Document:

Exhibit
10.11

 

Eton
Pharmaceuticals, Inc.

 

2018
Equity Incentive Plan

 

Last
Amended January 2021

 

	1.	General.

 

(a)
Successor to and Continuation of Prior Plan. The Plan is intended as the successor to and continuation of the Eton Pharmaceuticals,
Inc. 2017 Equity Incentive Plan (the “Prior Plan”). From and after 12:01 a.m. Eastern Time on the IPO
Date, no additional stock awards will be granted under the Prior Plan. All Awards granted on or after 12:01 a.m. Eastern Time
on the IPO Date will be granted under this Plan. All stock awards granted under the Prior Plan will remain subject to the terms
of the Prior Plan.

 

(i)
Any shares that would otherwise remain available for future grants under the Prior Plan as of 12:01 a.m. Eastern Time on the
IPO Date (the “Prior Plan’s Available Reserve”) will cease to be available under the Prior Plan
at such time. Instead, that number of shares of Common Stock equal to the Prior Plan’s Available Reserve will be added to
the Share Reserve (as further described in Section 3(a) below) and will be immediately available for grants and issuance pursuant
to Stock Awards hereunder, up to the maximum number set forth in Section 3(a) below.

 

(ii)
In addition, from and after 12:01 a.m. Eastern Time on the IPO Date, any shares subject, at such time, to outstanding stock
awards granted under the Prior Plan that (i) expire or terminate for any reason prior to exercise or settlement; (ii) are forfeited
because of the failure to meet a contingency or condition required to vest such shares or otherwise return to the Company; or
(iii) are reacquired, withheld (or not issued) to satisfy a tax withholding obligation in connection with an award or to satisfy
the purchase price or exercise price of a stock award (such shares the “Returning Shares”) will immediately
be added to the Share Reserve (as further described in Section 3(a) below) as and when such shares become Returning Shares, up
to the maximum number set forth in Section 3(a) below.

 

(b)
Eligible Award Recipients. Employees, Directors and Consultants are eligible to receive Awards.

 

(c)
Available Awards. The Plan provides for the grant of the following types of Awards: (i) Incentive Stock Options, (ii) Nonstatutory
Stock Options, (iii) Stock Appreciation Rights (iv) Restricted Stock Awards, (v) Restricted Stock Unit Awards, (vi) Performance
Stock Awards, (vii) Performance Cash Awards, and (viii) Other Stock Awards.

 

(d)
Purpose. The Plan, through the granting of Awards, is intended to help the Company secure and retain the services of eligible
award recipients, provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate
and provide a means by which the eligible recipients may benefit from increases in value of the Common Stock.

 

	2.	Administration.

 

(a)
Administration by Board. The Board will administer the Plan. The Board may delegate administration of the Plan to a Committee
or Committees, as provided in Section 2(c).

 

    	 

     

    

 

(b)
Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:

 

(i)
To determine (A) who will be granted Awards; (B) when and how each Award will be granted; (C) what type of Award will be granted;
(D) the provisions of each Award (which need not be identical), including when a person will be permitted to exercise or otherwise
receive cash or Common Stock under the Award; (E) the number of shares of Common Stock subject to, or the cash value of, an Award;
and (F) the Fair Market Value applicable to a Stock Award.

 

(ii)
To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for
administration of the Plan and Awards. The Board, in the exercise of these powers, may correct any defect, omission or inconsistency
in the Plan or in any Award Agreement or in the written terms of a Performance Cash Award, in a manner and to the extent it will
deem necessary or expedient to make the Plan or Award fully effective.

 

(iii)
To settle all controversies regarding the Plan and Awards granted under it.

 

(iv)
To accelerate, in whole or in part, the time at which an Award may be exercised or vest (or the time at which cash or shares
of Common Stock may be issued in settlement thereof).

 

(v)
To suspend or terminate the Plan at any time. Except as otherwise provided in the Plan or an Award Agreement, suspension or
termination of the Plan will not materially impair a Participant’s rights under the Participant’s then-outstanding
Award without the Participant’s written consent except as provided in subsection (viii) below.

 

(vi)
To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, by adopting amendments
relating to Incentive Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and/or bringing
the Plan or Awards granted under the Plan into compliance with the requirements for Incentive Stock Options or ensuring that they
are exempt from or compliant with the requirements for nonqualified deferred compensation under Section 409A of the Code, subject
to the limitations, if any, of applicable law. If required by applicable law or listing requirements, and except as provided in
Section 9(a) relating to Capitalization Adjustments, the Company will seek stockholder approval of any amendment of the Plan that
(A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the
class of individuals eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to Participants
under the Plan, (D) materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (E)
materially extends the term of the Plan, or (F) materially expands the types of Awards available for issuance under the Plan.
Except as otherwise provided in the Plan or an Award Agreement, no amendment of the Plan will materially impair a Participant’s
rights under an outstanding Award without the Participant’s written consent.

 

(vii)
To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended
to satisfy the requirements of (A) Section 422 of the Code regarding incentive stock options or (B) Rule 16b-3.

 

    	 

     

    

 

(viii)
To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but
not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement,
subject to any specified limits in the Plan that are not subject to Board discretion; provided however, that a Participant’s
rights under any Award will not be impaired by any such amendment unless (A) the Company requests the consent of the affected
Participant, and (B) such Participant consents in writing. Notwithstanding the foregoing, (1) a Participant’s rights will
not be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that the amendment,
taken as a whole, does not materially impair the Participant’s rights, and (2) subject to the limitations of applicable
law, if any, the Board may amend the terms of any one or more Awards without the affected Participant’s consent (A) to maintain
the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (B) to change the terms of an Incentive
Stock Option, if such change results in impairment of the Award solely because it impairs the qualified status of the Award as
an Incentive Stock Option under Section 422 of the Code; (C) to clarify the manner of exemption from, or to bring the Award into
compliance with, Section 409A of the Code; or (D) to comply with other applicable laws or listing requirements.

 

(ix)
Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company and that are not in conflict with the provisions of the Plan or Awards.

 

(x)
To adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Directors
or Consultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary
for immaterial modifications to the Plan or any Award Agreement that are required for compliance with the laws of the relevant
foreign jurisdiction).

 

(xi)
To effect, with the consent of any adversely affected Participant, (A) the reduction of the exercise, purchase or strike price
of any outstanding Stock Award; (B) the cancellation of any outstanding Stock Award and the grant in substitution therefor of
a new (1) Option or SAR, (2) Restricted Stock Award, (3) Restricted Stock Unit Award, (4) Other Stock Award, (5) cash and/or (6)
other valuable consideration determined by the Board, in its sole discretion, with any such substituted award (x) covering the
same or a different number of shares of Common Stock as the cancelled Stock Award and (y) granted under the Plan or another equity
or compensatory plan of the Company; or (C) any other action that is treated as a repricing under generally accepted accounting
principles.

 

	 	(c)	Delegation
    to Committee.

 

(i)
General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration
of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee
of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the
Board will thereafter be to the Committee or subcommittee, as applicable). Any delegation of administrative powers will be reflected
in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Board or Committee (as applicable).
The Committee may, at any time, abolish the subcommittee and/or revest in the Committee any powers delegated to the subcommittee.
The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the
Board some or all of the powers previously delegated.

 

(ii)
Rule 16b-3 Compliance. The Committee may consist solely of two or more Non-Employee Directors, in accordance with Rule 16b-3.

 

    	 

     

    

 

(d)
Delegation to an Officer. The Board may delegate to one or more Officers the authority to do one or both of the following
(i) designate Employees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by applicable
law, other Stock Awards) and, to the extent permitted by applicable law, the terms of such Awards, and (ii) determine the number
of shares of Common Stock to be subject to such Stock Awards granted to such Employees; provided, however, that the Board
resolutions regarding such delegation will specify the total number of shares of Common Stock that may be subject to the Stock
Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself. Any such Stock Awards
will be granted on the form of Stock Award Agreement most recently approved for use by the Committee or the Board, unless otherwise
provided in the resolutions approving the delegation authority. The Board may not delegate authority to an Officer who is acting
solely in the capacity of an Officer (and not also as a Director) to determine the Fair Market Value pursuant to Section 13(w)(iii)
below.

 

(e)
Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith will
not be subject to review by any person and will be final, binding and conclusive on all persons.

 

	3.	Shares
    Subject to the Plan.

 

(a)
Share Reserve. Subject to Section 9(a) relating to Capitalization Adjustments, and the following sentence regarding the annual
increase, the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards will not exceed 5,000,000
shares (the “Share Reserve”), which is (i) the number of shares subject to the Prior Plan’s Available
Reserve plus (ii) the number of shares that are Returning Shares, as such shares become available from time to time. In
addition, the Share Reserve will automatically increase on January 1st of each year, for a period of not more than ten years,
commencing on January 1st of the year following the year in which the IPO Date occurs and ending on (and including) January 1,
2028, in an amount equal to 4% of the total number of shares of Capital Stock outstanding on December 31st of the preceding calendar
year. Notwithstanding the foregoing, the Board may act prior to January 1st of a given year to provide that there will be no January
1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number
of shares of Common Stock than would otherwise occur pursuant to the preceding sentence.

 

For
clarity, the Share Reserve in this Section 3(a) is a limitation on the number of shares of Common Stock that may be issued pursuant
to the Plan. Accordingly, this Section 3(a) does not limit the granting of Stock Awards except as provided in Section 7(a). Shares
may be issued in connection with a merger or acquisition as permitted by Nasdaq Listing Rule 5635(c) or, if applicable, NYSE Listed
Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the
number of shares available for issuance under the Plan.

 

(b)
Reversion of Shares to the Share Reserve. If a Stock Award or any portion thereof (i) expires or otherwise terminates without
all of the shares covered by such Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives
cash rather than stock), such expiration, termination or settlement will not reduce (or otherwise offset) the number of shares
of Common Stock that may be available for issuance under the Plan. If any shares of Common Stock issued pursuant to a Stock Award
are forfeited back to or repurchased or reacquired by the Company for any reason, including because of the failure to meet a contingency
or condition required to vest such shares in the Participant, then the shares that are forfeited or repurchased or reacquired
will revert to and again become available for issuance under the Plan. Any shares reacquired by the Company in satisfaction of
tax withholding obligations on a Stock Award or as consideration for the exercise or purchase price of a Stock Award will again
become available for issuance under the Plan.

 

(c)
Incentive Stock Option Limit. Subject to the Share Reserve and Section 9(a) relating to Capitalization Adjustments, the aggregate
maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options will be 1,000,000
shares of Common Stock.

 

    	 

     

    

 

(d)
Limitation on Grants to Non-Employee Directors. The maximum number of shares of Common Stock subject to Stock Awards granted
under the Plan or otherwise during a single calendar year to any Non-Employee Director, taken together with any cash fees paid
by the Company to such Non- Employee Director during such calendar year for service on the Board, will not exceed $500,000 in
total value (calculating the value of any such Stock Awards based on the grant date fair value of such Stock Awards for financial
reporting purposes), or, with respect to the calendar year in which a Non-Employee Director is first appointed or elected to the
Board, $800,000.

 

(e)
Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock,
including shares repurchased by the Company on the open market or otherwise.

 

	4.	Eligibility.

 

(a)
Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to employees of the Company or a “parent
corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of
the Code). Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants; provided, however,
that Stock Awards may not be granted to Employees, Directors and Consultants who are providing Continuous Service only to any
“parent” of the Company, as such term is defined in Rule 405 of the Securities Act, unless (i) the stock underlying
such Stock Awards is treated as “service recipient stock” under Section 409A of the Code (for example, because the
Stock Awards are granted pursuant to a corporate transaction such as a spin off transaction), (ii) the Company, in consultation
with its legal counsel, has determined that such Stock Awards are otherwise exempt from Section 409A of the Code, or (iii) the
Company, in consultation with its legal counsel, has determined that such Stock Awards comply with the distribution requirements
of Section 409A of the Code.

 

(b)
Ten Percent Stockholders. A Ten Percent Stockholder will not be granted an Incentive Stock Option unless the exercise price
of such Option is at least 110% of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration
of five years from the date of grant.

 

	5.	Provisions
    Relating to Options and Stock Appreciation Rights.

 

Each
Option or SAR will be in such form and will contain such terms and conditions as the Board deems appropriate. All Options will
be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are
issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of
Option. If an Option is not specifically designated as an Incentive Stock Option, or if an Option is designated as an Incentive
Stock Option but some portion or all of the Option fails to qualify as an Incentive Stock Option under the applicable rules, then
the Option (or portion thereof) will be a Nonstatutory Stock Option. The provisions of separate Options or SARs need not be identical;
provided, however, that each Award Agreement will conform to (through incorporation of provisions hereof by reference in
the applicable Award Agreement or otherwise) the substance of each of the following provisions:

 

(a)
Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after
the expiration of ten (10) years from the date of its grant or such shorter period specified in the Award Agreement.

 

    	 

     

    

 

(b)
Exercise Price. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise or strike price
of each Option or SAR will be not less than 100% of the Fair Market Value of the Common Stock subject to the Option or SAR on
the date the Award is granted. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price
lower than 100% of the Fair Market Value of the Common Stock subject to the Award if such Award is granted pursuant to an assumption
of or substitution for another option or stock appreciation right pursuant to a corporate transaction and in a manner consistent
with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code. Each SAR will be denominated in
shares of Common Stock equivalents.

 

(c)
Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the exercise of an Option may be paid,
to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods
of payment set forth below. The Board will have the authority to grant Options that do not permit all of the following methods
of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company
to use a particular method of payment. The permitted methods of payment are as follows:

 

(i)
by cash, check, bank draft or money order payable to the Company;

 

(ii)
pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance
of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable
instructions to pay the aggregate exercise price to the Company from the sales proceeds;

 

(iii)
by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;

 

(iv)
if an Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will
reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value
that does not exceed the aggregate exercise price; provided, however, that the Company will accept a cash or other payment
from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in
the number of whole shares to be issued. Shares of Common Stock will no longer be subject to an Option and will not be exercisable
thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise price pursuant to the “net
exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy
tax withholding obligations; or

 

(v)
in any other form of legal consideration that may be acceptable to the Board and specified in the applicable Award Agreement.

 

(d)
Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide written notice of exercise to
the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such SAR. The appreciation
distribution payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the aggregate Fair
Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock equal to the number of Common Stock
equivalents in which the Participant is vested under such SAR, and with respect to which the Participant is exercising the SAR
on such date, over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the Participant
is exercising the SAR on such date. The appreciation distribution may be paid in Common Stock, in cash, in any combination of
the two or in any other form of consideration, as determined by the Board and contained in the Award Agreement evidencing such
SAR.

 

 

    	 

     

    

 

(e)
Transferability of Options and SARs. The Board may, in its sole discretion, impose such limitations on the transferability
of Options and SARs as the Board will determine. In the absence of such a determination by the Board to the contrary, the following
restrictions on the transferability of Options and SARs will apply:

 

(i)
Restrictions on Transfer. An Option or SAR may be transferred either (i) by instrument to the Participant’s “Immediate
Family” (as defined below), (ii) by instrument to an inter vivos or testamentary trust (or other entity) in which the Option
or SAR or Stock Award is to be passed to the Participant’s designated beneficiaries, or (iii) by gift to charitable institutions.
Any transferee of the Participant’s rights shall succeed and be subject to all of the terms of the applicable Award and
the Plan. “Immediate Family” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, and
shall include adoptive relationships. Otherwise, an Option or SAR will not be transferable except by will or by the laws of descent
and distribution (or pursuant to subsections (ii) and (iii) below) and will be exercisable during the lifetime of the Participant
only by the Participant. In addition, the Board may permit transfer of the Option or SAR in a manner that is not prohibited by
applicable tax and securities laws. Except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration.

 

(ii)
Domestic Relations Orders. Subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred
pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument
as permitted by Treasury Regulation Section 1.421-1(b)(2). If an Option is an Incentive Stock Option, such Option may be deemed
to be a Nonstatutory Stock Option as a result of such transfer.

 

(iii)
Beneficiary Designation. Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering
written notice to the Company, in a form approved by the Company (or the designated broker), designate a third party who, on the
death of the Participant, will thereafter be entitled to exercise the Option or SAR and receive the Common Stock or other consideration
resulting from such exercise. In the absence of such a designation, upon the death of the Participant, the executor or administrator
of the Participant’s estate will be entitled to exercise the Option or SAR and receive the Common Stock or other consideration
resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time, including due to any
conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.

 

(f)
Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR may vest and become exercisable
in periodic installments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on
the time or times when it may or may not be exercised (which may be based on the satisfaction of Performance Goals or other criteria)
as the Board may deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this Section
5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common Stock as to which an Option
or SAR may be exercised.

 

(g)
Termination of Continuous Service. Except as otherwise provided in the applicable Award Agreement or other agreement between
the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause and other than upon
the Participant’s death or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant
was entitled to exercise such Award as of the date of termination of Continuous Service) within the period of time ending on the
earlier of (i) the date that is three (3) months following the termination of the Participant’s Continuous Service (or such
longer or shorter period specified in the applicable Award Agreement, which period will not be less than thirty (30) days if necessary
to comply with applicable laws unless such termination is for Cause) and (ii) the expiration of the term of the Option or SAR
as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her
Option or SAR (as applicable) within the applicable time frame, the Option or SAR will terminate.

 

    	 

     

    

 

(h)
Extension of Termination Date. Except as otherwise provided in the applicable Award Agreement or other written agreement between
the Participant and the Company, if the exercise of an Option or SAR following the termination of the Participant’s Continuous
Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited at any time
solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then
the Option or SAR will terminate on the earlier of (i) the expiration of a total period of time (that need not be consecutive)
equal to the applicable post termination exercise period after the termination of the Participant’s Continuous Service during
which the exercise of the Option or SAR would not be in violation of such registration requirements, and (ii) the expiration of
the term of the Option or SAR as set forth in the applicable Award Agreement. In addition, unless otherwise provided in a Participant’s
Award Agreement, if the sale of any Common Stock received on exercise of an Option or SAR following the termination of the Participant’s
Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option or SAR will
terminate on the earlier of (i) the expiration of a period of months (that need not be consecutive) equal to the applicable post-
termination exercise period after the termination of the Participant’s Continuous Service during which the sale of the Common
Stock received upon exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, or
(ii) the expiration of the term of the Option or SAR as set forth in the applicable Award Agreement.

 

(i)
Disability of Participant. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant
and the Company, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the
Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or
SAR as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the
date twelve (12) months following such termination of Continuous Service (or such longer or shorter period specified in the Award
Agreement, which period will not be less than six (6) months if necessary to comply with applicable laws) and (ii) the expiration
of the term of the Option or SAR as set forth in the Award Agreement. If, after termination of Continuous Service, the Participant
does not exercise his or her Option or SAR within the applicable time frame, the Option or SAR (as applicable) will terminate.

 

(j)
Death of Participant. Except as otherwise provided in the applicable Award Agreement or other agreement between the Participant
and the Company, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii)
the Participant dies within the period (if any) specified in the Award Agreement for exercisability after the termination of the
Participant’s Continuous Service for a reason other than death, then the Option or SAR may be exercised (to the extent the
Participant was entitled to exercise such Option or SAR as of the date of death) by the Participant’s estate, by a person
who acquired the right to exercise the Option or SAR by bequest or inheritance or by a person designated to exercise the Option
or SAR upon the Participant’s death, but only within the period ending on the earlier of (i) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the Award Agreement, which period will not be less
than six (6) months if necessary to comply with applicable laws) and (ii) the expiration of the term of such Option or SAR as
set forth in the Award Agreement. If, after the Participant’s death, the Option or SAR is not exercised within the applicable
time frame, the Option or SAR (as applicable) will terminate.

 

(k)
Termination for Cause. Except as explicitly provided otherwise in a Participant’s Award Agreement or other individual
written agreement between the Company or any Affiliate and the Participant, if a Participant’s Continuous Service is terminated
for Cause, the Option or SAR will terminate immediately upon such Participant’s termination of Continuous Service, and the
Participant will be prohibited from exercising his or her Option or SAR from and after the time of such termination of Continuous
Service.

 

    	 

     

    

 

(l)
Non-Exempt Employees. If an Option or SAR is granted to an Employee who is a non- exempt employee for purposes of the Fair
Labor Standards Act of 1938, as amended, the Option or SAR will not be first exercisable for any shares of Common Stock until
at least six (6) months following the date of grant of the Option or SAR (although the Award may vest prior to such date). Consistent
with the provisions of the Worker Economic Opportunity Act, (i) if such non-exempt Employee dies or suffers a Disability, (ii)
upon a Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii) upon a Change in Control,
or (iv) upon the Participant’s retirement (as such term may be defined in the Participant’s Award Agreement, in another
agreement between the Participant and the Company, or, if no such definition, in accordance with the Company’s then current
employment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier than six (6) months following
the date of grant. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection
with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay. To the extent permitted and/or
required for compliance with the Worker Economic Opportunity Act to ensure that any income derived by a non-exempt employee in
connection with the exercise, vesting or issuance of any shares under any other Stock Award will be exempt from the employee’s
regular rate of pay, the provisions of this Section 5(l) will apply to all Stock Awards and are hereby incorporated by reference
into such Stock Award Agreements.

 

	 	6.	Provisions
    of Stock Awards Other than Options and SARs.

 

(a)
Restricted Stock Awards. Each Restricted Stock Award Agreement will be in such form and will contain such terms and conditions
as the Board deems appropriate. To the extent consistent with the Company’s bylaws, at the Board’s election, shares
of Common Stock may be (i) held in book entry form subject to the Company’s instructions until any restrictions relating
to the Restricted Stock Award lapse; or (ii) evidenced by a certificate, which certificate will be held in such form and manner
as determined by the Board. The terms and conditions of Restricted Stock Award Agreements may change from time to time, and the
terms and conditions of separate Restricted Stock Award Agreements need not be identical. Each Restricted Stock Award Agreement
will conform to (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each
of the following provisions:

 

(i)
Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash, check, bank draft or money order payable
to the Company, (B) past or future services to the Company or an Affiliate, or (C) any other form of legal consideration that
may be acceptable to the Board, in its sole discretion, and permissible under applicable law.

 

(ii)
Vesting. Shares of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company
in accordance with a vesting schedule to be determined by the Board.

 

(iii)
Termination of Participant’s Continuous Service. If a Participant’s Continuous Service terminates, the Company
may receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant
as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement.

 

(iv)
Transferability. Rights to acquire shares of Common Stock under Restricted Stock Awards may be transferred either (i) by instrument
to the Participant’s “Immediate Family” (as defined below), (ii) by instrument to an inter vivos or testamentary
trust (or other entity) in which the Option or SAR or Stock Award is to be passed to the Participant’s designated beneficiaries,
or (iii) by gift to charitable institutions. Any transferee of the Participant’s rights shall succeed and be subject to
all of the terms of the applicable Award and the Plan. “Immediate Family” means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, and shall include adoptive relationships. Otherwise, rights to acquire shares of Common Stock
under the Restricted Stock Award Agreement will be transferable by the Participant only upon such terms and conditions as are
set forth in the Restricted Stock Award Agreement, as the Board will determine in its sole discretion, so long as Common Stock
awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement.

 

(v)
Dividends. A Restricted Stock Award Agreement may provide that any dividends paid on Restricted Stock will be subject to the
same vesting and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they relate.

 

    	 

     

    

 

(b)
Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms
and conditions as the Board deems appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from
time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical. Each Restricted
Stock Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the Agreement or otherwise)
the substance of each of the following provisions:

 

(i)
Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any,
to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration
to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in
any form of legal consideration that may be acceptable to the Board, in its sole discretion, and permissible under applicable
law.

 

(ii)
Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions
to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.

 

(iii)
Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any
combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit
Award Agreement.

 

(iv)
Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may
impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject
to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.

 

(v)
Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock
Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the
Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit
Award in such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit Award credited by
reason of such dividend equivalents will be subject to all of the same terms and conditions of the underlying Restricted Stock
Unit Award Agreement to which they relate.

 

(vi)
Termination of Participant’s Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit
Award Agreement or other written agreement between a Participant and the Company or an Affiliate, such portion of the Restricted
Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.

 

	 	(c)	Performance
    Awards.

 

(i)
Performance Stock Awards. A Performance Stock Award is a Stock Award that is payable (including that may be granted, may vest
or may be exercised) contingent upon the attainment during a Performance Period of certain Performance Goals. A Performance Stock
Award may, but need not, require the Participant’s completion of a specified period of Continuous Service. The length of
any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure of whether and to
what degree such Performance Goals have been attained will be conclusively determined by the Board or Committee, in its sole discretion.
In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board or the Committee may determine
that cash may be used in payment of Performance Stock Awards.

 

    	 

     

    

 

(ii)
Performance Cash Awards. A Performance Cash Award is a cash award that is payable contingent upon the attainment during a
Performance Period of certain Performance Goals. A Performance Cash Award may also require the completion of a specified period
of Continuous Service. At the time of grant of a Performance Cash Award, the length of any Performance Period, the Performance
Goals to be achieved during the Performance Period, and the measure of whether and to what degree such Performance Goals have
been attained will be conclusively determined by the Board or Committee, in its sole discretion. The Board or Committee may specify
the form of payment of Performance Cash Awards, which may be cash or other property, or may provide for a Participant to have
the option for his or her Performance Cash Award, or such portion thereof as the Board may specify, to be paid in whole or in
part in cash or other property.

 

(iii)
Board Discretion. The Board retains the discretion to adjust or eliminate the compensation or economic benefit due upon attainment
of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for a Performance Period.
Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement
as specified in the Stock Award Agreement or the written terms of a Performance Cash Award.

 

(d)
Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference to, or otherwise based on, Common
Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less
than 100% of the Fair Market Value of the Common Stock at the time of grant) may be granted either alone or in addition to Stock
Awards provided for under Section 5 and the preceding provisions of this Section 6. Subject to the provisions of the Plan, the
Board will have sole and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards
will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Stock
Awards and all other terms and conditions of such Other Stock Awards.

 

	7.	Covenants
    of the Company.

 

(a)
Availability of Shares. The Company will keep available at all times the number of shares of Common Stock reasonably required
to satisfy then-outstanding Stock Awards.

 

(b)
Securities Law Compliance. The Company will seek to obtain from each regulatory commission or agency having jurisdiction over
the Plan, as necessary, such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon
exercise or vesting of the Stock Awards; provided, however, that this undertaking will not require the Company to register
under the Securities Act or other securities or applicable laws, the Plan, any Stock Award or any Common Stock issued or issuable
pursuant to any such Stock Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from
any such regulatory commission or agency the authority that counsel for the Company deems necessary or advisable for the lawful
issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell
Common Stock upon exercise or vesting of such Stock Awards unless and until such authority is obtained. A Participant will not
be eligible for the grant of an Award or the subsequent issuance of cash or Common Stock pursuant to the Award if such grant or
issuance would be in violation of any applicable securities law.

 

    	 

     

    

 

(c)
No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder
as to the tax treatment or time or manner of exercising such Stock Award. Furthermore, the Company will have no duty or obligation
to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award
may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such
Award.

 

	8.	Miscellaneous.

 

(a)
Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Stock Awards will
constitute general funds of the Company.

 

(b)
Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant
will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when
the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant.
In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action approving
the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award
Agreement or related grant documents as a result of a clerical error in the papering of the Award Agreement or related grant documents,
the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement
or related grant documents.

 

(c)
Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect
to, any shares of Common Stock subject to an Award unless and until (i) such Participant has satisfied all requirements for exercise
of, or the issuance of shares of Common Stock under, the Award pursuant to its terms, and (ii) the issuance of the Common Stock
subject to such Award has been entered into the books and records of the Company.

 

(d)
No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder
or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company
or an Affiliate in the capacity in effect at the time the Award was granted or will affect the right of the Company or an Affiliate
to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director
pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state or foreign
jurisdiction in which the Company or the Affiliate is domiciled or incorporated, as the case may be.

 

(e)
Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or
her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee
of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended
leave of absence) after the date of grant of any Award to the Participant, the Board has the right in its sole discretion to (x)
make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to
vest or become payable after the date of such change in time commitment, and (y) in lieu of or in combination with such a reduction,
extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have
no right with respect to any portion of the Award that is so reduced or extended.

 

    	 

     

    

 

(f)
Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined at the time of grant) of
Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar
year (under all plans of the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or otherwise
does not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according
to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options,
notwithstanding any contrary provision of the applicable Option Agreement(s).

 

(g)
Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under
any Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in
financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable
and experienced in financial and business matters and that such Participant is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the Award; and (ii) to give written assurances satisfactory to the
Company stating that the Participant is acquiring Common Stock subject to the Award for the Participant’s own account and
not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances
given pursuant to such requirements, will be inoperative if (A) the issuance of the shares upon the exercise or acquisition of
Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities
Act, or (B) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company,
place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with
applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

 

(h)
Withholding Obligations. Unless prohibited by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy
any federal, state or local tax withholding obligation relating to an Award by any of the following means or by a combination
of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of
Common Stock issued or otherwise issuable to the Participant in connection with the Stock Award; provided, however, that
no shares of Common Stock are withheld with a value exceeding the maximum amount of tax required to be withheld by law (or such
lesser amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes);
(iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant;
or (v) by such other method as may be set forth in the Award Agreement.

 

(i)
Electronic Delivery. Any reference herein to a “written” agreement or document will include any agreement or document
delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet
(or other shared electronic medium controlled by the Company to which the Participant has access).

 

(j)
Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of
Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred
and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be
made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions
while a Participant is still an employee or otherwise providing services to the Company. The Board is authorized to make deferrals
of Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments,
following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent
with the provisions of the Plan and in accordance with applicable law.

 

    	 

     

    

 

(k)
Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy
that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on
which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer
Protection Act or other applicable law. In addition, the Board may impose such other clawback, recovery or recoupment provisions
in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in
respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of an event constituting Cause.
No recovery of compensation under such a clawback policy will be an event giving rise to a right to voluntary terminate employment
upon a “resignation for good reason,” or for a “constructive termination” or any similar term under any
plan of or agreement with the Company.

 

(l)
Compliance with Section 409A of the Code. Unless otherwise expressly provided for in an Award Agreement, the Plan and Award
Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder
exempt from Section 409A of the Code, and, to the extent not so exempt, in compliance with Section 409A of the Code. If the Board
determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A of the Code, the Award
Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section
409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby
incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Award
Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an
Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee”
for purposes of Section 409A of the Code, no distribution or payment of any amount that is due because of a “separation
from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) will be issued
or paid before the date that is six months following the date of such Participant’s “separation from service”
or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies
with Section 409A of the Code, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses,
with the balance paid thereafter on the original schedule.

 

	9.	Adjustments
    upon Changes in Common Stock; Other Corporate Events.

 

(a)
Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board will appropriately and proportionately
adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and
maximum number of securities by which the share reserve is to increase automatically each year pursuant to Section 3(a), (iii)
the class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant
to Section 3(c), (iv) the class(es) and maximum number of securities that may be awarded to any Non- Employee Director pursuant
to Section 3(d), and (v) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards.
The Board will make such adjustments, and its determination will be final, binding and conclusive.

 

(b)
Dissolution. Except as otherwise provided in the Stock Award Agreement, in the event of a Dissolution of the Company, all
outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock not subject to a
forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such Dissolution,
and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased
or reacquired by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service; provided,
however, that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or
no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before
the Dissolution is completed but contingent on its completion.

 

    	 

     

    

 

(c)
Transaction. The following provisions will apply to Stock Awards in the event of a Transaction unless otherwise provided in
the instrument evidencing the Stock Award or any other written agreement between the Company or any Affiliate and the Participant
or unless otherwise expressly provided by the Board at the time of grant of a Stock Award. In the event of a Transaction, then,
notwithstanding any other provision of the Plan, the Board may take one or more of the following actions with respect to Stock
Awards, contingent upon the closing or completion of the Transaction:

 

(i)
arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company)
to assume or continue the Stock Award or to substitute a similar stock award for the Stock Award (including, but not limited to,
an award to acquire the same consideration paid to the stockholders of the Company pursuant to the Transaction);

 

(ii)
arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued
pursuant to the Stock Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s
parent company);

 

(iii)
accelerate the vesting, in whole or in part, of the Stock Award (and, if applicable, the time at which the Stock Award may
be exercised) to a date prior to the effective time of such Transaction as the Board determines (or, if the Board does not determine
such a date, to the date that is five days prior to the effective date of the Transaction), with such Stock Award terminating
if not exercised (if applicable) at or prior to the effective time of the Transaction; provided, however, that the Board
may require Participants to complete and deliver to the Company a notice of exercise before the effective date of a Transaction,
which exercise is contingent upon the effectiveness of such Transaction;

 

(iv)
arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to
the Stock Award;

 

(v)
cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not exercised prior to the effective
time of the Transaction, in exchange for such cash consideration, if any, as the Board, in its sole discretion, may consider appropriate;
and

 

(vi)
make a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the value of the property
the Participant would have received upon the exercise of the Stock Award immediately prior to the effective time of the Transaction,
over (B) any exercise price payable by such holder in connection with such exercise. For clarity, this payment may be $0 if the
value of the property is equal to or less than the exercise price. Payments under this provision may be delayed to the same extent
that payment of consideration to the holders of the Company’s Common Stock in connection with the Transaction is delayed
as a result of escrows, earn outs, holdbacks or any other contingencies.

 

The
Board need not take the same action or actions with respect to all Stock Awards or portions thereof or with respect to all Participants.
The Board may take different actions with respect to the vested and unvested portions of a Stock Award.

 

(d)
Change in Control. A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change
in Control as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement
between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will automatically
occur.

 

    	 

     

    

 

	10.	Plan
    Term; Earlier Termination or Suspension of the Plan.

 

The
Board may suspend or terminate the Plan at any time. No Incentive Stock Options may be granted after the tenth anniversary of
the earlier of (i) the date the Plan is adopted by the Board (the “Adoption Date”), or (ii) the date
the Plan is approved by the stockholders of the Company. No Awards may be granted under the Plan while the Plan is suspended or
after it is terminated.

 

	11.	Existence
    of the Plan; Timing of First Grant or Exercise.

 

The
Plan will come into existence on the Adoption Date; provided, however, that no Stock Award may be granted prior to the
IPO Date. In addition, no Stock Award will be exercised (or, in the case of a Restricted Stock Award, Restricted Stock Unit Award,
Performance Share Award, or Other Stock Award, no Stock Award will be granted) and no Performance Cash Award will be settled unless
and until the Plan has been approved by the stockholders of the Company, which approval will be within 12 months after the date
the Plan is adopted by the Board.

 

	12.	Choice
    of Law.

 

The
laws of the State of Delaware will govern all questions concerning the construction, validity and interpretation of this Plan,
without regard to that state’s conflict of laws rules.

 

	13.	Definitions.
As used in the Plan, the following definitions will apply to
the capitalized terms indicated below:

 

(a)
“Affiliate” means, at the time of determination, any “parent” or “subsidiary”
of the Company as such terms are defined in Rule 405 of the Securities Act. The Board will have the authority to determine the
time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.

 

(b)
“Award” means a Stock Award or a Performance Cash Award.

 

(c)
“Award Agreement” means a written agreement between the Company and a Participant evidencing the
terms and conditions of an Award.

 

(d)
“Board” means the Board of Directors of the Company.

 

(e)
“Capital Stock” means each and every class of common stock of the Company, regardless of the number
of votes per share.

 

(f)
“Capitalization Adjustment” means any change that is made in, or other events that occur with respect
to, the Common Stock subject to the Plan or subject to any Stock Award after the Adoption Date without the receipt of consideration
by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property
other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares,
exchange of shares, change in corporate structure or any similar equity restructuring transaction, as that term is used in Statement
of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding
the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

 

    	 

     

    

 

(g)
“Cause” will have the meaning ascribed to such term in any written agreement between the Participant
and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the
occurrence of any of the following events: (i) such Participant’s commission of any felony or any crime involving fraud,
dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) such Participant’s attempted
commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) such Participant’s intentional,
material violation of any contract or agreement between the Participant and the Company or of any statutory duty owed to the Company;
(iv) such Participant’s unauthorized use or disclosure of the Company’s confidential information or trade secrets;
or (v) such Participant’s gross misconduct. The determination that a termination of the Participant’s Continuous Service
is either for Cause or without Cause will be made by the Company, in its sole discretion. Any determination by the Company that
the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such
Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any
other purpose.

 

(h)
“Change in Control” means the occurrence, in a single transaction or in a series of related transactions,
of any one or more of the following events:

 

(i)
any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50%
of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation
or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition
of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor,
any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series
of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities,
(C) on account of the acquisition of securities of the Company by any individual who is, on the IPO Date, either an executive
officer or a Director (either, an “IPO Investor”) and/or any entity in which an IPO Investor has a direct
or indirect interest (whether in the form of voting rights or participation in profits or capital contributions) of more than
50% (collectively, the “IPO Entities”) or on account of the IPO Entities continuing to hold shares that
come to represent more than 50% of the combined voting power of the Company’s then outstanding securities as a result of
the conversion of any class of the Company’s securities into another class of the Company’s securities having a different
number of votes per share pursuant to the conversion provisions set forth in the Company’s Amended and Restated Certificate
of Incorporation; or (D) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”)
exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition
of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur
(but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share
acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition
had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated
percentage threshold, then a Change in Control will be deemed to occur;

 

(ii)
there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately
after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior
thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined
outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than 50% of
the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction,
in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately
prior to such transaction; provided, however, that a merger, consolidation or similar transaction will not constitute a
Change in Control under this prong of the definition if the outstanding voting securities representing more than 50% of the combined
voting power of the surviving Entity or its parent are owned by the IPO Entities;

 

    	 

     

    

 

(iii)
there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated
assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all
of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the
voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of
the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; provided,
however, that a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets
of the Company and its Subsidiaries will not constitute a Change in Control under this prong of the definition if the outstanding
voting securities representing more than 50% of the combined voting power of the acquiring Entity or its parent are owned by the
IPO Entities;

 

(iv)
the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company,
or a complete dissolution or liquidation of the Company will otherwise occur, except for a liquidation into a parent corporation;
or

 

(v)
individuals who, on the IPO Date, are members of the Board (the “Incumbent Board”) cease for any
reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election
(or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent
Board then still in office, such new member will, for purposes of this Plan, be considered as a member of the Incumbent Board.

 

Notwithstanding
the foregoing definition or any other provision of the Plan, (A) the term Change in Control will not include a sale of assets,
merger or other transaction effected exclusively for the purpose of changing the domicile of the Company and (B) the definition
of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant
will supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no
definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition
will apply.

 

(i)
“Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations
and guidance thereunder.

 

(j)
“Committee” means a committee of one or more Directors to whom authority has been delegated by the
Board in accordance with Section 2(c).

 

(k)
“Common Stock” means, as of the IPO Date, the common stock of the Company, having one vote per share.

 

(l)
“Company” means Eton Pharmaceuticals, Inc., a Delaware corporation.

 

    	 

     

    

 

(m)
“Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate
to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors
of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service,
will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing,
a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available
to register either the offer or the sale of the Company’s securities to such person.

 

(n)
“Continuous Service” means that the Participant’s service with the Company or an Affiliate,
whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the
Participant renders such service, provided that there is no interruption or termination of the Participant’s service with
the Company or an Affiliate, will not terminate a Participant’s Continuous Service; provided, however, that if the
Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, in its sole
discretion, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to
qualify as an Affiliate. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s
sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence
approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers
between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous
Service for purposes of vesting in an Award only to such extent as may be provided in the Company’s leave of absence policy,
in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.

 

(o)
“Corporate Transaction” means the consummation, in a single transaction or in a series of related
transactions, of any one or more of the following events:

 

(i)
a sale or other disposition of all or substantially all, as determined by the Board, in its sole discretion, of the consolidated
assets of the Company and its Subsidiaries;

 

(ii)
a sale or other disposition of more than 50% of the outstanding securities of the Company;

 

(iii)
a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or

 

(iv)
a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of
Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by
virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

 

(p)
“Director” means a member of the Board.

 

(q)
“Disability” means, with respect to a Participant, the inability of such Participant to engage in
any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months, as provided
in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined by the Board on the basis of such medical evidence
as the Board deems warranted under the circumstances.

 

(r)
“Dissolution” means when the Company, after having executed a certificate of dissolution with the
State of Delaware (or other applicable state), has completely wound up its affairs. Conversion of the Company into a Limited Liability
Company (or any other pass-through entity) will not be considered a “Dissolution” for purposes of the Plan.

 

    	 

     

    

 

(s)
“Employee” means any person employed by the Company or an Affiliate. However, service solely as
a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes
of the Plan.

 

(t)
“Entity” means a corporation, partnership, limited liability company or other entity.

 

(u)
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

 

(v)
“Exchange Act Person” means any natural person, Entity or “group” (within the meaning
of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company
or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee
or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an
underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned,
directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of
the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange
Act) that, as of the IPO Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of
the combined voting power of the Company’s then outstanding securities.

 

(w)
“Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:

 

(i)
If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value
of a share of Common Stock will be, unless otherwise determined by the Board, the closing sales price for such stock as quoted
on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of
determination, as reported in a source the Board deems reliable.

 

(ii)
Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination,
then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.

 

(iii)
In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith and
in a manner that complies with Sections 409A and 422 of the Code.

 

(x)
“Incentive Stock Option” means an option granted pursuant to Section 5 of the Plan that is intended
to be, and qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.

 

(y)
“IPO Date” means the date of the underwriting agreement between the Company and the underwriter(s)
managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public
offering.

 

    	 

     

    

 

(z)
“Non-Employee Director” means a Director who either (i) is not a current employee or officer of
the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for
services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would
not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)),
does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K,
and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K;
or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.

 

(aa)
“Nonstatutory Stock Option” means any Option granted pursuant to Section 5 of the Plan that does
not qualify as an Incentive Stock Option.

 

(bb)
“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the
Exchange Act.

 

(cc)
“Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common
Stock granted pursuant to the Plan.

 

(dd)
“Option Agreement” means a written agreement between the Company and an Optionholder evidencing
the terms and conditions of an Option grant. Each Option Agreement will be subject to the terms and conditions of the Plan.

 

(ee)
“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable,
such other person who holds an outstanding Option.

 

(ff)
“Other Stock Award” means an award based in whole or in part by reference to the Common Stock which
is granted pursuant to the terms and conditions of Section 6(d).

 

(gg)
“Other Stock Award Agreement” means a written agreement between the Company and a holder of an Other
Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock Award Agreement will be subject
to the terms and conditions of the Plan.

 

(hh)
“Own,” “Owned,” “Owner,” “Ownership”
means a person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or
to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct
the voting, with respect to such securities.

 

(ii)
“Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable,
such other person who holds an outstanding Stock Award.

 

(jj)
“Performance Cash Award” means an award of cash granted pursuant to the terms and conditions of
Section 6(c)(ii).

 

    	 

     

    

 

(kk)
“Performance Criteria” means the one or more criteria that the Board will select for purposes of
establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance
Goals may be based on any one of, or combination of, the following as determined by the Board: (i) sales; (ii) revenues; (iii)
assets; (iv) expenses; (v) market penetration or expansion; (vi) earnings from operations; (vii) earnings before or after deduction
for all or any portion of interest, taxes, depreciation, amortization, incentives, service fees or extraordinary or special items,
whether or not on a continuing operations or an aggregate or per share basis; (viii) net income or net income per common share
(basic or diluted); (ix) return on equity, investment, capital or assets; (x) one or more operating ratios; (xi) borrowing levels,
leverage ratios or credit rating; (xii) market share; (xiii) capital expenditures; (xiv) cash flow, free cash flow, cash flow
return on investment, or net cash provided by operations; (xv) stock price, dividends or total stockholder return; (xvi) development
of new technologies or products; (xvii) sales of particular products or services; (xviii) economic value created or added; (xix)
operating margin or profit margin; (xx) customer acquisition or retention; (xxi) raising or refinancing of capital; (xxii) successful
hiring of key individuals; (xxiii) resolution of significant litigation; (xxiv) acquisitions and divestitures (in whole or in
part); (xxv) joint ventures and strategic alliances; (xxvi) spin-offs, split-ups and the like; (xxvii) reorganizations; (xxviii)
recapitalizations, restructurings, financings (issuance of debt or equity) or refinancings; (xxix) or strategic business criteria,
consisting of one or more objectives based on the following goals: achievement of timely development, design management or enrollment,
meeting specified market penetration or value added, payor acceptance, patient adherence, peer reviewed publications, issuance
of new patents, establishment of or securing of licenses to intellectual property, product development or introduction (including,
without limitation, any clinical trial accomplishments, regulatory or other filings, approvals or milestones, discovery of novel
products, maintenance of multiple products in pipeline, product launch or other product development milestones), geographic business
expansion, cost targets, cost reductions or savings, customer satisfaction, operating efficiency, acquisition or retention, employee
satisfaction, information technology, corporate development (including, without limitation, licenses, innovation, research or
establishment of third party collaborations), manufacturing or process development, legal compliance or risk reduction, patent
application or issuance goals, or goals relating to acquisitions, divestitures or other business combinations (in whole or in
part), joint ventures or strategic alliances; and (xxx) other measures of performance selected by the Board.

 

(ll)
“Performance Goals” means, for a Performance Period, the one or more goals established by the Board
for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect
to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance
of one or more comparable companies or the performance of one or more relevant indices. The Board is authorized at any time in
its sole discretion, to adjust or modify the calculation of a Performance Goal for such Performance Period in order to prevent
the dilution or enlargement of the rights of Participants, (a) in the event of, or in anticipation of, any unusual or extraordinary
corporate item, transaction, event or development; (b) in recognition of, or in anticipation of, any other unusual or nonrecurring
events affecting the Company, or the financial statements of the Company in response to, or in anticipation of, changes in applicable
laws, regulations, accounting principles, or business conditions; or (c) in view of the Board’s assessment of the business
strategy of the Company, performance of comparable organizations, economic and business conditions, and any other circumstances
deemed relevant. Specifically, the Board is authorized to make adjustment in the method of calculating attainment of Performance
Goals and objectives for a Performance Period as follows: (i) to exclude the dilutive effects of acquisitions or joint ventures;
(ii) to assume that any business divested by the Company achieved performance objectives at targeted levels during the balance
of a Performance Period following such divestiture; and (iii) to exclude the effect of any change in the outstanding shares of
common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders
other than regular cash dividends. In addition, the Board is authorized to make adjustment in the method of calculating attainment
of Performance Goals and objectives for a Performance Period as follows: (i) to exclude restructuring and/or other nonrecurring
charges; (ii) to exclude exchange rate effects, as applicable, for non-U.S. dollar denominated net sales and operating earnings;
(iii) to exclude the effects of changes to generally accepted accounting standards required by the Financial Accounting Standards
Board; (iv) to exclude the effects of any items that are “unusual” in nature or occur “infrequently” as
determined under generally accepted accounting principles; (v) to exclude the effects to any statutory adjustments to corporate
tax rates; and (vi) to make other appropriate adjustments selected by the Board.

 

    	 

     

    

 

(mm)
“Performance Period” means the period of time selected by the Board over which the attainment of
one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of
a Stock Award or a Performance Cash Award. Performance Periods may be of varying and overlapping duration, at the sole discretion
of the Board.

 

(nn)
“Performance Stock Award” means a Stock Award granted under the terms and conditions of Section
6(c)(i).

 

(oo)
“Plan” means this Eton Pharmaceuticals, Inc. 2018 Equity Incentive Plan.

 

(pp)
“Restricted Stock Award” means an award of shares of Common Stock, which is granted pursuant to
the terms and conditions of Section 6(a).

 

(qq)
“Restricted Stock Award Agreement” means a written agreement between the Company and a holder of
a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement
will be subject to the terms and conditions of the Plan.

 

(rr)
“Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted pursuant
to the terms and conditions of Section 6(b).

 

(ss)
“Restricted Stock Unit Award Agreement” means a written agreement between the Company and a holder
of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock
Unit Award Agreement will be subject to the terms and conditions of the Plan.

 

(tt)
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3,
as in effect from time to time.

 

(uu)
“Securities Act” means the Securities Act of 1933, as amended.

 

(vv)
“Stock Appreciation Right” or “SAR” means a right to receive the appreciation
on Common Stock that is granted pursuant to the terms and conditions of Section 5.

 

(ww)
“Stock Appreciation Right Agreement” means a written agreement between the Company and a holder
of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation
Right Agreement will be subject to the terms and conditions of the Plan.

 

(xx)
“Stock Award” means any right to receive Common Stock granted under the Plan, including an Incentive
Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right,
a Performance Stock Award or any Other Stock Award.

 

(yy)
“Stock Award Agreement” means a written agreement between the Company and a Participant evidencing
the terms and conditions of a Stock Award grant. Each Stock Award Agreement will be subject to the terms and conditions of the
Plan.

 

(zz)
“Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the
outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective
of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited
liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation
in profits or capital contribution) of more than 50%.

 

(aaa)
“Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d)
of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.

 

(bbb)
“Transaction” means a Corporate Transaction or a Change in Control.Document

Exhibit 10.5
			
	EXAGEN INC.

2019 INCENTIVE AWARD PLAN

RESTRICTED STOCK Unit Grant Notice
Exagen Inc., a Delaware corporation (the “Company”), has granted to the participant listed below (“Participant”) the Restricted Stock Units (the “RSUs”) described in this Restricted Stock Unit Grant Notice (this “Grant Notice”), subject to the terms and conditions of the Exagen Inc. 2019 Incentive Award Plan (as amended from time to time, the “Plan”) and the Restricted Stock Unit Agreement attached hereto as Exhibit A (the “Agreement”), both of which are incorporated into this Grant Notice by reference. Capitalized terms not specifically defined in this Grant Notice or the Agreement have the meanings given to them in the Plan.
						
	Participant:	[To be specified]
	Grant Date:	[To be specified]
	Number of RSUs:	[To be specified]
	Vesting Commencement Date:	[To be specified]
	Vesting Schedule:	[To be specified]
		

By accepting (whether in writing, electronically or otherwise) the RSUs, Participant agrees to be bound by the terms of this Grant Notice, the Plan and the Agreement.  Participant has reviewed the Plan, this Grant Notice and the Agreement 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 the Plan, this Grant Notice and the Agreement.  Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.
															
	EXAGEN INC.		PARTICIPANT
	By:			
	Name:			[Participant Name]
	Title:				

Exhibit A

RESTRICTED STOCK UNIT AGREEMENT
Capitalized terms not specifically defined in this Restricted Stock Unit Agreement (this “Agreement”) have the meanings specified in the Grant Notice or, if not defined in the Grant Notice, in the Plan.
ARTICLE I.
GENERAL
1.1    Award of RSUs. The Company has granted the RSUs to Participant effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”).  Each RSU represents the right to receive one Share as set forth in this Agreement.  Participant will have no right to the distribution of any Shares until the time (if ever) the RSUs have vested.
1.2    Incorporation of Terms of Plan. The RSUs are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan will control.
1.3    Unsecured Promise. The RSUs will at all times prior to settlement represent an unsecured Company obligation payable only from the Company’s general assets.
ARTICLE II.
VESTING; FORFEITURE AND SETTLEMENT
2.1    Vesting; Forfeiture. The RSUs will vest according to the vesting schedule in the Grant Notice except that any fraction of an RSU that would otherwise be vested will be accumulated and will vest only when a whole RSU has accumulated.  In the event of Participant’s Termination of Service for any reason, all unvested RSUs will immediately and automatically be cancelled and forfeited, except as otherwise determined by the Administrator or provided in a binding written agreement between Participant and the Company.  
2.2    Settlement.
a)    The RSUs will be paid in Shares as soon as administratively practicable after the vesting of the applicable RSU, but in no event later than March 15 of the year following the year in which the RSU’s vesting date occurs. 
b)    Notwithstanding the foregoing, the Company may delay any payment under this Agreement that the Company reasonably determines would violate Applicable Law until the earliest date the Company reasonably determines the making of the payment will not cause such a violation (in accordance with Treasury Regulation Section 1.409A-2(b)(7)(ii)); provided the Company reasonably believes the delay will not result in the imposition of excise taxes under Section 409A.
ARTICLE III.
TAXATION AND TAX WITHHOLDING
3.1    Representation. Participant represents to the Company that Participant has reviewed with Participant’s own tax advisors the tax consequences of this award of RSUs (the “Award”) and the transactions contemplated by the Grant Notice and this Agreement.  Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.
3.2    Tax Withholding. 
1

a)     Subject to Section 3.2(b), payment of the withholding tax obligations with respect to the Award may be by any of the following, or a combination thereof, as determined by [the Company in its sole discretion / Participant or the Administrator]1:
i)    Cash or check;
ii)    In whole or in part by delivery of Shares, including Shares delivered by attestation and Shares retained from the Award creating the tax obligation, valued at their Fair Market Value on the date of delivery; or
iii)    In whole or in part by the Company withholding of Shares otherwise vesting or issuable under this Award in satisfaction of any applicable withholding tax obligations.  
b)    Unless [the Company / Participant or the Administrator] otherwise determines, and subject to Section 9.10 of the Plan, payment of the withholding tax obligations with respect to the Award shall be by [delivery (including electronically or telephonically to the extent permitted by the Company) of an irrevocable and unconditional undertaking by a broker acceptable to the Company to deliver promptly to the Company sufficient funds to satisfy the applicable tax withholding obligations] / [delivery (including electronically or telephonically to the extent permitted by the Company) by Participant to the Company of a copy of irrevocable and unconditional instructions to a broker acceptable to the Company that Participant has placed a market sell order with such broker with respect to Shares then-issuable upon settlement of the Award, and that the broker has been directed to deliver promptly to the Company funds sufficient to satisfy the applicable tax withholding obligations; provided, that payment of such proceeds is then made to the Company at such time as may be required by the Administrator]2.
c)    Subject to Section 9.5 of the Plan, the applicable tax withholding obligation will be determined based on Participant’s Applicable Withholding Rate.  Participant’s “Applicable Withholding Rate” shall mean (i) if Participant is subject to Section 16 of the Exchange Act, the greater of (A) the minimum applicable statutory tax withholding rate or (B) with Participant’s consent, the maximum individual tax withholding rate permitted under the rules of the applicable taxing authority for tax withholding attributable to the underlying transaction, or (ii) if Participant is not subject to Section 16 of the Exchange Act, the minimum applicable statutory tax withholding rate or such other higher rate approved by the Company; provided, however, that (i) in no event shall Participant’s Applicable Withholding Rate 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); and (ii) the number of Shares tendered or withheld, if applicable, shall be rounded up to the nearest whole Share sufficient to cover the applicable tax withholding obligation, to the extent rounding up to the nearest whole Share does not result in the liability classification of the RSUs under generally accepted accounting principles.
d)    Participant acknowledges that Participant is ultimately liable and responsible for all taxes owed in connection with the RSUs, regardless of any action the Company or any Subsidiary takes with respect to any tax withholding obligations that arise in connection with the RSUs.  Neither the Company nor any Subsidiary makes any representation or undertaking regarding the treatment of any tax withholding in connection with the awarding, vesting or payment of the RSUs or the subsequent sale of Shares.  The Company and its 

1 NTD:  “Participant or the Administrator” for Section 16 individuals.  “The Company” for non-Section 16 individuals.
2 NTD:  Use second bracketed language for Section 16 individuals.
2

Subsidiaries do not commit and are under no obligation to structure the RSUs to reduce or eliminate Participant’s tax liability.
ARTICLE IV.
OTHER PROVISIONS
4.1    Adjustments. Participant acknowledges that the RSUs and the Shares subject to the RSUs  are subject to adjustment, modification and termination in certain events as provided in this Agreement and the Plan.
4.2    Clawback. The Award and the Shares issuable hereunder shall be subject to any clawback or recoupment policy in effect on the Grant Date or as may be adopted or maintained by the Company following the Grant Date, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder.    
4.3    Notices. Any notice to be given under the terms of this Agreement to the Company must be in writing and addressed to the Company in care of the Company’s General Counsel at the Company’s principal office or the General Counsel’s then-current email address or facsimile number.  Any notice to be given under the terms of this Agreement to Participant must be in writing and addressed to Participant (or, if Participant is then deceased, to the Designated Beneficiary) at Participant’s last known mailing address, email address or facsimile number in the Company’s personnel files.  By a notice given pursuant to this Section, either party may designate a different address for notices to be given to that party.  Any notice will be deemed duly given when actually received, when sent by email, when sent by certified mail (return receipt requested) and deposited with postage prepaid in a post office or branch post office regularly maintained by the United States Postal Service, when delivered by a nationally recognized express shipping company or upon receipt of a facsimile transmission confirmation.
4.4    Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.
4.5    Conformity to Securities Laws. Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws and, to the extent Applicable Laws permit, will be deemed amended as necessary to conform to Applicable Laws.
4.6    Successors and Assigns. The Company may assign any of its rights under this Agreement to a single or multiple assignees, and this Agreement will inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer set forth in this Agreement or the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.
4.7    Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the Plan, the Grant Notice, this Agreement and the RSUs will be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule.  To the extent Applicable Laws permit, this Agreement will be deemed amended as necessary to conform to such applicable exemptive rule.
4.8    Entire Agreement; Amendment. The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, 
3

suspended or terminated at any time or from time to time by the Administrator or the Board; provided, however, that except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall materially and adversely affect the RSUs without the prior written consent of Participant. 
4.9    Agreement Severable. In the event that any provision of the Grant Notice or this Agreement is held illegal or invalid, the provision will be severable from, and the illegality or invalidity of the provision will not be construed to have any effect on, the remaining provisions of the Grant Notice or this Agreement.
4.10    Limitation on Participant’s Rights. Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and may not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets. Participant will have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive cash or the Shares as a general unsecured creditor with respect to the RSUs, as and when settled pursuant to the terms of this Agreement.
4.11    Not a Contract of Employment. Nothing in the Plan, the Grant Notice or this Agreement confers upon Participant any right to continue in the employ or service of the Company or any Subsidiary or interferes with or restricts in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and Participant.
4.12    Counterparts. The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which will be deemed an original and all of which together will constitute one instrument.
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4

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