Document:

Exhibit 10.9

 

NEWLINK GENETICS CORPORATION

 

2010 EMPLOYEE STOCK PURCHASE PLAN

 

ADOPTED BY THE BOARD OF
DIRECTORS: OCTOBER 29,  2010

APPROVED BY THE STOCKHOLDERS:
                        ,  2010

 

1.                                      GENERAL.

 

(a)                                  The purpose of
the Plan is to provide a means by which Eligible Employees of the Company and
certain designated Related Corporations may be given an opportunity to purchase
shares of Common Stock.  The Plan is
intended to permit the Company to grant a series of Purchase Rights to Eligible
Employees under an Employee Stock Purchase Plan.

 

(b)                                  The Company, by
means of the Plan, seeks to retain the services of such Employees, to secure
and retain the services of new Employees and to provide incentives for such
persons to exert maximum efforts for the success of the Company and its Related
Corporations.

 

2.                                      ADMINISTRATION.

 

(a)                                  The Board shall
administer the Plan unless and until the Board delegates administration of the
Plan to a Committee or Committees, as provided in Section 2(c).

 

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

 

(i)                                   To determine
how and when Purchase Rights to purchase shares of Common Stock shall be
granted and the provisions of each Offering of such Purchase Rights (which need
not be identical).

 

(ii)                               To designate
from time to time which Related Corporations of the Company shall be eligible
to participate in the Plan.

 

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

 

(iv)                            To settle all
controversies regarding the Plan and Purchase Rights granted under it.

 

(v)                               To suspend or terminate the Plan at any time as provided in Section 12.

 

(vi)                            To amend the
Plan at any time as provided in Section 12.

 

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(vii)                           Generally, to
exercise such powers and to perform such acts as it deems necessary or
expedient to promote the best interests of the Company and its Related
Corporations and to carry out the intent that the Plan be treated as an Employee
Stock Purchase Plan.

 

(viii)                       To adopt such
procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Employees who are foreign nationals or employed
outside the United States.

 

(c)                                  The Board may
delegate some or all of the administration of the Plan to a Committee or
Committees.  If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board that
have been delegated to the Committee, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board.  The Board may 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.  Whether or not the Board has
delegated administration of the Plan to a Committee, the Board shall have the
final power to determine all questions of policy and expediency that may arise
in the administration of the Plan.

 

(d)                                  All
determinations, interpretations and constructions made by the Board in good
faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.

 

3.                                      SHARES
OF COMMON STOCK SUBJECT TO THE PLAN.

 

(a)                                  Subject to the
provisions of Section 11(a) relating to Capitalization Adjustments,
the shares of Common Stock that may be sold pursuant to Purchase Rights shall
not exceed in the aggregate four hundred and fifty thousand (450,000) shares of
Common Stock.

 

(b)                                  If any Purchase
Right granted under the Plan shall for any reason terminate without having been
exercised, the shares of Common Stock not purchased under such Purchase Right
shall again become available for issuance under the Plan.

 

(c)                                  The stock
purchasable under the Plan shall be shares of authorized but unissued or
reacquired Common Stock, including shares repurchased by the Company on the
open market.

 

4.                                      GRANT
OF PURCHASE RIGHTS; OFFERING.

 

(a)                                  The Board may
from time to time grant or provide for the grant of Purchase Rights to purchase
shares of Common Stock under the Plan to Eligible Employees in an Offering
(consisting of one or more Purchase Periods) on an Offering Date or Offering
Dates selected by the Board.  Each
Offering shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate, which shall comply with the requirement of Section 423(b)(5) of
the Code that all Employees granted Purchase Rights shall have the same rights
and privileges.  The terms and conditions
of an Offering shall be incorporated by reference into the Plan and treated as
part of the Plan.  The provisions of
separate Offerings need not be identical, 

 

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but each Offering shall
include (through incorporation of the provisions of this Plan by reference in
the document comprising the Offering or otherwise) the period during which the
Offering shall be effective, which period shall not exceed twenty-seven (27)
months beginning with the Offering Date, and the substance of the provisions
contained in Sections 5 through 8, inclusive.

 

(b)                                  If a
Participant has more than one Purchase Right outstanding under the Plan, unless
he or she otherwise indicates in agreements or notices delivered hereunder: (i) each
agreement or notice delivered by that Participant shall be deemed to apply to
all of his or her Purchase Rights under the Plan, and (ii) a Purchase
Right with a lower exercise price (or an earlier-granted Purchase Right, if
different Purchase Rights have identical exercise prices) shall be exercised to
the fullest possible extent before a Purchase Right with a higher exercise
price (or a later-granted Purchase Right if different Purchase Rights have
identical exercise prices) shall be exercised.

 

(c)                                  The Board shall
have the discretion to structure an Offering so that if the Fair Market Value
of the shares of Common Stock on the first day of a new Purchase Period within
that Offering is less than or equal to the Fair Market Value of the shares of
Common Stock on the Offering Date, then (i) that Offering shall terminate
immediately, and (ii) the Participants in such terminated Offering shall
be automatically enrolled in a new Offering beginning on the first day of such
new Purchase Period.

 

5.                                      ELIGIBILITY.

 

(a)                                  Purchase Rights
may be granted only to Employees of the Company or, as the Board may designate
as provided in Section 2(b), to Employees of a Related Corporation.  Except as provided in Section 5(b), an
Employee shall not be eligible to be granted Purchase Rights under the Plan
unless, on the Offering Date, such Employee has been in the employ of the
Company or the Related Corporation, as the case may be, for such continuous
period preceding such Offering Date as the Board may require, but in no event
shall the required period of continuous employment be greater than two (2) years.  In addition, the Board may provide that no
Employee shall be eligible to be granted Purchase Rights under the Plan unless,
on the Offering Date, such Employee’s customary employment with the Company or
the Related Corporation is more than twenty (20) hours per week and more than
five (5) months per calendar year or such other criteria as the Board may
determine consistent with Section 423 of the Code.

 

(b)                                  The Board may
provide that each person who, during the course of an Offering, first becomes
an Eligible Employee shall, on a date or dates specified in the Offering which
coincides with the day on which such person becomes an Eligible Employee or
which occurs thereafter, receive a Purchase Right under that Offering, which
Purchase Right shall thereafter be deemed to be a part of that Offering.  Such Purchase Right shall have the same
characteristics as any Purchase Rights originally granted under that Offering,
as described herein, except that:

 

(i)                                    the date on
which such Purchase Right is granted shall be the “Offering Date” of such
Purchase Right for all purposes, including determination of the exercise price
of such Purchase Right;

 

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(ii)                                the period of
the Offering with respect to such Purchase Right shall begin on its Offering
Date and end coincident with the end of such Offering; and

 

(iii)                            the Board may
provide that if such person first becomes an Eligible Employee within a
specified period of time before the end of the Offering, he or she shall not
receive any Purchase Right under that Offering.

 

(c)                                  No Employee
shall be eligible for the grant of any Purchase Rights under the Plan if,
immediately after any such Purchase Rights are granted, such Employee owns
stock possessing five percent (5%) or more of the total combined voting power
or value of all classes of stock of the Company or of any Related
Corporation.  For purposes of this Section 5(c),
the rules of Section 424(d) of the Code shall apply in
determining the stock ownership of any Employee, and stock which such Employee
may purchase under all outstanding Purchase Rights and options shall be treated
as stock owned by such Employee.

 

(d)                                  As specified by
Section 423(b)(8) of the Code, an Eligible Employee may be granted
Purchase Rights under the Plan only if such Purchase Rights, together with any
other rights granted under all Employee Stock Purchase Plans of the Company and
any Related Corporations, do not permit such Eligible Employee’s rights to
purchase stock of the Company or any Related Corporation to accrue at a rate
which exceeds twenty five thousand dollars ($25,000) of Fair Market Value of
such stock (determined at the time such rights are granted, and which, with
respect to the Plan, shall be determined as of their respective Offering Dates)
for each calendar year in which such rights are outstanding at any time.

 

(e)                                  Officers of the
Company and any designated Related Corporation, if they are otherwise Eligible
Employees, shall be eligible to participate in Offerings under the Plan.  Notwithstanding the foregoing, the Board may
provide in an Offering that Employees who are highly compensated Employees
within the meaning of Section 423(b)(4)(D) of the Code shall not be
eligible to participate.

 

6.                                      PURCHASE
RIGHTS; PURCHASE PRICE.

 

(a)                                  On each
Offering Date, each Eligible Employee, pursuant to an Offering made under the
Plan, shall be granted a Purchase Right to purchase up to that number of shares
of Common Stock purchasable either with a percentage or with a maximum dollar
amount, as designated by the Board, but in either case not exceeding fifteen percent (15%) of such Employee’s
earnings (as defined by the Board in each Offering) during the period that
begins on the Offering Date (or such later date as the Board determines for a
particular Offering) and ends on the date stated in the Offering, which date
shall be no later than the end of the Offering.

 

(b)                                  The Board shall
establish one (1) or more Purchase Dates during an Offering as of which
Purchase Rights granted pursuant to that Offering shall be exercised and
purchases of shares of Common Stock shall be carried out in accordance with
such Offering.

 

(c)                                  In connection
with each Offering made under the Plan, the Board may specify a maximum number
of shares of Common Stock that may be purchased by any Participant on any
Purchase Date during such Offering.  In
connection with each Offering made under the Plan, the Board may specify a
maximum aggregate number of shares of Common Stock that may be 

 

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purchased by all
Participants pursuant to such Offering. 
In addition, in connection with each Offering that contains more than
one Purchase Date, the Board may specify a maximum aggregate number of shares
of Common Stock that may be purchased by all Participants on any Purchase Date
under the Offering.  If the aggregate
purchase of shares of Common Stock issuable upon exercise of Purchase Rights
granted under the Offering would exceed any such maximum aggregate number,
then, in the absence of any Board action otherwise, a pro rata allocation of
the shares of Common Stock available shall be made in as nearly a uniform
manner as shall be practicable and equitable.

 

(d)                                  The purchase
price of shares of Common Stock acquired pursuant to Purchase Rights shall be
not less than the lesser of:

 

(i)                                    an amount equal
to eighty-five percent (85%) of the Fair Market Value of the shares of Common
Stock on the Offering Date; or

 

(ii)                                an amount equal
to eighty-five percent (85%) of the Fair Market Value of the shares of Common
Stock on the applicable Purchase Date.

 

7.                                      PARTICIPATION;
WITHDRAWAL; TERMINATION.

 

(a)                                  A Participant
may elect to authorize payroll deductions pursuant to an Offering under the
Plan by completing and delivering to the Company, within the time specified in
the Offering, an enrollment form (in such form as the Company may provide).
Each such enrollment form shall authorize an amount of Contributions expressed
as a percentage of the submitting Participant’s earnings (as defined in each
Offering) during the Offering (not to exceed the maximum percentage specified
by the Board). Each Participant’s Contributions shall be credited to a
bookkeeping account for such Participant under the Plan and shall be deposited
with the general funds of the Company except where applicable law requires that
Contributions be deposited with a third party. To the extent provided in the
Offering, a Participant may begin such Contributions after the beginning of the
Offering.  To the extent provided in the
Offering, a Participant may thereafter reduce (including to zero) or increase
his or her Contributions.  To the extent
specifically provided in the Offering, in addition to making Contributions by
payroll deductions, a Participant may make Contributions through the payment by
cash or check prior to each Purchase Date of the Offering.

 

(b)                                  During an
Offering, a Participant may cease making Contributions and withdraw from the Offering
by delivering to the Company a notice of withdrawal in such form as the Company
may provide.  Such withdrawal may be
elected at any time prior to the end of the Offering, except as provided
otherwise in the Offering.  Upon such
withdrawal from the Offering by a Participant, the Company shall distribute to
such Participant all of his or her accumulated Contributions (reduced to the
extent, if any, such Contributions have been used to acquire shares of Common
Stock for the Participant) under the Offering, and such Participant’s Purchase
Right in that Offering shall thereupon terminate.  A Participant’s withdrawal from an Offering
shall have no effect upon such Participant’s eligibility to participate in any
other Offerings under the Plan, but such Participant shall be required to
deliver a new enrollment form in order to participate in subsequent Offerings.

 

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(c)                                  Purchase Rights
granted pursuant to any Offering under the Plan shall terminate immediately upon
a Participant ceasing to be an Employee for any reason or for no reason
(subject to any post-employment participation period required by law) or other
lack of eligibility. The Company shall distribute to such terminated or
otherwise ineligible Employee all of his or her accumulated Contributions
(reduced to the extent, if any, such Contributions have been used to acquire
shares of Common Stock for the terminated or otherwise ineligible Employee)
under the Offering.

 

(d)                                  Purchase Rights
shall not be transferable by a Participant except by will, the laws of descent
and distribution, or by a beneficiary designation as provided in Section 10.  During a Participant’s lifetime, Purchase
Rights shall be exercisable only by such Participant.

 

(e)                                  Unless otherwise
specified in an Offering, the Company shall have no obligation to pay interest
on Contributions.

 

8.                                      EXERCISE
OF PURCHASE RIGHTS.

 

(a)                                  On each
Purchase Date during an Offering, each Participant’s accumulated Contributions
shall be applied to the purchase of shares of Common Stock up to the maximum
number of shares of Common Stock permitted pursuant to the terms of the Plan
and the applicable Offering, at the purchase price specified in the
Offering.  No fractional shares shall be
issued upon the exercise of Purchase Rights unless specifically provided for in
the Offering.

 

(b)                                  If any amount
of accumulated Contributions remains in a Participant’s account after the
purchase of shares of Common Stock and such remaining amount is less than the
amount required to purchase one share of Common Stock on the final Purchase
Date of an Offering, then such remaining amount shall be held in such
Participant’s account for the purchase of shares of Common Stock under the next
Offering under the Plan, unless such Participant withdraws from such next
Offering, as provided in Section 7(b), or is not eligible to participate
in such Offering, as provided in Section 5, in which case such amount
shall be distributed to such Participant after the final Purchase Date, without
interest.  If the amount of Contributions
remaining in a Participant’s account after the purchase of shares of Common
Stock is at least equal to the amount required to purchase one (1) whole
share of Common Stock on the final Purchase Date of the Offering, then such
remaining amount shall be distributed in full to such Participant at the end of
the Offering without interest.

 

(c)                                  No Purchase
Rights may be exercised to any extent unless the shares of Common Stock to be
issued upon such exercise under the Plan are covered by an effective
registration statement pursuant to the Securities Act and the Plan is in
material compliance with all applicable federal, state, foreign and other
securities and other laws applicable to the Plan.  If on a Purchase Date during any Offering
hereunder the shares of Common Stock are not so registered or the Plan is not
in such compliance, no Purchase Rights or any Offering shall be exercised on
such Purchase Date, and the Purchase Date shall be delayed until the shares of
Common Stock are subject to such an effective registration statement and the
Plan is in such compliance, except that the Purchase Date shall not be delayed
more than twelve (12) months and the Purchase Date shall in no event be more
than twenty-seven (27) months from the Offering Date.  If, on the Purchase Date under any Offering
hereunder, as delayed to the 

 

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maximum extent permissible,
the shares of Common Stock are not registered and the Plan is not in such
compliance, no Purchase Rights or any Offering shall be exercised and all
Contributions accumulated during the Offering (reduced to the extent, if any,
such Contributions have been used to acquire shares of Common Stock) shall be
distributed to the Participants without interest.

 

9.                                      COVENANTS
OF THE COMPANY.

 

The Company shall seek to obtain from each federal,
state, foreign or other regulatory commission or agency having jurisdiction
over the Plan such authority as may be required to issue and sell shares of
Common Stock upon exercise of the Purchase Rights.  If, after commercially reasonable efforts,
the Company is unable to obtain from any such regulatory commission or agency
the authority that counsel for the Company deems necessary for the lawful
issuance and sale of Common Stock under the Plan, the Company shall be relieved
from any liability for failure to issue and sell Common Stock upon exercise of
such Purchase Rights unless and until such authority is obtained.

 

10.                               DESIGNATION
OF BENEFICIARY.

 

(a)                                  A Participant
may file a written designation of a beneficiary who is to receive any shares of
Common Stock and/or cash, if any, from the Participant’s account under the Plan
in the event of such Participant’s death subsequent to the end of an Offering
but prior to delivery to the Participant of such shares of Common Stock or
cash.  In addition, a Participant may
file a written designation of a beneficiary who is to receive any cash from the
Participant’s account under the Plan in the event of such Participant’s death
during an Offering.  Any such designation
shall be on a form provided by or otherwise acceptable to the Company.

 

(b)                                  The Participant
may change such designation of beneficiary at any time by written notice to the
Company.  In the event of the death of a
Participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such Participant’s death, the Company shall
deliver such shares of Common Stock and/or cash to the executor or
administrator of the estate of the Participant, or if no such executor or
administrator has been appointed (to the knowledge of the Company), the
Company, in its sole discretion, may deliver such shares of Common Stock and/or
cash to the spouse or to any one or more dependents or relatives of the
Participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.

 

11.                               ADJUSTMENTS
UPON CHANGES IN COMMON STOCK; CORPORATE TRANSACTIONS.

 

(a)                                  In the event of
a Capitalization Adjustment, the Board shall 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 number of
securities subject to, and the purchase price applicable to outstanding
Offerings and Purchase Rights, and (iv) the class(es) and number of
securities imposed by purchase limits under each ongoing Offering.  The Board shall make such adjustments, and
its determination shall be final, binding and conclusive.

 

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(b)                                  In the event of
a Corporate Transaction, then: (i) any surviving corporation or acquiring
corporation (or the surviving or acquiring corporation’s parent company) may
assume or continue Purchase Rights outstanding under the Plan or may substitute
similar rights (including a right to acquire the same consideration paid to the
stockholders in the Corporate Transaction) for those outstanding under the
Plan, or (ii) if any surviving or acquiring corporation (or its parent
company)  does not assume or
continue such Purchase Rights or does not substitute similar rights for Purchase
Rights outstanding under the Plan, then the Participants’ accumulated
Contributions shall be used to purchase shares of Common Stock within ten (10) business
days prior to the Corporate Transaction under any ongoing Offerings, and the
Participants’ Purchase Rights under the ongoing Offerings shall terminate
immediately after such purchase.

 

12.                               AMENDMENT,
TERMINATION OR SUSPENSION OF THE PLAN.

 

(i)                                    The Board may
amend the Plan at any time in any respect the Board deems necessary or
advisable.  However, except as provided
in Section 11(a) relating to Capitalization Adjustments, stockholder
approval shall be required for any amendment of the Plan for which stockholder
approval is required by applicable law or listing requirements, including any
amendment that either (i) materially increases the number of shares of
Common Stock available for issuance under the Plan, (ii) materially
expands the class of individuals eligible to become Participants and receive
Purchase Rights under the Plan, (iii) materially increases the benefits
accruing to Participants under the Plan or materially reduces the price at
which shares of Common Stock may be purchased under the Plan, (iv) materially
extends the term of the Plan, or (v) expands the types of awards available
for issuance under the Plan, but in each of (i) through (v) above
only to the extent stockholder approval is required by applicable law or
listing requirements.

 

(b)                                  The Board may
suspend or terminate the Plan at any time. 
No Purchase Rights may be granted under the Plan while the Plan is
suspended or after it is terminated.

 

(c)                                  Any benefits,
privileges, entitlements and obligations under any outstanding Purchase Rights
granted before an amendment, suspension or termination of the Plan shall not be
impaired by any such amendment, suspension or termination except (i) with
the consent of the person to whom such Purchase Rights were granted, (ii) as
necessary to comply with any laws, listing requirements, or governmental
regulations (including, without limitation, the provisions of Section 423
of the Code and the regulations and other interpretive guidance issued
thereunder relating to Employee Stock Purchase Plans) including without
limitation any such regulations or other guidance that may be issued or amended
after the Effective Date, or (iii) as necessary to obtain or maintain
favorable tax, listing, or regulatory treatment.

 

13.                               EFFECTIVE
DATE OF PLAN.

 

The Plan shall become
effective on the IPO Date, but no Purchase Rights shall be exercised unless and
until the Plan has been approved by the stockholders of the Company, which
approval shall be within twelve (12) months before or after the date the Plan
is adopted by the Board.

 

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14.                               MISCELLANEOUS
PROVISIONS.

 

(a)                                  Proceeds from
the sale of shares of Common Stock pursuant to Purchase Rights shall constitute
general funds of the Company.

 

(b)                                  A Participant
shall not be deemed to be the holder of, or to have any of the rights of a
holder with respect to, shares of Common Stock subject to Purchase Rights
unless and until the Participant’s shares of Common Stock acquired upon
exercise of Purchase Rights are recorded in the books of the Company (or its
transfer agent).

 

(c)                                  The Plan and
Offering do not constitute an employment contract.  Nothing in the Plan or in the Offering shall
in any way alter the at will nature of a Participant’s employment or be deemed
to create in any way whatsoever any obligation on the part of any Participant
to continue in the employ of the Company or a Related Corporation, or on the
part of the Company or a Related Corporation to continue the employment of a
Participant.

 

(d)                                  The provisions
of the Plan shall be governed by the laws of the State of Iowa without resort to that state’s
conflicts of laws rules.

 

15.                               DEFINITIONS.

 

As used in the Plan, the following definitions shall
apply to the capitalized terms indicated below:

 

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

 

(b)                                  “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 Purchase Right after the Effective
Date without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other similar transaction). 
Notwithstanding the foregoing, the conversion of any convertible
securities of the Company shall not be treated as a Capitalization Adjustment.

 

(c)                                  “Code”  means the
Internal Revenue Code of 1986, as amended.

 

(d)                                  “Committee”  means a
committee of one (1) or more members of the Board to whom authority has
been delegated by the Board in accordance with Section 2(c).

 

(e)                                  “Common
Stock” means the common stock of the Company.

 

(f)                                    “Company” means NewLink
Genetics Corporation, a Delaware corporation.

 

(g)                                 “Contributions” means the
payroll deductions and other additional payments specifically provided for in
the Offering, that a Participant contributes to fund the exercise of a Purchase
Right. A Participant may make additional payments into his or her account, if 

 

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specifically provided for in
the Offering, and then only if the Participant has not already had the maximum
permitted amount withheld during the Offering through payroll deductions.

 

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

 

(i)                                    the
consummation of 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)                                the
consummation of a sale or other disposition of at least ninety percent (90%) of the outstanding securities of the Company;

 

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

 

(iv)                               the
consummation of 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.

 

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

 

(j)                                    “Eligible
Employee”  means an Employee who meets
the requirements set forth in the Offering for eligibility to participate in
the Offering, provided that such Employee also meets the requirements for
eligibility to participate set forth in the Plan.

 

(k)                                “Employee”  means any
person, including Officers and Directors, who is employed for purposes of Section 423(b)(4) of
the Code by the Company or a Related Corporation.  However, service solely as a Director, or
payment of a fee for such services, shall not cause a Director to be considered
an “Employee” for purposes of the Plan.

 

(l)                                    “Employee
Stock Purchase Plan”  means a plan that grants
Purchase Rights intended to be options issued under an “employee stock purchase
plan,” as that term is defined in Section 423(b) of the Code.

 

(m)                              “Exchange
Act”  means the Securities Exchange Act of 1934, as
amended.

 

(n)                                 “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 shall be 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 such source as the Board deems
reliable.  Unless otherwise provided by
the Board, if there is no closing sales price for the Common Stock on the date
of determination, then the 

 

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Fair Market Value shall be
the closing selling price (or closing bid if no sales were reported) on the
last preceding date for which such quotation exists.

 

(ii)                                In the absence
of such markets for the Common Stock, the Fair Market Value shall be determined
by the Board in good faith.

 

(iii)                            Notwithstanding
the foregoing, for any Offering that commences on the IPO Date, the Fair Market
Value of the shares of Common Stock at the time when the Offering commences
shall be the price per share at which shares are first sold to the public in
the Company’s initial public offering as specified in the final prospectus for
that initial public offering.

 

(o)                                  “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.

 

(p)                                  “Offering”  means the grant
of Purchase Rights to purchase shares of Common Stock under the Plan to Eligible
Employees.

 

(q)                                  “Offering
Date” means a date selected by the Board for an Offering
to commence.

 

(r)                                  “Officer” means  a
person who is an officer of the Company within the meaning of Section 16
of the Exchange Act and the rules and regulations promulgated thereunder.

 

(s)                                  “Participant”  means an
Eligible Employee who holds an outstanding Purchase Right granted pursuant to
the Plan.

 

(t)                                    “Plan”  means this
NewLink Genetics Corporation 2010 Employee Stock Purchase Plan.

 

(u)                                 “Purchase
Date”  means one or more dates during an Offering
established by the Board on which Purchase Rights shall be exercised and as of
which purchases of shares of Common Stock shall be carried out in accordance
with such Offering.

 

(v)                                   “Purchase
Period” means a period of time specified within an Offering
beginning on the Offering Date or on the next day following a Purchase Date
within an Offering and ending on a Purchase Date.  An Offering may consist of one or more
Purchase Periods.

 

(w)                                “Purchase
Right”  means an option to purchase shares of Common Stock
granted pursuant to the Plan.

 

(x)                                  “Related
Corporation”  means any “parent
corporation” or “subsidiary corporation” of the Company whether now or
subsequently established, as those terms are defined in Sections 424(e) and
(f), respectively, of the Code.

 

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

 

11

 

(z)                                  “Trading Day”  means
any day on which the exchange(s) or market(s) on which shares of
Common Stock are listed, including the Nasdaq Global Select Market, the Nasdaq
Global Market, or the Nasdaq Capital Market, is open for trading.

 

12Exhibit 10.10

 

NEWLINK GENETICS CORPORATION

 

2010 NON-EMPLOYEE DIRECTORS’ STOCK AWARD PLAN

 

ADOPTED BY THE BOARD OF DIRECTORS: OCTOBER 29, 2010

APPROVED BY THE STOCKHOLDERS:                      ,
2010

 

1.                                      GENERAL.

 

(a)                                  Eligible Stock Award Recipients.  The persons eligible to receive Stock Awards
are the Non-Employee Directors of the Company.

 

(b)                                  Available Stock Awards.  The Plan provides for the grant of the
following Stock Awards: (i) Nonstatutory Stock Options, (ii) Stock
Appreciation Rights, (iii) Restricted Stock Awards, (iv) Restricted
Stock Unit Awards, and (v) Other Stock Awards.

 

(c)                                  Purpose.  The Company,
by means of the Plan, seeks to retain the services of its Non-Employee
Directors, to secure and retain the services of new Non-Employee Directors and
to provide incentives for such persons to exert maximum efforts for the success
of the Company and any Affiliate by giving them an opportunity to benefit from
increases in value of the Common Stock through the granting of Stock Awards.

 

2.                                      ADMINISTRATION.

 

(a)                                  Administration
by Board.  The Board
shall administer the Plan unless and until the Board delegates administration
of the Plan to a Committee or Committees, as provided in Section 2(c).

 

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

 

(i)                                    With respect to
Stock Awards issued pursuant to Sections 5(a) and 5(b), to determine the
provisions of each Stock Award to the extent not specified in the Plan.

 

(ii)                                With respect to
Stock Awards issued pursuant to Section 5(d), to determine from time to
time (A) which of the persons eligible under the Plan shall be granted
Stock Awards; (B) when and how each Stock Award shall be granted; (C) what
type or combination of types of Stock Awards shall be granted; (D) the
provisions of each Stock Award granted (which need not be identical), including
the time or times when a person shall be permitted to receive cash or Common
Stock pursuant to a Stock Award; (E) the number of shares of Common Stock
with respect to which a Stock Award shall be granted to each such person; and (F) the
Fair Market Value applicable to a Stock Award.

 

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

 

1

 

(iv)                               To amend the Plan in any
respect the Board deems necessary or advisable, including, without limitation,
by adopting amendments relating to certain nonqualified deferred compensation
under Section 409A of the Code and/or to bring the Plan or Stock Awards
granted under the Plan into compliance therewith, subject to the limitations,
if any, of applicable law. However, except as provided in Section 10(a) relating
to Capitalization Adjustments, to the extent required by applicable law or
listing requirements, stockholder approval shall be required for any amendment
of the Plan that either (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 Stock Awards under the Plan, (C) materially
increases the benefits accruing to Participants under the Plan or materially
reduces the price at which shares of Common Stock may be issued or purchased
under the Plan, (D) materially extends the term of the Plan, or (E) expands
the types of Stock Awards available for issuance under the Plan. Except as
provided above, rights under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (1) the
Company requests the consent of the affected Participant, and (2) such
Participant consents in writing.

 

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

 

(vi)                               To amend the
Plan or a Stock Award as provided in Section 11.

 

(vii)                           To terminate or
suspend the Plan as provided in Section 12.

 

(viii)                       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.

 

(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 shall 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 shall thereafter be to
the Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board.  The Board may 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.

 

2

 

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

 

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

 

3.                                      SHARES
SUBJECT TO THE PLAN.

 

(a)                                  Share
Reserve.  Subject to Section 10(a) relating
to Capitalization Adjustments, the aggregate number of shares of Common Stock
of the Company that may be issued pursuant to Stock Awards after the Effective
Date shall not exceed five hundred thousand (500,000) shares.  For clarity, the limitation in this Section 3(a) is
a limitation in 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 8(a).  Shares may be issued in connection with a
merger or acquisition as permitted by, as applicable, NASDAQ Listing
Rule 5635(c), NYSE Listed Company Manual Section 303A.08, AMEX
Company Guide Section 711 or other applicable stock exchange rules, and
such issuance shall not reduce the number of shares available for issuance
under the Plan.  Furthermore, 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 shall not
reduce (or otherwise offset) the number of shares Common Stock that may be
available for issuance under the Plan.

 

(b)                                  Reversion
of Shares to the Share Reserve.  If any shares
of Common Stock issued pursuant to a Stock Award are forfeited back to the Company
because of the failure to meet a contingency or condition required to vest such
shares in the Participant, then the shares that are forfeited shall revert to
and again become available for issuance under the Plan.  Any shares reacquired, withheld or not issued
by the Company pursuant to Section 9(e) or as consideration for the
exercise of a Stock Award shall again become available for issuance under the
Plan.  For the avoidance of doubt, if an
appreciation distribution in respect of a Stock Appreciation Right is paid in
shares of Common Stock, the number of shares subject to the Stock Award that
are not delivered to the Participant shall remain available for subsequent
issuance under the Plan.

 

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

 

4.                                      ELIGIBILITY.

 

The
Initial and Annual Grants as set forth in Sections 5(a) and 5(b) automatically
shall be granted under the Plan to all Non-Employee Directors who meet the
specified criteria.  Stock Awards may
also be granted to Non-Employee Directors as discretionary grants as set forth
in Section 5(d).

 

3

 

5.                                      NON-DISCRETIONARY
AND DISCRETIONARY GRANTS.

 

(a)                                  Initial
Grants.   Without any further action
of the Board, each person who after the IPO Date is elected or appointed for
the first time to be a Non-Employee Director automatically shall, upon the date
of his or her initial election or appointment to be a Non-Employee Director, be
granted an Option (the “Initial
Grant”) to purchase 25,000 shares of Common Stock on the terms
and conditions set forth herein.

 

(b)                                  Annual
Grants.  Without any further action
of the Board, on the date of each Annual Meeting, commencing with the first
Annual Meeting following the IPO Date, each person who is then a Non-Employee
Director automatically shall be granted an Option (the “Annual Grant”) to
purchase, on the terms and conditions set forth herein:

 

(i)                                    15,000 shares
of Common Stock; plus

 

(ii)                                7,500 shares of
Common Stock for Non-Employee Directors who are serving as the chair of the
Audit, Compensation or Nominating and Corporate Governance Committee, or as
Lead Independent Director on the date of grant; plus

 

(iii)                            5,000 shares of
Common Stock for Non-Employee Directors who are serving (but not as the chair)
on the Audit, Compensation or Nominating and Corporate Governance Committee on
the date of grant.

 

(c)                                  Determination of Initial and Annual Grants.  The Board may, at any time, provide for
Initial and Annual Grants covering a number of shares of Common Stock different
than those numbers designated in Sections 5(a) and 5(b), respectively, and
may provide that some or all of such grants may instead be in any of the forms
of Stock Awards described in Section 7. 
If the Board does not make such a determination, all Initial and Annual
Grants shall be for the number of shares of Common Stock designated in Section 5(a) and
5(b), respectively and in the form of Options described in Section 6.

 

(d)                                  Discretionary
Grants.  In addition to
non-discretionary grants pursuant to Sections 5(a) and 5(b), the Board, in
its sole discretion, may grant Stock Awards to one or more Non-Employee Directors
in such numbers and subject to such other provisions as it shall
determine.  The numbers and other
provisions of such Stock Awards need not be identical.

 

6.                                      PROVISIONS
RELATING TO OPTIONS AND STOCK APPRECIATION RIGHTS.

 

Each Option or SAR shall be in such form and shall
contain such terms and conditions as required by the Plan.  Each Option or SAR shall contain such
additional terms and conditions, not inconsistent with the Plan, as the Board
shall deem appropriate.  Each Option or
SAR shall include (through incorporation of provisions hereof by reference in
the applicable Stock Award Agreement or otherwise) the substance of each of the
following provisions:

 

(a)                                  Term.    No Option or SAR shall be exercisable after
the expiration of ten (10) years from the date of its grant or such
shorter period specified in the Stock Award Agreement.

 

4

 

(b)                                  Exercise
Price.  The exercise price (or strike
price) of each Option or SAR shall be not less than one hundred percent (100%)
of the Fair Market Value of the Common Stock subject to the Option or SAR on
the date the Option or SAR is granted

 

(c)                                  Purchase
Price for Options.  The purchase
price of Common Stock acquired pursuant to the exercise of an Option shall be
paid, to the extent permitted by applicable law, by any combination of the
following methods of payment:

 

(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; or

 

(iv)                               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 shall 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; provided,
further, that 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 reduced 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.

 

(d)                                  Exercise
and Payment of a SAR.  To
exercise any outstanding Stock Appreciation Right, the Participant must provide
written notice of exercise to the Company in compliance with the provisions of
the Stock Appreciation Right Agreement evidencing such Stock Appreciation
Right.  The appreciation distribution
payable on the exercise of a Stock Appreciation Right 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 Stock Appreciation Right) of a number of shares
of Common Stock equal to the number of Common Stock equivalents in which the
Participant is vested under such Stock Appreciation Right, and with respect to
which the Participant is exercising the Stock Appreciation Right on such date,
over (B) the strike price that will be determined by the Board at the time
of grant of the Stock Appreciation Right. 
The appreciation distribution in respect to a Stock Appreciation Right
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
Stock Appreciation Right Agreement evidencing such Stock Appreciation Right.

 

(e)                                  Transferability.   An Option or SAR shall not be transferable
except by will or by the laws of descent and distribution and to such further extent as permitted by the Rule as
to Use of Form S-8 specified in the General Instructions of the Form S-8
Registration Statement 

 

5

 

under the Securities Act, and shall be
exercisable during the lifetime of the Participant only by the
Participant.  Notwithstanding the
foregoing, the Participant may, by delivering written notice to the Company, in
a form satisfactory to the Company, designate a third party who, in the event
of the death of the Participant, shall 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, the executor or administrator of the Participant’s estate
shall be entitled to exercise the Option or SAR and receive the Common Stock or
other consideration resulting from such exercise.

 

(f)                                    Option
Vesting Generally.  Options
shall vest as follows:

 

(i)                                    Initial
Grant.  Twenty percent (20%) of the
shares shall vest on the first anniversary of the date of such Initial Grant
recipient’s election as a Non-Employee Director and the remaining eighty
percent (80%) of the shares shall vest in a series of forty-eight (48)
successive equal monthly installments over the four (4)-year period following
the first anniversary of the date of election, subject to Participant’s
Continuous Service as of each such date.

 

(ii)                                Annual
Grant. Fifty percent (50%) of the shares shall vest on the first anniversary
of the date of grant and the remaining fifty percent (50%) of the shares shall
vest in a series of twelve (12) successive equal monthly installments over the
twelve (12)-month period following the first anniversary of the date of grant,
subject to Participant’s Continuous Service as of each such date; provided, however that at the date of the second Annual
Meeting following the date of grant, the unvested portion of the Annual Grant,
if any, shall become fully vested and exercisable immediately prior to the date
of such Annual Meeting.

 

(iii)                            Discretionary
Grant.  At the time of grant of an
Option pursuant to Section 5(d), the Board may impose such restrictions or
conditions to the vesting of the Options as it, in its sole discretion, deems
appropriate.

 

(g)                                 Termination of Continuous Service.  In the event that a Participant’s Continuous
Service terminates (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 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 three (3) months following the
termination of the Participant’s Continuous Service (or such longer or shorter
period specified in the applicable Stock Award Agreement, which period shall
not be less than 30 days), or (ii) the expiration of the term of the
Option or SAR as set forth in the Stock Award Agreement.  If, after termination of Continuous Service,
the Participant does not exercise his or her Option or SAR within the time
specified herein or in the Stock Award Agreement (as applicable), the Option or
SAR (as applicable) shall terminate.

 

(h)                                 Extension of Termination Date.  In the event that the exercise of an Option
or SAR following the termination of the Participant’s Continuous Service (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 shall terminate
on the earlier of (i) the expiration of a total period of 

 

6

 

three (3) months (that need not be
consecutive) 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, or (ii) the expiration of the term of the
Option or SAR as set forth in the applicable Stock Award Agreement.  In addition, unless otherwise provided in a
Participant’s Stock Award Agreement, if the sale of any Common Stock received
upon exercise of an Option or SAR following the termination of the Participant’s
Continuous Service would violate the Company’s insider trading policy, then the
Option or SAR shall terminate on the earlier of (i) the expiration of a
period 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 the Company’s insider trading
policy, or (ii) the expiration of the term of the Option or SAR as set
forth in the applicable Stock Award Agreement.

 

(i)                                    Disability of Participant.  In the event that 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 (ii) the expiration of the term of the Option or SAR
as set forth in the Stock Award Agreement. 
If, after termination of Continuous Service, the Participant does not
exercise his or her Option or SAR within the time specified herein or in the
Stock Award Agreement (as applicable), the Option or SAR (as applicable) shall
terminate.

 

(j)                                    Death of Participant.  In the event that (i) a Participant’s
Continuous Service terminates as a result of the Participant’s death, or (ii) the
Participant dies within the three (3) month period 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 (ii) the
expiration of the term of such Option or SAR as set forth in the Stock Award
Agreement.  If, after the Participant’s
death, the Option or SAR is not exercised within the time specified herein, the
Option or SAR (as applicable) shall terminate.

 

7.                                      PROVISIONS RELATING TO STOCK AWARDS OTHER THAN OPTIONS AND SARS.

 

(a)                                  Restricted
Stock Awards. Each Restricted Stock Award Agreement shall be in
such form and shall contain such terms and conditions as the Board shall deem
appropriate.  To the extent consistent
with the Company’s Bylaws, at the Board’s election, shares of Common Stock may
be (x) held in book entry form subject to the Company’s instructions until
any restrictions relating to the Restricted Stock Award lapse; or (y) evidenced
by a certificate, which certificate shall 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; provided, however, that each Restricted Stock Award Agreement
shall conform to (through incorporation 

 

7

 

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 services to the Company or an Affiliate,
or (C) any other form of legal consideration (including future services)
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 that
have not vested 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 the Restricted Stock Award Agreement shall be transferable by the
Participant only upon such terms and conditions as are set forth in the
Restricted Stock Award Agreement, as the Board shall 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 shall be in such form and shall contain
such terms and conditions as the Board shall deem 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;
provided, however,  that
each Restricted Stock Unit Award Agreement shall 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.

 

8

 

(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, such portion of the
Restricted Stock Unit Award that has not vested will be forfeited upon the
Participant’s termination of Continuous Service.

 

(c)                                  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 6 and the
preceding provisions of this Section 7. 
Subject to the provisions of the Plan, the Board shall 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.

 

8.                                      COVENANTS
OF THE COMPANY.

 

(a)                                  Availability
of Shares.  During the
terms of the Stock Awards, the Company shall keep available at all times the
number of shares of Common Stock reasonably required to satisfy such Stock
Awards.

 

(b)                                  Securities
Law Compliance.  The Company
shall seek to obtain from each regulatory commission or agency having jurisdiction
over the Plan such authority as may be required to grant Stock Awards and to
issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking shall not require
the Company to register under the Securities Act the Plan, any Stock Award or
any Common Stock issued or issuable pursuant to any such Stock Award.  If, after reasonable efforts, the Company is
unable 

 

9

 

to obtain from any such regulatory commission or
agency the authority that counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell Common Stock upon
exercise of such Stock Awards unless and until such authority is obtained. A
Participant shall not be eligible for the grant of a Stock Award or the
subsequent issuance of Common Stock pursuant to the Stock 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
shall have no duty or obligation to any Participant to advise such holder as to
the time or manner of exercising such Stock Award.  Furthermore, the Company shall have no duty
or obligation to warn or otherwise advise such holder of a pending termination
or expiration of a Stock Award or a possible period in which the Stock Award
may not be exercised.  The Company has no
duty or obligation to minimize the tax consequences of a Stock Award to the
holder of such Stock Award.

 

9.                                      MISCELLANEOUS.

 

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

 

(b)                                  Stockholder
Rights.  No Participant shall 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 such Stock Award unless and until (i) such
Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms, if applicable, and (ii) the issuance of the Common
Stock subject to such Stock Award has been entered into the books and records
of the Company.

 

(c)                                  No
Service Rights.  Nothing in
the Plan, any instrument executed thereunder, or Stock Award granted pursuant
thereto shall confer upon any Participant any right to continue to serve the
Company or an Affiliate as a Non-Employee Director or shall affect the right of
the Company or an Affiliate to terminate 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 in which the Company or the Affiliate is
incorporated, as the case may be.

 

(d)                                  Investment
Assurances.  The Company
may require a Participant, as a condition of exercising or acquiring Common
Stock under any Stock 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 he or she is capable of evaluating, alone or
together with the purchaser representative, the merits and risks of exercising
the Stock Award; and (ii) to give written assurances satisfactory to the
Company stating that the Participant is acquiring Common Stock subject to the
Stock 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, shall 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,

 

10

 

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.

 

(e)                                  Withholding
Obligations.  The
Participant may satisfy any federal, state or local tax withholding obligation
relating to the exercise or acquisition of Common Stock under a Stock Award by
any of the following means (in addition to the Company’s right to withhold from
any compensation paid to the Participant by the Company) or by a combination of
such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares from the shares of Common Stock issued or otherwise
issuable to the Participant as a result of the exercise or acquisition of Common
Stock under the Stock Award; provided, however,
that no shares of Common Stock are withheld with a value exceeding the minimum
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) authorizing the Company to withhold
cash from a Stock Award settled in cash; (iv) authorizing the Company to
withhold payment from any amounts otherwise payable to the Participant; or (v) by
such other method as may be set forth in the Stock Award Agreement.

 

(f)                                    Electronic
Delivery.  Any
reference herein to a “written” agreement or document shall include any
agreement or document delivered electronically or posted on the Company’s
intranet.

 

(g)                                 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 Stock 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
providing services to the Company.  The
Board is authorized to make deferrals of Stock 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.

 

(h)                                 Compliance
with Section 409A.  To
the extent that the Board determines that any Stock Award granted hereunder is
subject to Section 409A of the Code, the Stock Award Agreement evidencing
such Stock Award shall incorporate the terms and conditions necessary to avoid
the consequences specified in Section 409A(a)(1) of the Code.  To the extent applicable, the Plan and Stock
Award Agreements shall be interpreted in accordance with Section 409A of
the Code.  Notwithstanding anything to
the contrary in this Plan (and unless the Stock Award Agreement specifically
provides otherwise), if the Shares are publicly traded and a Participant
holding a Stock 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 shall be made upon a “separation
from service” before a date that is six (6) months following the date of
such Participant’s “separation from service” (as defined in Section 

 

11

 

409A of the Code without regard to alternative
definitions thereunder) or, if earlier, the date of the Participant’s death.

 

10.                               ADJUSTMENTS
UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.

 

(a)                                  Capitalization
Adjustments.  In the
event of a Capitalization Adjustment, the Board shall 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
number of securities for which the nondiscretionary grants of Stock Awards are
made pursuant to Section 5, and (iv) the class(es) and number of
securities and price per share of stock subject to outstanding Stock
Awards.  The Board shall make such
adjustments, and its determination
shall be final, binding and conclusive.

 

(b)                                  Dissolution
or Liquidation.  In the
event of a dissolution or liquidation 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) shall terminate immediately prior to the completion of such
dissolution or liquidation, 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 or liquidation is completed but contingent
on its completion.

 

(c)                                  Corporate Transaction.  In the event of a Corporate Transaction, then,
notwithstanding any other provision of the Plan, the Board shall take one or
more of the following actions with respect to Stock Awards, contingent upon the
closing or completion of the Corporate 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 Corporate 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 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 Corporate
Transaction as the Board shall determine (or, if the Board shall not determine
such a date, to the date that is five (5) days prior to the effective date
of the Corporate Transaction), with such Stock Award terminating if not
exercised (if applicable) at or prior to the effective time of the Corporate
Transaction;

 

12

 

(iv)                               arrange for the
lapse 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 Corporate 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, over (B) any
exercise price payable by such holder in connection with such exercise.

 

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.

 

(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 shall occur.

 

11.                               AMENDMENT
OF THE PLAN AND STOCK AWARDS.

 

(a)                                  Amendment
of Plan.  Subject to the limitations, if
any, of applicable law, the Board, at any time and from time to time, may amend
the Plan.  However, except as provided in
Section 10(a)  relating to Capitalization Adjustments, no amendment
shall be effective unless approved by the stockholders of the Company to the
extent stockholder approval is necessary to satisfy applicable law.

 

(b)                                  Stockholder
Approval.  The Board,
in its sole discretion, may submit any other amendment to the Plan for
stockholder approval.

 

(c)                                  No
Impairment of Rights.  Rights
under any Stock Award granted before amendment of the Plan shall not be impaired
by any amendment of the Plan unless (i) the Company requests the consent
of the affected Participant, and (ii) such Participant consents in
writing.

 

(d)                                  Amendment
of Stock Awards.  The Board,
at any time and from time to time, may amend the terms of any one or more Stock
Awards; provided, however, that
the rights under any Stock Award shall not be impaired by any such amendment
unless (i) the Company requests the consent of the Participant, and (ii) the
Participant consents in writing. 
Notwithstanding the foregoing, subject to the limitations of applicable
law, if any, the Board may amend the terms of any one or more Stock Awards
without the affected Participant’s consent if necessary to bring the Stock
Award into compliance with Section 409A of the Code.

 

13

 

12.                               TERMINATION
OR SUSPENSION OF THE PLAN

 

(a)                                  Plan
Term.  The Board may suspend or
terminate the Plan at any time. No Stock Awards may be granted under the Plan
while the Plan is suspended or after it is terminated.

 

(b)                                  No
Impairment of Rights.  Suspension
or termination of the Plan shall not impair rights and obligations under any
Stock Award granted while the Plan is in effect except with the written consent
of the affected Participant.

 

13.                               EFFECTIVE
DATE OF PLAN.

 

This
Plan shall become effective on the IPO Date, but no Stock Award shall be
exercised (or in the case of a Restricted Stock Award, Restricted Stock Unit
Award, or Other Stock Award shall be granted) unless and until the Plan has
been approved by the stockholders of the Company, which approval shall be
within twelve months before or after the date the Plan is adopted by the Board.

 

14.                               CHOICE
OF LAW.

 

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

 

15.                               DEFINITIONS.  As used in the
Plan, the following definitions shall 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 shall
have the authority to determine the time or times at which “parent” or “subsidiary”
status is determined within the foregoing definition.

 

(b)                                  “Annual Grant” means an Option
granted annually to all Non-Employee Directors who meet the specified criteria
pursuant to Section 5(b).

 

(c)                                  “Annual Meeting” means the first
annual meeting of the stockholders of the Company held each fiscal year at
which the Directors are selected.

 

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

 

(e)                                  “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 Effective
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, 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 No. 123 (revised). 
Notwithstanding the foregoing, the conversion of any convertible
securities of the Company shall not be treated as a Capitalization Adjustment.

 

14

 

(f)                                    “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 fifty percent
(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 shall 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, or (C) 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 shall 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 fifty percent (50%) of the combined outstanding voting power of the
surviving Entity in such merger, consolidation or similar transaction or (B) more
than fifty percent (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;

 

(iii)                            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 shall otherwise occur, except for a liquidation into
a parent corporation;

 

(iv)                               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 fifty
percent (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; or

 

(v)                                   individuals
who, on the date the Plan is adopted by the Board, are members of the Board
(the “Incumbent Board”) cease for
any reason to constitute at least a 

 

15

 

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 shall, for purposes of this Plan, be considered as a member of
the Incumbent Board.

 

Notwithstanding
the foregoing or any other provision of this Plan, (A) the term Change in
Control shall 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 shall supersede the foregoing definition with respect to Stock
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 shall apply.

 

In
the event that a Change in Control affects any Stock Award that is deferred,
then “Change in Control” shall conform to the definition of Change of Control
under Section 409A of the Code, as amended, and the Treasury Department or
Internal Revenue Service Regulations or Guidance issued thereunder.

 

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

 

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

 

(i)                                    “Common Stock” means the common stock
of the Company.

 

(j)                                    “Company” means NewLink Genetics
Corporation, a Delaware corporation.

 

(k)                                “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, shall 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.

 

(l)                                    “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, shall not terminate
a Participant’s Continuous Service; provided, however, 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 shall be considered to have terminated on the
date such Entity ceases to qualify as an 

 

16

 

Affiliate.  To
the extent permitted by law, the Board, in its sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of (i) any
leave of absence approved by the Board, 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 shall be treated as
Continuous Service for purposes of vesting in a Stock 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.

 

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

 

(i)                                    the
consummation of 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)                                the
consummation of a sale or other disposition of at least ninety percent (90%) of the outstanding securities of the
Company;

 

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

 

(iv)                               the
consummation of 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.

 

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

 

(o)                                  “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 which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than twelve (12)
months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the
Code, and shall be determined by the Board on the basis of such medical
evidence as the Board deems warranted under the circumstances.

 

(p)                                  “Effective Date” means
the effective date of this Plan document, as set forth in Section 13.

 

(q)                                  “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, shall not
cause a Director to be considered an “Employee” for purposes of the Plan.

 

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

 

17

 

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

 

(t)                                    “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” shall 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 Effective Date, is the Owner,
directly or indirectly, of securities of the Company representing more than
fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities.

 

(u)                                 “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 shall be 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 shall 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 shall be determined
by the Board in good faith and in a manner that complies with Sections 409A and
422 of the Code.

 

(v)                                   “Initial Grant” means an Option
granted to a Non-Employee Director who meets the specified criteria pursuant to
Section 5(a).

 

(w)                                “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.

 

(x)                                  “Non-Employee Director” means a
Director who is not an Employee.

 

(y)                                  “Nonstatutory Stock Option” means an
Option not intended to qualify as an incentive stock option within the meaning
of Section 422 of the Code and the regulations promulgated thereunder.

 

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

 

18

 

(aa)                            “Option” means a Nonstatutory Stock
Option to purchase shares of Common Stock granted pursuant to Section 6 of
the Plan.

 

(bb)                            “Option Agreement” means a written
agreement between the Company and a Participant evidencing the terms and
conditions of an individual Option grant. 
Each Option Agreement shall be subject to the terms and conditions of
the Plan.

 

(cc)                            “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 7(c).

 

(dd)                            “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 shall be subject
to the terms and conditions of the Plan.

 

(ee)                            “Own,”  “Owned,”  “Owner,”  “Ownership”  A person or Entity shall 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.

 

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

 

(gg)                          “Plan” means this  NewLink
Genetics Corporation 2010 Non-Employee Directors’ Stock Award Plan.

 

(hh)                          “Restricted Stock Award” means an
award of shares of Common Stock which is granted pursuant to the terms and
conditions of Section 7(a).

 

(ii)                                “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 shall be subject to the terms and conditions of the Plan.

 

(jj)                                “Restricted Stock Unit Award”  means a right
to receive shares of Common Stock which is granted pursuant to the terms and
conditions of Section 7(b).

 

(kk)                        “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 shall be subject to the terms and conditions of the Plan.

 

(ll)                                “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.

 

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

 

19

 

(nn)                          “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 6.

 

(oo)                            “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 shall be subject to the terms and conditions of the Plan.

 

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

 

(qq)                            “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 shall be subject to the terms and conditions
of the Plan.

 

(rr)                            “Subsidiary” means, with respect to
the Company, (i) any corporation of which more than fifty percent (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 shall 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 fifty percent (50%).

 

20

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