Document:

Document

Exhibit 10.3

LIGAND PHARMACEUTICALS INCORPORATED

2022 EMPLOYMENT INDUCEMENT PLAN

NOTICE OF GRANT OF STOCK OPTION 

    Ligand Pharmaceuticals Incorporated, a Delaware corporation (the “Corporation”), pursuant to its 2022 Employment Inducement Plan (the “Plan”), hereby grants to the holder listed below (“Optionee”) a stock option to purchase the number of shares (“Shares”) of Common Stock of the Corporation set forth below (the “Option”).  This Option is subject to all of the terms and conditions as set forth in this Notice of Grant of Stock Option Grant (the “Grant Notice”) and the Stock Option Agreement (the “Stock Option Agreement”) attached hereto as Exhibit A, and the Plan, each of which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Stock Option Agreement.

Optionee:    ___________________

Grant Number:    ___________________

Grant Date:    ___________________

Vesting Commencement Date:    ___________________

Exercise Price:    $___________________

Number of Option Shares:    ___________________

Expiration Date:    ___________________

Type of Option:    Non-Statutory Option

Exercise Schedule:    The Option will vest as follows, subject to Optionee’s continued Service through each such vesting date:

  
									
	Shares
	Vest Type	Full Vest
	

		

    Optionee understands and agrees that the Option is granted subject to and in accordance with the terms of the Plan.  By electronically accepting this Option, Optionee further agrees to be bound by the terms of the Plan and the terms of the Option as set forth in the Stock Option Agreement attached hereto as Exhibit A.  Optionee hereby acknowledges that he or she has been provided with a copy or electronic access to the Plan and the prospectus for the Plan.  A printed copy of the Plan and/or prospectus is available upon request made to the Secretary of the Corporation at the Corporation’s principal offices.

    Employment at Will.  Nothing in this Grant Notice, in the attached Stock Option Agreement or in the Plan shall confer upon Optionee any right to continue in Service for any period of specific duration or 
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Exhibit 10.3

interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining Optionee) or of Optionee, which rights are hereby expressly reserved by each, to terminate Optionee’s Service at any time for any reason, with or without cause.

    Definitions.  All capitalized terms in this Grant Notice shall have the meaning assigned to them in this Grant Notice or in the attached Stock Option Agreement.  

By accepting Optionee’s signature below, Optionee agrees to be bound by the terms and conditions of this Grant Notice, the Stock Option Agreement and the Plan.  Optionee has reviewed this Grant Notice, the Stock Option Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of counsel prior to executing the Grant Notice and fully understands all provisions of this Grant Notice, the Stock Option Agreement and the Plan.  Optionee hereby agrees to accept as binding, conclusive and final all decision and interpretations of the Plan Administrator upon any questions arising under this Grant Notice, the Stock Option Agreement and the Plan.  

												
	LIGAND PHARMACEUTICALS INCORPORATED	OPTIONEE
	By:		By:	
	Print Name:		Print Name:	
	Title:			
				

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EXHIBIT A
LIGAND PHARMACEUTICALS INCORPORATED

STOCK OPTION AGREEMENT

RECITALS

A.The Board has adopted the Plan as an incentive for Eligible Individuals (as defined in the Plan) to commence and remain in service to the Corporation (or a Parent or Subsidiary).

B.In consideration of Optionee’s agreement to commence employment with and remain in the employ of the Corporation (or a Parent or Subsidiary), and for other good and valuable considseration, effective as of the Grant Date set forth in the Grant Notice, the Corporation has granted to Optionee an Option to purchase the Shares set forth in the Grant Notice.

C.Optionee is to render valuable services to the Corporation (or a Parent or Subsidiary), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Corporation’s grant of an Option to Optionee.

D.All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix.

NOW, THEREFORE, it is hereby agreed as follows:

1. GRANT OF OPTION.  The Corporation hereby grants to Optionee, as of the Grant Date, an Option to purchase up to the number of Option Shares specified in the Grant Notice.  The Option Shares shall be purchasable from time to time during the Option term specified in Paragraph 2 at the Exercise Price. 

(a)The Option is intended to constitute an “employment inducement grant” under NASDAQ Listing Rule 5635(c)(4), and consequently is intended to be exempt from the NASDAQ rules regarding stockholder approval of stock option and stock purchase plans.  This Agreement and the terms and conditions of the Option shall be interpreted in accordance and consistent with such exemption.

2.OPTION TERM.  This Option shall have a maximum term of ten (10) years measured from the Grant Date and shall accordingly expire at the close of business on the Expiration Date, unless sooner terminated in accordance with Paragraph 5 or 6.

3.LIMITED TRANSFERABILITY.

(b)This Option shall be neither transferable nor assignable by Optionee other than by will or the laws of inheritance following Optionee’s death and may be exercised, during Optionee’s lifetime, only by Optionee.  However, Optionee may designate one or more persons as the beneficiary or beneficiaries of this Option, and this Option shall, in accordance with such designation, automatically be transferred to such beneficiary or beneficiaries upon the Optionee’s death while holding this Option.  Such beneficiary or beneficiaries shall take the transferred Option subject to all the terms and conditions of this Agreement, including (without limitation) the limited time period during which this Option may, pursuant to Paragraph 5, be exercised following Optionee’s death.

(c)This Option may be assigned in whole or in part during Optionee’s lifetime to one or more members of Optionee’s family or to a trust established for the exclusive benefit of 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 shall be exercisable only by the person or persons who acquire a proprietary interest in the Option pursuant to such assignment.  The terms applicable to the assigned portion shall be the same as those in effect for this Option immediately prior to such assignment.

4.DATES OF EXERCISE.  This Option shall become exercisable for the Option Shares in one or more installments as specified in the Grant Notice.  As the Option becomes exercisable for such installments, those installments shall accumulate, and the Option shall remain exercisable for the accumulated installments until the Expiration Date or sooner termination of the Option term under Paragraph 5 or 6.

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5.CESSATION OF SERVICE.  The Option term specified in Paragraph 2 shall terminate (and this Option shall cease to be outstanding) prior to the Expiration Date should any of the following provisions become applicable:

(a)Should Optionee cease to remain in Service for any reason (other than death or Permanent Disability) while this Option is outstanding, then Optionee (or any person or persons to whom this Option is transferred pursuant to a permitted transfer under Paragraph 3) shall have a period of three (3) months (commencing with the date of such cessation of Service) during which to exercise this Option, but in no event shall this Option be exercisable at any time after the Expiration Date.

(b)Should Optionee die while this Option is outstanding, then the personal representative of Optionee’s estate or the person or persons to whom the Option is transferred pursuant to Optionee’s will or the laws of inheritance following Optionee’s death or to whom the Option is transferred during Optionee’s lifetime pursuant to a permitted transfer under Paragraph 3 shall have the right to exercise this Option.  However, if Optionee dies while holding this Option and has an effective beneficiary designation in effect for this Option at the time of his or her death, then the designated beneficiary or beneficiaries shall have the exclusive right to exercise this Option following Optionee’s death.  Any such right to exercise this Option shall lapse, and this Option shall cease to be outstanding, upon the earlier of (i) the expiration of the twelve (12)-month period measured from the date of Optionee’s death or (ii) the Expiration Date.

(c)Should Optionee cease Service by reason of Permanent Disability while this Option is outstanding, then Optionee (or any person or persons to whom this Option is transferred pursuant to a permitted transfer under Paragraph 3) shall have a period of twelve (12) months (commencing with the date of such cessation of Service) during which to exercise this Option.  In no event shall this Option be exercisable at any time after the Expiration Date.

(d)During the limited period of post-Service exercisability, this Option may not be exercised in the aggregate for more than the number of Option Shares for which the Option is exercisable at the time of Optionee’s cessation of Service.  Upon the expiration of such limited exercise period or (if earlier) upon the Expiration Date, this Option shall terminate and cease to be outstanding for any exercisable Option Shares for which the Option has not been exercised.  However, this Option shall, immediately upon Optionee’s cessation of Service for any reason, terminate and cease to be outstanding with respect to any Option Shares for which this Option is not otherwise at that time exercisable.

6.SPECIAL ACCELERATION OF OPTION.

(d)This Option, to the extent outstanding at the time of a Change in Control but not otherwise fully exercisable, shall automatically accelerate so that this Option shall, immediately prior to the effective date of such Change in Control, become exercisable for all of the Option Shares at the time subject to this Option and may be exercised for any or all of those Option Shares as fully vested shares of Common Stock.  However, this Option shall not become exercisable on such an accelerated basis, if and to the extent: (i) this Option is to be assumed by the successor corporation (or parent thereof) or is otherwise to be continued in full force and effect pursuant to the terms of the Change in Control transaction or (ii) this Option is to be replaced with a cash incentive program of the successor corporation which preserves the spread existing at the time of the Change in Control on any Option Shares for which this Option is not otherwise at that time exercisable (the excess of the Fair Market Value of those Option Shares over the aggregate Exercise Price payable for such shares) and provides for subsequent payout of that spread in accordance with the same Option exercise/vesting schedule for those Option Shares set forth in the Grant Notice.

(e)Immediately following the Change in Control, this Option shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) or otherwise continued in effect pursuant to the terms of the Change in Control transaction.

(f)If this Option is assumed in connection with a Change in Control or otherwise continued in effect, then this Option shall be appropriately adjusted, immediately after such Change in Control, to apply to the number and class of securities which would have been issuable to Optionee in consummation of such Change in Control had the Option been exercised immediately prior to such Change in Control, and appropriate adjustments shall also be made to the Exercise Price, provided the aggregate Exercise Price 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 Change in Control, the successor corporation may, in connection with the assumption of this Option, 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 Change in Control.

(g)This Agreement shall not in any 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.
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7.ADJUSTMENT IN OPTION SHARES.  The Option shall be subject to adjustment as provided in Article One, Section V of the Plan.

1.STOCKHOLDER RIGHTS.  The holder of this Option shall not have any stockholder rights with respect to the Option Shares until such person shall have exercised the Option, paid the Exercise Price and become a holder of record of the purchased shares.

8.MANNER OF EXERCISING OPTION.

(h)In order to exercise this Option with respect to all or any part of the Option Shares for which this Option is at the time exercisable, Optionee (or any other person or persons exercising the Option) must take the following actions:

(i)Execute and deliver to the Corporation a Notice of Exercise for the Option Shares for which the Option is exercised.

(ii)Pay the aggregate Exercise Price for the purchased shares in one or more of the following forms:

(A)cash or check made payable to the Corporation (includes cash paid from Optionee’s brokerage pursuant to a presale of shares in a so-called “cashless” exercise);

(B)subject to the consent of the Plan Administrator, shares of Common Stock held by Optionee (or any other person or persons exercising the Option) 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;

(C)shares of Common Stock issuable upon the exercise of the Option having a Fair Market Value on the Exercise Date equal to the aggregate exercise price of the Option Shares with respect to which the Option or portion thereof is being exercised; or

(D)through a special sale and remittance procedure pursuant to which Optionee (or any other person or persons exercising the Option) shall concurrently provide irrevocable instructions (i) to a 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 income and employment taxes required to be withheld by the Corporation by reason of such exercise and (ii) 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 the sale and remittance procedure is utilized in connection with the Option exercise, payment of the Exercise Price must accompany the Notice of Exercise delivered to the Corporation in connection with the Option exercise.

(iii)Furnish to the Corporation appropriate documentation that the person or persons exercising the Option (if other than Optionee) have the right to exercise this Option.

(iv)Make appropriate arrangements with the Corporation (or Parent or Subsidiary employing or retaining Optionee) for the satisfaction of all applicable income and employment tax withholding requirements applicable to the Option exercise, which amounts may be paid in on or more of the forms of consideration permitted under clause (ii) above, subject to Article Six, Section I of the Plan and any required consent of the Plan Administrator under clause (ii) above.  To the extent any employment tax withholding will be satisfied by Optionee pursuant to clause (B) or (C) under clause (ii) above, the shares to be surrendered to the Corporation or withheld from the shares of Common Stock otherwise issuable upon the exercise shall be limited to those shares with a Fair Market Value not exceeding the amount necessary to satisfy the tax withholding obligation of the Corporation with respect to the exercise of the Option based on the minimum applicable statutory withholding rates.

(i)As soon as practical after the Exercise Date, the Corporation shall issue to or on behalf of Optionee (or any other person or persons exercising this Option) a certificate for the purchased Option Shares, with the appropriate legends affixed thereto.

(j)In no event may this Option be exercised for any fractional shares.
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9.COMPLIANCE WITH LAWS AND REGULATIONS.

(a)The exercise of this Option and the issuance of the Option Shares upon such exercise shall be subject to compliance by the Corporation and Optionee with all applicable requirements of law relating thereto and with all applicable regulations of any stock exchange (including The Nasdaq Stock Market, if applicable) on which the Common Stock may be listed for trading at the time of such exercise and issuance.

(b)The inability of the Corporation to obtain approval from any regulatory body having authority deemed by the Corporation to be necessary to the lawful issuance and sale of any Common Stock pursuant to this Option shall relieve the Corporation of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained.  The Corporation, however, shall use its best efforts to obtain all such approvals.

10.SUCCESSORS AND ASSIGNS.  Except to the extent otherwise provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and Optionee, Optionee’s assigns, the legal representatives, heirs and legatees of Optionee’s estate and any beneficiaries of this Option designated by Optionee.
11.NOTICES.  Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices.  Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the most recent address for Optionee on the Corporation’s payroll records.  All notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.

1.CONSTRUCTION.  This Agreement and the Option evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All decisions of the Plan Administrator with respect to any question or issue arising under the Plan, the Option, the Grant Notice or this Agreement shall be conclusive and binding on all persons having an interest in this Option.

2.GOVERNING LAW.  The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of California without resort to that State’s conflict-of-laws rules.

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APPENDIX

The following definitions shall be in effect under the Agreement: 
A.AGREEMENT shall mean this Stock Option Agreement.
B.BOARD shall mean the Corporation’s Board of Directors.
C.CHANGE IN CONTROL shall mean a change in ownership or control of the Corporation effected through any of the following transactions:
(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, or
(iii)the acquisition, directly or indirectly by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation), of beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporation’s outstanding securities pursuant to a tender or exchange offer made directly to the Corporation’s stockholders.
E.COMMON STOCK shall mean shares of the Corporation’s common stock. 
F.CODE shall mean the Internal Revenue Code of 1986, as amended.
G.CORPORATION shall mean Ligand Pharmaceuticals Incorporated, a Delaware corporation, and any successor corporation to all or substantially all of the assets or voting stock of Ligand Pharmaceuticals Incorporated which shall by appropriate action adopt the Plan.
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 Option shall have been exercised in accordance with Paragraph 9 of the Agreement.
J.EXERCISE PRICE shall mean the exercise price per Option Share as specified in the Grant Notice.
K.EXPIRATION DATE shall mean the date on which the Option expires as specified in the Grant Notice.
L.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 Stock Market, then the Fair Market Value shall be deemed equal to the closing selling price per share of Common Stock on the date in question, as the price is reported by the National Association of Securities Dealers on The Nasdaq Stock 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, or
(ii)If the Common Stock is at the time listed on any stock exchange, then the Fair Market Value shall be deemed equal to 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.
M.GRANT DATE shall mean the date of grant of the Option as specified in the Grant Notice.

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N.GRANT NOTICE shall mean the Notice of Grant of Stock Option accompanying the Agreement, pursuant to which Optionee has been informed of the basic terms of the Option evidenced hereby.
O.NON-STATUTORY OPTION shall mean an option not intended to satisfy the requirements of Code Section 422.
P.NOTICE OF EXERCISE shall mean the notice of exercise in the form approved by the Plan Administrator from time to time.
Q. OPTION SHARES shall mean the number of shares of Common Stock subject to the Option as specified in the Grant Notice.
R. OPTIONEE shall mean the person to whom the Option is granted as specified in the Grant Notice.
S.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.
T.PERMANENT DISABILITY shall mean the inability of Optionee to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which is expected to result in death or has lasted or can be expected to last for a continuous period of twelve (12) months or more.
U.PLAN shall mean the Corporation’s 2022 Employment Inducement Plan, as may amended from time to time.
V.PLAN ADMINISTRATOR shall have the meaning set forth in the Plan.
W.SERVICE shall mean the Optionee’s performance of services for the Corporation (or any Parent or Subsidiary) 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 required by law, no Service credit shall be given for vesting purposes hereunder for any period the Optionee is on a leave of absence.
X.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.

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Exhibit 10.4

LIGAND PHARMACEUTICALS INCORPORATED

2022 EMPLOYMENT INDUCEMENT PLAN
RESTRICTED STOCK UNIT GRANT NOTICE AND
RESTRICTED STOCK UNIT AGREEMENT

Ligand Pharmaceuticals Incorporated, a Delaware corporation (the “Corporation”), pursuant to its 2022 Employment Inducement Plan (the “Plan”), hereby grants to the holder listed below (“Participant”), an award of restricted stock units (“Restricted Stock Units” or “RSUs”) with respect to the number of shares of the Corporation’s common stock (the “Shares”).  This award for Restricted Stock Units (this “RSU Award”) is subject to all of the terms and conditions as set forth herein and in the Restricted Stock Unit Award Agreement attached hereto as Exhibit A (the “Restricted Stock Unit Agreement”) and the Plan, each of which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Restricted Stock Unit Agreement.

						
	Participant:	
	Grant Date:	
	Grant Number:	
	Vesting Commencement Date:	
	Total Number of RSUs Subject to Award:	
	Distribution Schedule:	The RSUs shall be distributable as they vest pursuant to the Vesting Schedule.

									
	Vesting Schedule:	Shares	Vest Date

By his or her acceptance of this Restricted Stock Unit Grant, Participant agrees to be bound by the terms and conditions of the Plan, the Restricted Stock Unit Agreement and this Grant Notice. Participant has reviewed the Restricted Stock Unit Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Restricted Stock Unit Agreement and the Plan.  Participant has been provided with a copy or electronic access to a copy of the prospectus for the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Plan Administrator upon any questions arising under the Plan, this Grant Notice or the Restricted Stock Unit Agreement. 
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        ( Restricted Stock Unit Grant Notice 03-2018.doc)
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Exhibit 10.4

EXHIBIT A
TO RESTRICTED STOCK UNIT AWARD GRANT NOTICE

LIGAND PHARMACEUTICALS, INCORPORATED
RESTRICTED STOCK UNIT AWARD AGREEMENT
Pursuant to the Restricted Stock Unit Award Grant Notice (the “Grant Notice”) to which this Restricted Stock Unit Award Agreement (this “Agreement”) is attached, Ligand Pharmaceuticals Incorporated, a Delaware corporation (the “Corporation”), has granted to Participant the right to receive the number of RSUs under the Corporation’s 2022 Employment Inducement Plan (the “Plan”) indicated in the Grant Notice, with respect to the number of shares of the Corporation’s common stock (the “Stock”).  The RSU Award and this Agreement are subject to the Plan, the terms and conditions of which are incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.
ARTICLE I.
AWARD OF RESTRICTED STOCK UNITS
1.1Award of Restricted Stock Units; Employment Inducement Award.  
(a)Award.  In consideration of Participant’s agreement to commence employment with and remain in the employ of the Corporation (or a Parent or Subsidiary), and for other good and valuable consideration, the Corporation hereby grants to Participant the right to receive the number of RSUs set forth in the Grant Notice, subject to all of the terms and conditions set forth in this Agreement, the Grant Notice and the Plan (the “RSU Award”).  Each RSU represents the right to receive one Share.  Prior to actual issuance of any Shares, the RSUs and the RSU Award represent an unsecured obligation of the Corporation, payable only from the general assets of the Corporation. 
(i)The RSUs are intended to constitute an “employment inducement” award NASDAQ Listing Rule 5635(c)(4), and consequently are intended to be exempt from the NASDAQ rules regarding shareholder approval of stock option and stock purchase plans or other equity compensation arrangements. This Agreement and the terms and conditions of the RSUs shall be interpreted in accordance and consistent with such exemption.
(b)Vesting.  The RSUs subject to the RSU Award shall vest in accordance with the Vesting Schedule set forth in the Grant Notice.  Unless and until the RSUs have vested in accordance with the vesting schedule set forth in the Grant Notice, Participant will have no right to any distribution with respect to such RSUs.  In the event of Participant’s cessation of Service for any reason, including as a result of Participant’s death or Permanent Disability, prior to the vesting of all of the RSUs, any unvested RSUs will terminate automatically without any further action by the Corporation and be forfeited without further notice and at no cost to the Corporation.
(c)Distribution of Stock. 
(ii)Stock shall be distributed to Participant (or in the event of Participant’s death, to his or her estate) with respect to such Participant’s vested RSUs granted to Participant pursuant to this Restricted Stock Unit Agreement, subject to the terms and provisions of the Plan and this Restricted Stock Unit Agreement, within ten (10) days following each vesting date as the RSU vests pursuant to the Vesting Schedule set forth in the Grant Notice.  
(iii)All distributions shall be made by the Corporation in the form of whole shares of Stock.  In no event will fractional shares be issued upon settlement of the RSU Award.  No fractional Shares shall be issued and any such fractional Shares shall be cancelled automatically and without any further action by Participant or the Corporation.
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        ( Restricted Stock Unit Grant Notice 03-2018.doc)
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Exhibit 10.4

(iv)Notwithstanding the foregoing, shares of Stock shall be issuable pursuant to an RSU at such times and upon such events as are specified in this Agreement only to the extent issuance under such terms will not cause the RSUs or the shares of Stock issuable pursuant to the RSUs to be includible in the gross income of Participant under Section 409A of the Code prior to such times or the occurrence of such events, as permitted by the Code and the regulations and other guidance thereunder.
(a)Generally. Stock issued under the RSU Award shall be issued to Participant or Participant’s beneficiaries, as the case may be, at the sole discretion of the Plan Administrator, in either (i) uncertificated form, with the Shares recorded in the name of Participant in the books and records of the Corporation’s transfer agent with appropriate notations regarding the restrictions on transfer imposed pursuant to this Agreement; or (ii) certificate form.
1.2Taxation Representations; Tax Withholding.  Notwithstanding any other provision of this Agreement (including, without limitation, Section 1.1(b) hereof): 
(d)Taxation Representations. Participant has reviewed with his or her own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement.  Participant is relying solely on such advisors and not on any statements or representations of the Corporation or any of its agents.  Participant understands that Participant (and not the Corporation) shall be responsible for his or her own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.  
(e)Tax Withholding Obligation.  The Corporation shall not be obligated to deliver any certificate representing Shares issuable with respect to the RSUs to Participant or his or her legal representative unless and until Participant or his or her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxable income of Participant resulting from the vesting of the RSUs, the distribution of the Shares issuable with respect thereto, or any other taxable event related to the RSUs (the “Tax Withholding Obligation”), provided that no payment shall be delayed under this Section 1.2(b) if such delay will result in a violation of Section 409A of the Code.  To the maximum extent permitted by applicable law, the Corporation and its Subsidiaries have the authority to deduct or withhold, or require Participant to remit to the Corporation or the applicable Subsidiary, an amount sufficient to satisfy the Tax Withholding Obligation.  
(f)Withholding of Shares.  With respect to any Tax Withholding Obligation arising in connection with the RSUs, the Corporation shall automatically withhold a net number of vested Shares otherwise issuable pursuant to the RSUs having a then current Fair Market Value not exceeding the amount necessary to satisfy the Tax Withholding Obligation of the Corporation and its Subsidiaries based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to such supplemental taxable income (or such higher rate as may be determined by the Plan Administrator, which higher rate shall in no event exceed the maximum individual statutory tax rate in the applicable jurisdiction at the time of such withholding (or such other rate as may be required to avoid the liability classification of the applicable award under generally accepted accounting principles in the United States of America)), provided that such Shares shall be rounded up to the nearest whole Share sufficient to cover the Tax Withholding Obligation to the extent rounding up to the nearest whole share does not result in the liability classification of the applicable Award under generally accepted accounting principles in the United States of America.  
(d)    Broker Sale.  In the event any Tax Withholding Obligation arising in connection with the RSUs will be satisfied under Section 1.2(c), then the Corporation may, upon approval of the Plan Administrator, elect to instruct any brokerage firm determined acceptable to the Corporation for such purpose to sell on Participant's behalf a whole number of shares from those Shares then issuable to Participant pursuant to the RSUs as the Corporation determines to be appropriate to generate cash proceeds sufficient to satisfy the Tax Withholding Obligation and to remit the proceeds of such sale to the Corporation or the Subsidiary with respect to which the Tax Withholding Obligation arises.  Participant’s acceptance of this Award constitutes Participant's instruction and authorization to the Corporation and such brokerage firm to complete the transactions described in this Section 1.2(d), including the transactions described in the previous sentence, as applicable.  
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        ( Restricted Stock Unit Grant Notice 03-2018.doc)
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Exhibit 10.4

(e)    Participant Liable for Taxes.  Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Corporation or any Subsidiary takes with respect to any Tax Withholding Obligations that arise in connection with the RSUs.  Neither the Corporation nor any Subsidiary makes any representation or undertaking regarding the treatment of any Tax Withholding Obligation in connection with the awarding, vesting or payment of the RSUs or the subsequent sale of Shares.  The Corporation and the Subsidiaries do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.
1.3Conditions to Issuance of Certificates The Corporation shall not be required to issue or deliver any certificate or certificates for any Shares prior to the fulfillment of all of the following conditions:  (a) the admission of the Shares to listing on all stock exchanges on which such Shares are then listed; (b) the completion of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the U.S. Securities and Exchange Commission or other governmental regulatory body, which the Plan Administrator shall, in its sole and absolute discretion, deem necessary and advisable; (c) the obtaining of any approval or other clearance from any state or federal governmental agency that the Plan Administrator shall, in its absolute discretion, determine to be necessary or advisable; and (d) the lapse of any such reasonable period of time following the date the RSUs vest as the Plan Administrator may from time to time establish for reasons of administrative convenience.
ARTICLE II.
OTHER PROVISIONS
1.4RSU Award and Interests Not Transferable.  This RSU Award and the rights and privileges conferred hereby, including the RSUs awarded hereunder, shall not be liable for the debts, contracts or engagements of Participant or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect.
1.5Rights as Shareholder.  Neither the Participant nor any person claiming under or through the Participant shall have any of the rights or privileges of a shareholder of the Corporation in respect of any Shares issuable hereunder unless and until certificates representing such Shares (which may be in uncertificated form) will have been issued and recorded on the books and records of the Corporation or its transfer agents or registrars, and delivered to the Participant (including through electronic delivery to a brokerage account).   After such issuance, recordation and delivery, the Participant shall have all the rights of a shareholder of the Corporation, including with respect to the right to vote the Shares and the right to receive any cash or share dividends or other distributions paid to or made with respect to the Shares; provided, however, that at the discretion of the Corporation, and prior to the delivery of Shares, Participant may be required to execute a shareholders agreement in such form as shall be determined by the Corporation. 
1.6No Right to Continued Service.  Nothing in the Plan or in this Agreement shall be interpreted to interfere with or limit in any way the right of the Corporation or any Parent or Subsidiary to terminate Participant’s employment at any time, nor confer upon Participant the right to continue in the employ of the Corporation or any Parent or Subsidiary.
1.7Governing Law.   This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.
1.8Conformity to Securities Laws.  Participant acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state securities laws and regulations.  Notwithstanding anything herein to the contrary, the Plan shall be 
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        ( Restricted Stock Unit Grant Notice 03-2018.doc)
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Exhibit 10.4

administered, and the Shares are to be issued, only in such a manner as to conform to such laws, rules and regulations.  To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.
1.9Notices.  Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by electronic mail (with return receipt requested and received) or fax or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified, if to the Corporation, at its principal offices, and if to Participant, at Participant’s address, electronic mail address or fax number in the Corporation’s employee records or as subsequently modified by written notice.
1.10Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.
1.11Severability.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.  In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of the Agreement shall be enforceable in accordance with its terms.
1.12Entire Agreement; Enforcement of Rights.   This Agreement and the Plan set forth the entire agreement and understanding of the parties relating to the subject matter herein and merge all prior discussions between them.  No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement.  
1.13Successors and Assigns.  The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Corporation’s successors and assigns.  The Corporation may assign its rights under this Agreement to any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Corporation without the prior written consent of Participant. The rights and obligations of Participant under this Agreement may only be assigned with the prior written consent of the Corporation.
1.14Section 409A.  This RSU Award is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section 409A”), and, accordingly, the Shares issuable pursuant to the RSUs hereunder shall be distributed to Participant no later than the later of: (i) the fifteenth (15th) day of the third month following Participant’s first taxable year in which such RSUs are no longer subject to a substantial risk of forfeiture, and (ii) the fifteenth (15th) day of the third month following first taxable year of the Corporation in which such RSUs are no longer subject to substantial risk of forfeiture, as determined in accordance with Section 409A and any Treasury Regulations and other guidance issued thereunder.  For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each payment that Participant may be eligible to receive under this Agreement shall be treated as a separate and distinct payment.
1.15Broker-Assisted Sales.  In the event of any broker-assisted sale of Shares in connection with the payment of any Tax Withholding Obligation as provided in Section 1.2(c): (a) any Shares to be sold through a broker-assisted sale will be sold on the day the Tax Withholding Obligation arises or as soon thereafter as practicable; (b) such Shares may be sold as part of a block trade with other participants in the Plan in which all participants receive an average price; (c) Participant will be responsible for all broker’s fees and other costs of sale, and Participant agrees to indemnify and hold the Corporation harmless from any losses, costs, damages, or expenses relating to any such sale; (d) to the extent the proceeds of such sale exceed the applicable Tax Withholding Obligation, the Corporation agrees to pay such excess in cash to Participant as soon as reasonably practicable; (e) Participant acknowledges that the Corporation or its designee is under no obligation to arrange for such sale at any particular price, and that the proceeds of any such sale may not be sufficient to satisfy the applicable Tax Withholding Obligation; 
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        ( Restricted Stock Unit Grant Notice 03-2018.doc)
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Exhibit 10.4

and (f) in the event the proceeds of such sale are insufficient to satisfy the applicable Tax Withholding Obligation, Participant agrees to pay immediately upon demand to the Corporation or its Subsidiary with respect to which the Tax Withholding Obligation arises an amount in cash sufficient to satisfy any remaining portion of the Corporation’s or the applicable Subsidiary’s Tax Withholding Obligation.
1.16Paperless Administration.  By accepting this RSU Award, Participant hereby agrees to receive documentation related to the RSU Award by electronic delivery, such as a system using an internet website or interactive voice response, maintained by the Corporation or a third party designated by the Corporation. 

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        ( Restricted Stock Unit Grant Notice 03-2018.doc)
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