of Agreement. 

  
 This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors
and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Corporation), spouses, heirs and personal and legal representatives. This Agreement
shall continue in effect during the Indemnification Period, regardless of whether Indemnitee continues to serve as a director and/or officer. 
  

	 	16.	Severability. 

  
 If any provision or provisions of this Agreement (or any portion thereof) shall be held to be invalid, illegal or unenforceable for any
reason whatsoever: 
  
 (a) The validity, legality
and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby; and 
  
 (b) To the fullest extent legally possible, the provisions of this Agreement shall be construed so as to give effect to the intent of any
provision held invalid, illegal or unenforceable. 
  

	 	17.	Governing Law and Interpretation of Agreement. 

  
 This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, as applied to
contracts between Delaware residents entered into and to be performed entirely within Delaware. If the laws of the State of Delaware are hereafter amended to permit the Corporation to provide broader indemnification rights than said laws permitted
the Corporation to provide prior to such amendment, the rights of indemnification and advancement of expenses conferred by this Agreement shall automatically be broadened to the fullest extent permitted by the laws of the State of Delaware, as so
amended. 
  

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	 	18.	Consent to Jurisdiction. 

  
 The Corporation and Indemnitee each irrevocably consent to the jurisdiction of the courts of the State of Delaware for all purposes in
connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be brought only in the state courts of the State of Delaware. 
  

	 	19.	Entire Agreement. 

  
 This Agreement represents the entire agreement between the parties hereto, and there are no other agreements, contracts or understandings
between the parties hereto with respect to the subject matter of this Agreement, except as specifically referred to herein or as provided in Section 13 hereof. 
  

	 	20.	Counterparts. 

  
 This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of
which together shall constitute one and the same Agreement. 
  
 IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written. 
  

			
	SALMEDIX, INC.
		
	By	 	 
	 	 	

	
	INDEMNITEE
	
	

	[                                      
  ]

  
 [COUNTERPART
SIGNATURE PAGE TO INDEMNIFICATION AGREEMENT] 
  

 Schedule A 
  
 David S. Kabakoff 
 F. Andrew Dorr 
 Anita I. Busquets 
 Wendy S. Johnson 
 Gary T. Elliott 
 Elizabeth Clark Moore 
 Pratik Multani

 Brian G. Atwood 
 Dennis A.
Carson 
 Christine Cordaro 
 Aaron Davidson 
 Karin Eastham 
 Antonio Grillo-Lopez 
 Arnold L. Oronsky 
 Deepa R. Pakianathan 
 Samuel P. Wertheimer2001 Stock Option/Stock Issuance Plan

 EXHIBIT 10.21 
  
 SALMEDIX, INC. 
  
 2001 STOCK OPTION/STOCK ISSUANCE PLAN 
  
 ARTICLE ONE 
  
 GENERAL PROVISIONS 
  

	 	I.	PURPOSE OF THE PLAN 

  
 This 2001 Stock Option/Stock Issuance Plan is intended to promote the interests of Salmedix, Inc., a Delaware corporation, by providing
eligible persons in the Corporation’s employ or service with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to continue in such employ or service.

  
 Capitalized terms herein shall have the
meanings assigned to such terms in the attached Appendix. 
  

	 	II.	STRUCTURE OF THE PLAN 

  
 A. The Plan shall be divided into two (2) separate equity programs: 
  
 (i) the Option Grant Program under which eligible persons may, at the discretion of the Plan Administrator,
be granted options to purchase shares of Common Stock, and 
  
 (ii) the Stock Issuance Program under which eligible persons may, at the discretion of the Plan Administrator, be issued shares of Common Stock directly, either through the immediate purchase of such shares or as a
bonus for services rendered the Corporation (or any Parent or Subsidiary). 
  
 B. The provisions of Articles One and Four shall apply to both equity programs under the Plan and shall accordingly govern the interests of all persons under the Plan. 
  

	 	III.	ADMINISTRATION OF THE PLAN 

  
 A. The Plan shall be administered by the Board. However, any or all administrative functions otherwise exercisable by the Board may be
delegated to the Committee. Members of the Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the Board at any time. The Board may also at any time terminate the functions of the Committee and
reassume all powers and authority previously delegated to the Committee. 
  

 B. The Plan Administrator shall have full power and authority (subject to the provisions
of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Plan and to make such determinations under, and issue such interpretations of, the Plan and any outstanding options or stock issuances
thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator shall be final and binding on all parties who have an interest in the Plan or any option grant or stock issuance thereunder. 
  

	 	IV.	ELIGIBILITY 

  
 A. The persons eligible to participate in the Plan are as follows: 
  
 (i) Employees, 
  
 (ii) non-employee members of the Board or the non-employee members of the board of directors of any Parent or Subsidiary, and 

 
 (iii) consultants and other independent advisors who
provide services to the Corporation (or any Parent or Subsidiary). 
  
 B. The Plan Administrator shall have full authority to determine, (i) with respect to the grants made under the Option Grant Program, which eligible persons are to receive such grants, the time or times when those
grants are to be made, the number of shares to be covered by each such grant, the status of the granted option as either an Incentive Option or a Non-Statutory Option, the time or times when each option is to become exercisable, the vesting schedule
(if any) applicable to the option shares and the maximum term for which the option is to remain outstanding, and (ii) with respect to stock issuances made under the Stock Issuance Program, which eligible persons are to receive such issuances, the
time or times when those issuances are to be made, the number of shares to be issued to each Participant, the vesting schedule (if any) applicable to the issued shares and the consideration to be paid by the Participant for such shares. 

 
 C. The Plan Administrator shall have the absolute
discretion either to grant options in accordance with the Option Grant Program or to effect stock issuances in accordance with the Stock Issuance Program. 
  

	 	V.	STOCK SUBJECT TO THE PLAN 

  
 A. The stock issuable under the Plan shall be shares of authorized but unissued or reacquired Common Stock. The maximum number of shares
of Common Stock which may be issued over the term of the Plan shall not exceed two million five hundred thousand (2,500,000) shares. 
  
 B. Shares of Common Stock subject to outstanding options shall be available for subsequent issuance under the Plan to the extent (i) the
options expire or terminate for any reason prior to exercise in full or (ii) the options are cancelled in accordance with the cancellation-regrant provisions of Article Two. Unvested shares issued under the Plan and subsequently repurchased by the
Corporation, at the option exercise or direct issue price paid per share, pursuant to the Corporation’s repurchase rights under the Plan shall be added back to the number of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent option grants or direct stock issuances under the Plan. 
  

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 C. Should any change be made to the Common Stock by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares or other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration, appropriate adjustments shall be made to (i) the maximum
number and/or class of securities issuable under the Plan and (ii) the number and/or class of securities and the exercise price per share in effect under each outstanding option in order to prevent the dilution or enlargement of benefits thereunder.
The adjustments determined by the Plan Administrator shall be final, binding and conclusive. In no event shall any such adjustments be made in connection with the conversion of one or more outstanding shares of the Corporation’s preferred stock
into shares of Common Stock. 
  

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 ARTICLE TWO 
 OPTION GRANT PROGRAM 
  

	 	I.	OPTION TERMS 

  
 Each option shall be evidenced by one or more documents in the form approved by the Plan Administrator; provided, however, that
each such document shall comply with the terms specified below. Each document evidencing an Incentive Option shall, in addition, be subject to the provisions of the Plan applicable to such options. 
  
 A. Exercise Price. 
  
 1. The exercise price per share shall be fixed by the Plan
Administrator in accordance with the following provisions: 
  
 (i) The exercise price per share shall not be less than eighty-five percent (85%) of the Fair Market Value per share of Common Stock on the option grant date. 
  
 (ii) If the person to whom the option is granted is a 10%
Stockholder, then the exercise price per share shall not be less than one hundred ten percent (110%) of the Fair Market Value per share of Common Stock on the option grant date. 
  
 2. The exercise price shall become immediately due upon exercise of the option and shall, subject to the
provisions of Section I of Article Four and the documents evidencing the option, be payable in cash or check made payable to the Corporation. Should the Common Stock be registered under Section 12 of the 1934 Act at the time the option is exercised,
then the exercise price may also be paid as follows: 
  
 (i) in shares of Common Stock held for the requisite period necessary to avoid a charge to the Corporation’s earnings for financial reporting purposes and valued at Fair Market Value on the Exercise Date, or 
  
 (ii) to the extent the option is exercised for vested
shares, through a special sale and remittance procedure pursuant to which the Optionee shall concurrently provide irrevocable instructions (A) to a Corporation-designated brokerage firm to effect the immediate sale of the purchased shares and remit
to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable Federal, state and local income and employment taxes required
to be withheld by the Corporation by reason of such exercise and (B) to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale. 
  
 Except to the extent such sale and remittance procedure is
utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date. 
  

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 B. Exercise and Term of Options. Each option shall be exercisable at such
time or times, during such period and for such number of shares as shall be determined by the Plan Administrator and set forth in the documents evidencing the option grant. However, no option shall have a term in excess of ten (10) years measured
from the option grant date. 
  
 C. Effect
of Termination of Service. 
  
 1.
The following provisions shall govern the exercise of any options held by the Optionee at the time of cessation of Service or death: 
  
 (i) Should the Optionee cease to remain in Service for any reason other than death, Disability or Misconduct, then the Optionee shall
have a period of three (3) months following the date of such cessation of Service during which to exercise each outstanding option held by such Optionee. 
  
 (ii) Should Optionee’s Service terminate by reason of Disability, then the Optionee shall have a period of twelve (12) months
following the date of such cessation of Service during which to exercise each outstanding option held by such Optionee. 
  
 (iii) If the Optionee dies while holding an outstanding option, then the personal representative of his or her estate or the person or
persons to whom the option is transferred pursuant to the Optionee’s will or the laws of inheritance or the Optionee’s designated beneficiary or beneficiaries of that option shall have a twelve (12)-month period following the date of the
Optionee’s death to exercise such option. 
  
 (iv) Under no circumstances, however, shall any such option be exercisable after the specified expiration of the option term. 
  
 (v) During the applicable post-Service exercise period, the option may not be exercised in the aggregate for more than the number of
vested shares for which the option is exercisable on the date of the Optionee’s cessation of Service. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option term, the option shall terminate and
cease to be outstanding for any vested shares for which the option has not been exercised. However, the option shall, immediately upon the Optionee’s cessation of Service, terminate and cease to be outstanding with respect to any and all option
shares for which the option is not otherwise at the time exercisable or in which the Optionee is not otherwise at that time vested. 
  

 5 

 (vi) Should Optionee’s Service be terminated for Misconduct or should Optionee
otherwise engage in Misconduct while holding one or more outstanding options under the Plan, then all those options shall terminate immediately and cease to remain outstanding. 
  
 2. The Plan Administrator shall have the discretion, exercisable either at the time an option is granted or
at any time while the option remains outstanding, to: 
  
 (i) extend the period of time for which the option is to remain exercisable following Optionee’s cessation of Service or death from the limited period otherwise in effect for that option to such greater period of time as the Plan
Administrator shall deem appropriate, but in no event beyond the expiration of the option term, and/or 
  
 (ii) permit the option to be exercised, during the applicable post-Service exercise period, not only with respect to the number of vested
shares of Common Stock for which such option is exercisable at the time of the Optionee’s cessation of Service but also with respect to one or more additional installments in which the Optionee would have vested under the option had the
Optionee continued in Service. 
  
 D.
Stockholder Rights. The holder of an option shall have no stockholder rights with respect to the shares subject to the option until such person shall have exercised the option, paid the exercise price and become the recordholder of the
purchased shares. 
  
 E. Unvested
Shares. The Plan Administrator shall have the discretion to grant options which are exercisable for unvested shares of Common Stock. Should the Optionee cease Service while holding such unvested shares, the Corporation shall have the right
to repurchase, at the exercise price paid per share, any or all of those unvested shares. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the
purchased shares) shall be established by the Plan Administrator and set forth in the document evidencing such repurchase right. The Plan Administrator may not impose a vesting schedule upon any option grant or the shares of Common Stock subject to
that option which is more restrictive than twenty percent (20%) per year vesting, with the initial vesting to occur not later than one (1) year after the option grant date. However, such limitation shall not be applicable to any option grants made
to individuals who are officers of the Corporation, non-employee Board members or independent consultants. 
  
 F. First Refusal Rights. Until such time as the Common Stock is first registered under Section 12 of the 1934 Act, the
Corporation shall have the right of first refusal with respect to any proposed disposition by the Optionee (or any successor in interest) of any shares of Common Stock issued under the Plan. Such right of first refusal shall be exercisable in
accordance with the terms established by the Plan Administrator and set forth in the document evidencing such right. 
  

 6 

 G. Limited Transferability of Options. An Incentive Stock Option shall be
exercisable only by the Optionee during his or her lifetime and shall not be assignable or transferable other than by will or by the laws of inheritance following the Optionee’s death. A Non-Statutory Option may be assigned in whole or in part
during the Optionee’s lifetime to one or more members of the Optionee’s family or to a trust established exclusively for one or more such family members or to Optionee’s former spouse, to the extent such assignment is in connection
with the Optionee’s estate plan or pursuant to a domestic relations order. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the Non-Statutory Option pursuant to the assignment. The terms
applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate.
Notwithstanding the foregoing, the Optionee may also designate one or more persons as the beneficiary or beneficiaries of his or her outstanding options under the Plan, and those options shall, in accordance with such designation, automatically be
transferred to such beneficiary or beneficiaries upon the Optionee’s death while holding those options. Such beneficiary or beneficiaries shall take the transferred options subject to all the terms and conditions of the applicable agreement
evidencing each such transferred option, including (without limitation) the limited time period during which the option may be exercised following the Optionee’s death. 
  

	 	II.	INCENTIVE OPTIONS 

  
 The terms specified below shall be applicable to all Incentive Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Four shall be applicable to Incentive Options. Options which are specifically designated as Non-Statutory Options shall not be subject to the terms of this Section II. 
  
 A. Eligibility. Incentive Options may only be
granted to Employees. 
  
 B. Exercise
Price. The exercise price per share shall not be less than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the option grant date. 
  
 C. Dollar Limitation. The aggregate Fair Market Value of the shares of Common Stock
(determined as of the respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or any other option plan of the Corporation or any Parent or Subsidiary) may for the first time become exercisable as
Incentive Options during any one (1) calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee holds two (2) or more such options which become exercisable for the first time in the same calendar
year, the foregoing limitation on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted. 
  
 D. 10% Stockholder. If any Employee to whom an Incentive Option is granted is a 10%
Stockholder, then the option term shall not exceed five (5) years measured from the option grant date. 
  

	 	III.	CORPORATE TRANSACTION 

  
 A. The shares subject to each option outstanding under the Plan at the time of a Corporate Transaction shall automatically vest in full so
that each such option shall, immediately prior to the effective date of the Corporate Transaction, become exercisable for all of the shares of Common Stock at the time subject to that option and may be exercised for any or all of those shares as
fully-vested 

  

 7 

 
shares of Common Stock. However, the shares subject to an outstanding option shall not vest on such an accelerated basis if and to the extent: (i)
such option is assumed by the successor corporation (or parent thereof) in the Corporate Transaction and any repurchase rights of the Corporation with respect to the unvested option shares are concurrently assigned to such successor corporation (or
parent thereof) or (ii) such option is to be replaced with a cash incentive program of the successor corporation which preserves the spread existing on the unvested option shares at the time of the Corporate Transaction and provides for subsequent
payout in accordance with the same vesting schedule applicable to those unvested option shares or (iii) the acceleration of such option is subject to other limitations imposed by the Plan Administrator at the time of the option grant. 
  
 B. All outstanding repurchase rights under the Option Grant
Program shall also terminate automatically, and the shares of Common Stock subject to those terminated rights shall immediately vest in full, in the event of any Corporate Transaction, except to the extent: (i) those repurchase rights are assigned
to the successor corporation (or parent thereof) in connection with such Corporate Transaction or (ii) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator at the time the repurchase right is issued.

  
 C. Immediately following the consummation of
the Corporate Transaction, all outstanding options shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof). 
  
 D. Each option which is assumed in connection with a Corporate Transaction shall be appropriately adjusted,
immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to the Optionee in consummation of such Corporate Transaction, had the option been exercised immediately prior to such
Corporate Transaction. Appropriate adjustments shall also be made to (i) the number and class of securities available for issuance under the Plan following the consummation of such Corporate Transaction and (ii) the exercise price payable per share
under each outstanding option, provided the aggregate exercise price payable for such securities shall remain the same. To the extent the actual holders of the Corporation’s outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Corporate Transaction, the successor corporation may, in connection with the assumption of the outstanding options under this Plan, substitute one or more shares of its own common stock with a fair market value
equivalent to the cash consideration paid per share of Common Stock in such Corporate Transaction. 
  

 8 

 E. The Plan Administrator shall have the discretion, exercisable either at the time the
option is granted or at any time while the option remains outstanding, to structure one or more options so that those options shall automatically accelerate and vest in full (and any repurchase rights of the Corporation with respect to the unvested
shares subject to those options shall immediately terminate) upon the occurrence of a Corporate Transaction, whether or not those options are to be assumed in the Corporate Transaction. 
  
 F. The Plan Administrator shall also have full power and authority, exercisable either at the time the
option is granted or at any time while the option remains outstanding, to structure such option so that the shares subject to that option will automatically vest on an accelerated basis should the Optionee’s Service terminate by reason of an
Involuntary Termination within a designated period (not to exceed eighteen (18) months) following the effective date of any Corporate Transaction in which the option is assumed and the repurchase rights applicable to those shares do not otherwise
terminate. Any option so accelerated shall remain exercisable for the fully-vested option shares until the expiration or sooner termination of the option term. In addition, the Plan Administrator may provide that one or more of the
Corporation’s outstanding repurchase rights with respect to shares held by the Optionee at the time of such Involuntary Termination shall immediately terminate on an accelerated basis, and the shares subject to those terminated rights shall
accordingly vest at that time. 
  
 G. The portion
of any Incentive Option accelerated in connection with a Corporate Transaction shall remain exercisable as an Incentive Option only to the extent the applicable One Hundred Thousand Dollar limitation is not exceeded. To the extent such dollar
limitation is exceeded, the accelerated portion of such option shall be exercisable as a Non-Statutory Option under the Federal tax laws. 
  
 H. The grant of options under the Plan shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise
change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 
  

	 	IV.	CANCELLATION AND REGRANT OF OPTIONS 

  
 The Plan Administrator shall have the authority to effect, at any time and from time to time, with the consent of the affected option
holders, the cancellation of any or all outstanding options under the Plan and to grant in substitution therefor new options covering the same or different number of shares of Common Stock but with an exercise price per share based on the Fair
Market Value per share of Common Stock on the new option grant date. 
  

 9 

 ARTICLE THREE 
 STOCK ISSUANCE PROGRAM 
  

	 	I.	STOCK ISSUANCE TERMS 

  
 Shares of Common Stock may be issued under the Stock Issuance Program through direct and immediate issuances without any intervening
option grants. Each such stock issuance shall be evidenced by a Stock Issuance Agreement which complies with the terms specified below. 
  
 A. Purchase Price. 
  
 1. The purchase price per share shall be fixed by the Plan Administrator but shall not be less than eighty-five percent (85%) of the Fair
Market Value per share of Common Stock on the issue date. However, the purchase price per share of Common Stock issued to a 10% Stockholder shall not be less than one hundred and ten percent (110%) of such Fair Market Value. 
  
 2. Subject to the provisions of Section I of Article Four,
shares of Common Stock may be issued under the Stock Issuance Program for any of the following items of consideration which the Plan Administrator may deem appropriate in each individual instance: 
  
 (i) cash or check made payable to the Corporation, or

  
 (ii) past services rendered to the
Corporation (or any Parent or Subsidiary). 
  
 B.
Vesting Provisions. 
  
 1. Shares
of Common Stock issued under the Stock Issuance Program may, in the discretion of the Plan Administrator, be fully and immediately vested upon issuance or may vest in one or more installments over the Participant’s period of Service or upon
attainment of specified performance objectives. However, the Plan Administrator may not impose a vesting schedule upon any stock issuance effected under the Stock Issuance Program which is more restrictive than twenty percent (20%) per year vesting,
with initial vesting to occur not later than one (1) year after the issuance date. Such limitation shall not apply to any Common Stock issuances made to the officers of the Corporation, non-employee Board members or independent consultants.

  
 2. Any new, substituted or additional
securities or other property (including money paid other than as a regular cash dividend) which the Participant may have the right to receive with respect to the Participant’s unvested shares of Common Stock by reason of any stock dividend,
stock split, recapitalization, combination of shares, exchange of shares or 

  

 10 

 
other change affecting the outstanding Common Stock as a class without the Corporation’s receipt of consideration shall be issued subject to (i) the
same vesting requirements applicable to the Participant’s unvested shares of Common Stock and (ii) such escrow arrangements as the Plan Administrator shall deem appropriate. 
  
 3. The Participant shall have full stockholder rights with respect to any shares of Common Stock issued to
the Participant under the Stock Issuance Program, whether or not the Participant’s interest in those shares is vested. Accordingly, the Participant shall have the right to vote such shares and to receive any regular cash dividends paid on such
shares. 
  
 4. Should the Participant cease to
remain in Service while holding one or more unvested shares of Common Stock issued under the Stock Issuance Program or should the performance objectives not be attained with respect to one or more such unvested shares of Common Stock, then those
shares shall be immediately surrendered to the Corporation for cancellation, and the Participant shall have no further stockholder rights with respect to those shares. To the extent the surrendered shares were previously issued to the Participant
for consideration paid in cash or cash equivalent (including the Participant’s purchase-money indebtedness), the Corporation shall repay to the Participant the cash consideration paid for the surrendered shares and shall cancel the unpaid
principal balance of any outstanding purchase-money note of the Participant attributable to such surrendered shares. 
  
 5. The Plan Administrator may in its discretion waive the surrender and cancellation of one or more unvested shares of Common Stock (or
other assets attributable thereto) which would otherwise occur upon the non-completion of the vesting schedule applicable to those shares. Such waiver shall result in the immediate vesting of the Participant’s interest in the shares of Common
Stock as to which the waiver applies. Such waiver may be effected at any time, whether before or after the Participant’s cessation of Service or the attainment or non-attainment of the applicable performance objectives. 
  
 C. First Refusal Rights. Until such time as
the Common Stock is first registered under Section 12 of the 1934 Act, the Corporation shall have the right of first refusal with respect to any proposed disposition by the Participant (or any successor in interest) of any shares of Common Stock
issued under the Stock Issuance Program. Such right of first refusal shall be exercisable in accordance with the terms established by the Plan Administrator and set forth in the document evidencing such right. 
  

	 	II.	CORPORATE TRANSACTION 

  
 A. Upon the occurrence of a Corporate Transaction, all outstanding repurchase rights under the Stock Issuance Program shall terminate
automatically, and the shares of Common Stock subject to those terminated rights shall immediately vest in full, except to the extent: (i) those repurchase rights are assigned to the successor corporation (or parent thereof) in connection with such
Corporate Transaction or (ii) such accelerated vesting is precluded by other limitations imposed by the Plan Administrator at the time the repurchase right is issued. 
  
 B. The Plan Administrator shall have the discretionary authority, exercisable either at the time the
unvested shares are issued or any time while the Corporation’s repurchase rights with respect to those shares remain outstanding, to provide that those rights shall automatically terminate on an accelerated basis, and the shares of Common Stock
subject to those terminated rights shall immediately vest, in the event the Participant’s Service should subsequently terminate by reason of an Involuntary 

  

 11 

 
Termination within a designated period (not to exceed eighteen (18) months) following the effective date of any Corporate Transaction in which those
repurchase rights are assigned to the successor corporation (or parent thereof). 
  

	 	III.	SHARE ESCROW/LEGENDS 

  
 Unvested shares may, in the Plan Administrator’s discretion, be held in escrow by the Corporation until the Participant’s
interest in such shares vests or may be issued directly to the Participant with restrictive legends on the certificates evidencing those unvested shares. 
  

 12 

 ARTICLE FOUR 
 MISCELLANEOUS 
  

	 	I.	FINANCING 

  
 The Plan Administrator may permit any Optionee or Participant to pay the option exercise price under the Option Grant Program or the
purchase price for shares issued under the Stock Issuance Program by delivering a full-recourse, interest bearing promissory note payable in one or more installments and secured by the purchased shares. In no event, however, may the maximum credit
available to the Optionee or Participant exceed the sum of (i) the aggregate option exercise price or purchase price payable for the purchased shares (less the par value of those shares) plus (ii) any Federal, state and local income and employment
tax liability incurred by the Optionee or the Participant in connection with the option exercise or share purchase. 
  

	 	II.	EFFECTIVE DATE AND TERM OF PLAN 

  
 A. The Plan shall become effective when adopted by the Board, but no option granted under the Plan may be exercised, and no shares shall
be issued under the Plan, until the Plan is approved by the Corporation’s stockholders. If such stockholder approval is not obtained within twelve (12) months after the date of the Board’s adoption of the Plan, then all options previously
granted under the Plan shall terminate and cease to be outstanding, and no further options shall be granted and no shares shall be issued under the Plan. Subject to such limitation, the Plan Administrator may grant options and issue shares under the
Plan at any time after the effective date of the Plan and before the date fixed herein for termination of the Plan. 
  
 B. The Plan shall terminate upon the earliest of (i) the expiration of the ten (10)-year period measured from the date the Plan is
adopted by the Board, (ii) the date on which all shares available for issuance under the Plan shall have been issued as vested shares or (iii) the termination of all outstanding options in connection with a Corporate Transaction. All options and
unvested stock issuances outstanding at the time of a clause (i) termination event shall continue to have full force and effect in accordance with the provisions of the documents evidencing those options or issuances. 
  

	 	III.	AMENDMENT OF THE PLAN 

  
 A. The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects. However, no such
amendment or modification shall adversely affect the rights and obligations with respect to options or unvested stock issuances at the time outstanding under the Plan unless the Optionee or the Participant consents to such amendment or modification.
In addition, certain amendments may require stockholder approval pursuant to applicable laws and regulations. 
  

 13 

 B. Options may be granted under the Option Grant Program and shares may be issued under
the Stock Issuance Program which are in each instance in excess of the number of shares of Common Stock then available for issuance under the Plan, provided any excess shares actually issued under those programs shall be held in escrow until there
is obtained stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock available for issuance under the Plan. If such stockholder approval is not obtained within twelve (12) months after the date the first such
excess grants or issuances are made, then (i) any unexercised options granted on the basis of such excess shares shall terminate and cease to be outstanding and (ii) the Corporation shall promptly refund to the Optionees and the Participants the
exercise or purchase price paid for any excess shares issued under the Plan and held in escrow, together with interest (at the applicable Short Term Federal Rate) for the period the shares were held in escrow, and such shares shall thereupon be
automatically cancelled and cease to be outstanding. 
  

	 	IV.	USE OF PROCEEDS 

  
 Any cash proceeds received by the Corporation from the sale of shares of Common Stock under the Plan shall be used for general corporate
purposes. 
  

	 	V.	WITHHOLDING 

  
 The Corporation’s obligation to deliver shares of Common Stock upon the exercise of any options granted under the Plan or upon the
issuance or vesting of any shares issued under the Plan shall be subject to the satisfaction of all applicable Federal, state and local income and employment tax withholding requirements. 
  

	 	VI.	REGULATORY APPROVALS 

  
 The implementation of the Plan, the granting of any options under the Plan and the issuance of any shares of Common Stock (i) upon the
exercise of any option or (ii) under the Stock Issuance Program shall be subject to the Corporation’s procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the options granted under it
and the shares of Common Stock issued pursuant to it. 
  

	 	VII.	NO EMPLOYMENT OR SERVICE RIGHTS 

  
 Nothing in the Plan shall confer upon the Optionee or the Participant any right to continue in Service for any period of specific duration
or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of the Optionee or the Participant, which rights are hereby expressly reserved by each, to terminate
such person’s Service at any time for any reason, with or without cause. 
  

 14 

	 	VIII. 	FINANCIAL REPORTS 

  
 The Corporation shall deliver a balance sheet and an income statement at least annually to each individual holding an outstanding option
under the Plan, unless such individual is a key Employee whose duties in connection with the Corporation (or any Parent or Subsidiary) assure such individual access to equivalent information. 
  

 15 

 APPENDIX 
  
 The following definitions shall be in effect under the Plan: 
  
 A. Board shall mean the Corporation’s Board of Directors. 
  
 B. Code shall mean the Internal Revenue Code of 1986, as
amended. 
  
 C. Committee shall mean a committee of
one (1) or more Board members appointed by the Board to exercise one or more administrative functions under the Plan. 
  
 D. Common Stock shall mean the Corporation’s common stock. 
  
 E. Corporate Transaction shall mean either of the following stockholder-approved transactions to which the
Corporation is a party: 
  
 (i) a merger,
consolidation or other reorganization approved by the Corporation’s stockholders, unless securities representing more than fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are
immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Corporation’s outstanding voting securities immediately prior to such transaction, or

  
 (ii) the sale, transfer or other disposition
of all or substantially all of the Corporation’s assets in complete liquidation or dissolution of the Corporation. 
  
 F. Corporation shall mean Salmedix, Inc., a Delaware corporation, and any successor corporation to all or substantially all of the assets or
voting stock of Salmedix, Inc. which shall by appropriate action adopt the Plan. 
  
 G. Disability shall mean the inability of the Optionee or the Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment and shall be
determined by the Plan Administrator on the basis of such medical evidence as the Plan Administrator deems warranted under the circumstances. 
  
 H. Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and
direction of the employer entity as to both the work to be performed and the manner and method of performance. 
  
 I. Exercise Date shall mean the date on which the Corporation shall have received written notice of the option exercise. 
  
 J. Fair Market Value per share of Common Stock on any relevant
date shall be determined in accordance with the following provisions: 
  
 (i) If the Common Stock is at the time traded on the Nasdaq National Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as such price is reported
by the National 

  

 A-1 

 
Association of Securities Dealers on the Nasdaq National Market and published in The Wall Street Journal. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists. 
  

(ii) If the Common Stock is at the time listed on any Stock Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange and
published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.

  
 (iii) If the Common Stock is at the time
neither listed on any Stock Exchange nor traded on the Nasdaq National Market, then the Fair Market Value shall be determined by the Plan Administrator after taking into account such factors as the Plan Administrator shall deem appropriate.

  
 K. Incentive Option shall mean an option which
satisfies the requirements of Code Section 422. 
  
 L.
Involuntary Termination shall mean the termination of the Service of any individual which occurs by reason of: 
  
 (i) such individual’s involuntary dismissal or discharge by the Corporation for reasons other than Misconduct, or 
  
 (ii) such individual’s voluntary resignation following
(A) a change in his or her position with the Corporation which materially reduces his or her duties and responsibilities or the level of management to which he or she reports, (B) a reduction in his or her level of compensation (including base
salary, fringe benefits and target bonus under any corporate-performance based bonus or incentive programs) by more than fifteen percent (15%) or (C) a relocation of such individual’s place of employment by more than fifty (50) miles, provided
and only if such change, reduction or relocation is effected without the individual’s consent. 
  
 M. Misconduct shall mean the commission of any act of fraud, embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by such person adversely affecting the business or affairs of the Corporation (or any
Parent or Subsidiary) in a material manner. The foregoing definition shall not in any way preclude or restrict the right of the Corporation (or any Parent or Subsidiary) to discharge or dismiss any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary) for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan, to constitute grounds for termination for Misconduct. 
  
 N. 1934 Act shall mean the Securities Exchange Act of 1934, as
amended. 
  

 A-2 

 O. Non-Statutory Option shall mean an option not intended to satisfy the requirements of
Code Section 422. 
  
 P. Option Grant Program shall
mean the option grant program in effect under the Plan. 
  
 Q.
Optionee shall mean any person to whom an option is granted under the Plan. 
  
 R. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the
Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
  
 S. Participant shall mean any person who is issued shares of
Common Stock under the Stock Issuance Program. 
  
 T.
Plan shall mean the Corporation’s 2001 Stock Option/Stock Issuance Plan, as set forth in this document. 
  
 U. Plan Administrator shall mean either the Board or the Committee acting in its capacity as administrator of the Plan. 
  
 V. Service shall mean the provision of services to the
Corporation (or any Parent or Subsidiary) by a person in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor, except to the extent otherwise specifically provided in the documents
evidencing the option grant. 
  
 W. Stock Exchange
shall mean either the American Stock Exchange or the New York Stock Exchange. 
  
 X. Stock Issuance Agreement shall mean the agreement entered into by the Corporation and the Participant at the time of issuance of shares of Common Stock under the Stock Issuance Program. 
  
 Y. Stock Issuance Program shall mean the stock issuance program
in effect under the Plan. 
  
 Z. Subsidiary shall
mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock
possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
  
 AA. 10% Stockholder shall mean the owner of stock (as determined under Code Section 424(d)) possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary). 
  

 A-3

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