Document:

Merrion Pharmaceuticals Limited Share Option Plan

 Exhibit 10.1 
 Dated this 8th day of August 2006 
  

 RULES OF THE 
 MERRION PHARMACEUTICALS LIMITED 
 SHARE OPTION PLAN (the “Plan”) 
  

 CONTENT 
  

					
	 1.
	    	 DEFINITIONS AND INTERPRETATION
	  	3
	 2.
	    	 EXTENT OF PLAN
	  	6
	 3.
	    	 ELIGIBILITY FOR PARTICIPATION
	  	6
	 4.
	    	 LIMITATION ON PARTICIPATION
	  	6
	 5.
	    	 LIMITATION ON ISSUE
	  	6
	 6.
	    	 GRANT OF OPTIONS
	  	6
	 7.
	    	 OPTION PRICE
	  	7
	 8.
	    	 VESTING
	  	7
	 9.
	    	 TIME OF EXERCISE OF OPTIONS
	  	7
	 10.
	    	 PLAN SHARES
	  	9
	 11.
	    	 DEATH, RETIREMENT OR DISABILITY
	  	9
	 12.
	    	 TERMINATION OF SERVICE
	  	10
	 13.
	    	 PURCHASE / REDEMPTION OF PLAN SHARES
	  	10
	 14.
	    	 PROCEDURE ON EXERCISE OF OPTIONS
	  	11
	 15.
	    	 VARIATION OF CAPITAL
	  	11
	 16.
	    	 LIQUIDATION
	  	12
	 17.
	    	 ALTERATIONS
	  	12
	 18.
	    	 TERMINATION
	  	13
	 19.
	    	 ADMINISTRATION AND DISPUTES
	  	13
	 20.
	    	 WITHHOLDING OF TAXES
	  	13
	 21.
	    	 LISTING AND OTHER CONDITIONS
	  	14

  

 2 

 RULES 
 OF THE 
 MERRION PHARMACEUTICALS LIMITED 
 SHARE OPTION PLAN (the “Plan”) 
 (Established pursuant to a resolution
of the Company and approved by Shareholders 
 with effect from the Adoption Date) 
  

	1.	DEFINITIONS AND INTERPRETATION 

  

	 	(a)	In the Plan the following expressions bear the following meanings: 

  

			
	“Adoption Date”	  	8 August 2006;
		
	“Bad Leaver”	  	a Participant (i) whose Service Provider status is terminated by the Company by reason of grave misconduct, gross default or wilful neglect in the discharge of his duties to the Company or a
material breach by the Participant of the terms and conditions of his employment or engagement or (ii) a Participant who, following his termination of Service Provider Status for any reason, is in breach of any obligations owed by him to the Company
or restrictions imposed on him by the Company which continue after such termination in accordance with his employment or service contract;
		
	“Auditors”	  	the auditors or independent accountants for the time being of the Company;
		
	“the Board”	  	the Board of Directors of the Company or any duly authorised committee thereof;
		
	“the Company”	  	Merrion Pharmaceuticals Limited registered in Ireland under reference 416298;
		
	“Date of Grant”	  	the date upon which an Option is granted to a Participant;
		
	“Exercise Date”	  	the date upon which the holder of an Option exercises the Option over the Plan Shares;
		
	“Exercise Period”	  	the period specified by the Company as being the period during which the holder of an Option may exercise the Option over the Plan Shares;

  

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	“Good Leaver”	  	a Participant whose Service Provider status terminates other than for one of the reasons set out in Clause 11 and who is not a Bad Leaver;
		
	“Group”	  	the Company and its Subsidiaries;
		
	“Health Reasons”	  	reasons of ill-health which, as certified by a medical practitioner appointed by the Group, and accepted by the Group as compelling a Participant to discontinue or alter the nature of his
occupation;
		
	“IPO”	  	Initial Public Offering;
		
	“Market Value”	  	the price which Plan Shares might reasonably be expected to fetch on a sale in the open market as calculated in accordance with the provisions of section 548 of the Irish Taxes Consolidation
Act, 1997 (as amended from time to time);
		
	“Option”	  	an option granted pursuant to the Plan;
		
	“Option Certificate”	  	a certificate in respect of an Option in such form as the Board shall determine;
		
	“Option Price”	  	the price per Plan Share, set out in the Option Certificate, at which the Plan Share comprised in that Option shall be subscribed for on the Exercise Date;
		
	“Ordinary Shareholders”	  	the persons holding those Shares classed in the Memorandum and Articles of Association of the Company as “Ordinary Shares” in the capital of the Company, other than any persons who
acquired such Ordinary Shares by reason of the conversion of Plan Shares into Ordinary Shares;
		
	“Participant”	  	any person who is for the time being the holder of an Option or of Plan Shares held pursuant to the exercise of an Option;
		
	“Qualifying Service Provider”	  	a Service Provider, excluding any person serving out his notice period pending withdrawal from the service of the Company;

  

 4 

			
	“Plan”	  	the Merrion Pharmaceuticals Limited Share Option Plan consisting of these rules as amended from time to time in accordance with the provisions in that regard herein
contained;
		
	“Plan Shares”	  	Ordinary Shares of €0.01 each in the capital of the Company issuable pursuant to the exercise of Options as determined by the Board and set out in the Participant’s Option
Certificate;
		
	“Service Provider”	  	an employee or a director of or a consultant to the Company or any of its Subsidiaries;
		
	“Shareholders”	  	the holders of the entire issued share capital in the Company for the time being;
		
	“Shares”	  	all shares in the capital of the Company for the time being;
		
	“Subsidiaries”	  	the same meaning as in Section 155 of the Companies Act, 1963, regardless of whether or not incorporated in the Republic of Ireland;
		
	“Vesting Date”	  	the date specified by the Company as being the earliest date upon which the holder of an Option may exercise the Option over the Plan Shares; and
		
	“$” or USD	  	the lawful currency of the United States of America.

  

	1.2	Where the context so admits, any reference in this Plan: 

  

	 	(a)	to the singular number shall be construed as if it referred also to the plural number and vice versa; 

  

	 	(b)	to the masculine gender shall be construed as though it referred also to the feminine gender; 

  

	 	(c)	to a statute or statutory provision shall be construed as if it referred also to that provision as for the time being amended or re-enacted; 

  

	 	(d)	to a Clause or a sub-clause shall be construed as a reference to a sub-clause of that Clause. 

  

	1.3	The clause headings are included only for convenience and shall not affect the construction of the Plan. 

  

	1.4	The Plan shall be governed by and construed in accordance with the laws of Ireland. 

  

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	2.	EXTENT OF PLAN 

 The Plan shall extend to the
Company and its Subsidiaries. 
  

	3.	ELIGIBILITY FOR PARTICIPATION 

  

	 	(a)	The persons eligible to participate in the Plan shall, subject to sub-clause (b) of this Clause, be Qualifying Service Providers of the Company or its Subsidiaries;

  

	 	(b)	No person shall be entitled as of right to participate and the decision as to who shall have the opportunity of participating and the time and extent of his participation shall,
subject to the Plan, be made by the Board at its absolute discretion. 

  

	 	(c)	Participation in the Plan by a Participant is a matter entirely separate from, and shall not affect, his pension rights and terms of employment or holding office, and in particular
(but without limitation) if a Participant shall for any reason cease to be employed or engaged by, or cease to hold office in, the Company or any of its Subsidiaries (as the case may be) or to be entitled to exercise his Option, he shall not be
entitled to any compensation by reference to his rights under the Plan or the benefits capable of being received under the Plan or for any loss or diminution in value of such benefits, which he might otherwise have enjoyed, whether such compensation
is claimed by way of damages for unfair or wrongful dismissal or other breach of contract or by way of compensation for loss of office or otherwise howsoever. 

  

	4.	LIMITATION ON PARTICIPATION 

 No Option may be
exercised later than the seventh anniversary of the Date of Grant of the Option. 
  

	5.	LIMITATION ON ISSUE 

 Subject to adjustment as
provided in Clause 15 below, the aggregate nominal value of Plan Shares that on any particular date are subject to outstanding Options under the Plan and have been issued prior to that date pursuant to the exercise of Options granted under the Plan
shall not exceed the aggregate nominal value of 650,000 Plan Shares in the capital of the Company at the Adoption Date. 
  

	6.	GRANT OF OPTIONS 

  

	 	(a)	Subject to Clause 4 and Clause 5 and sub-clause (b) of this Clause the Board may, at such time as it shall in its absolute discretion decide, grant Options to such Qualifying
Service Providers as may be nominated by it to subscribe at the Option Price for such number of Plan Shares as the Board may specify. 

  

 6 

	 	(b)	As soon as reasonably practicable after the Grant Date of an Option, the Board shall procure the issuance to the Participant of an Option Certificate which shall specify with
respect to the Option:- 

  

	 	(i)	the Grant Date; 

  

	 	(ii)	the number of Plan Shares subject to the Option; 

  

	 	(iii)	the Option Price; 

  

	 	(iv)	the Vesting Date; 

  

	 	(v)	the Exercise Period; and 

  

	 	(vi)	subject as aforesaid, shall be in the form set out in Schedule I to these Rules or such other form as the Board shall from time to time prescribe. 

  

	 	(e)	Each Option shall be personal to the Participant and shall be non-assignable (save in accordance with the provisions of Clause 11 hereof) and shall automatically lapse and cease to
be exercisable if assigned. 

  

	7.	OPTION PRICE 

 The Option Price per Plan Share
subject to each Option shall be such sum as determined by the Board as at the Date of Grant of the Option being not less than the nominal value of a Plan Share. 
  

	8.	VESTING 

 The Board shall have the power to set the
times on or within which an Option shall be exercisable or the events upon which an Option shall be exercisable. 
  

	9.	TIME OF EXERCISE OF OPTIONS 

  

	 	(a)	Options which have vested will be exercisable during the Exercise Period, as specified in the Option Certificate, or earlier at the absolute discretion of the Board or as otherwise
provided in these Rules. 

  

	 	(b)	Subject to Clause 9(e), the Board may at its discretion allow Options which have not yet vested to become exercisable upon the earliest of the following events occurring
(“Exercise Event”) and/or may at its discretion require that all unexercised Options be exercised within 30 days, or earlier at the discretion of the Board, of such event occurring): 

  

	 	(i)	any person (either alone or together with any person acting in concert with him) obtaining Control of the Company within the meaning of section 11 of the Irish Taxes Consolidation
Act, 1997 as a result of purchasing or making a general offer to purchase the Shares; 

  

 7 

	 	(ii)	the sale by the Company of its core business or the sale by the Company of what the Board in its absolute discretion determines to be the substantial core of the Company’s
business. 

  

	 	(c)	If any of the Exercise Events described in Clauses 9(b) (i), (ii) and (iii) above has not occurred, the Board may at any time at its discretion allow Options which have
not yet vested to become exercisable and/or may require that unexercised Options be exercised at a time specified by the Board, and the said time shall be notified to each Qualifying Service Provider at the Date of Grant or such other date as the
Board in its absolute discretion may specify. 

  

	 	(d)	Any Options not exercised under Clauses 9(a), 9(b) and 9(c) above shall lapse upon expiration of the applicable exercise period, except at the discretion of the Board.

  

	 	(e)	No Option may be exercised after the seventh anniversary of the Date of Grant. The Board may in its absolute discretion extend the respective exercise periods referred to in Clauses
9(a), 9(b) and 9(c) either before or after the Date of Grant of an Option. 

  

	 	(f)	In addition to the authority provided to it under Clause 9(a), in connection with the occurrence of an Exercise Event, the Board may, in its sole discretion and without the consent
of the Participants, take one or more of the following actions with respect to Options outstanding under the Plan immediately prior to the effective date of the Exercise Event:- 

  

	 	i.	provide that Options shall be assumed by the acquiring company (or parent thereof); or 

  

	 	ii.	provide that Options shall be replaced with comparable options to purchase Shares of the capital shares of the acquiring company (or parent thereof), the determination as to
comparability to be made in the sole discretion of the Board; or 

  

	 	iii.	in the event that under the terms of the Exercise Event an offer is made to acquire the issued and to be issued Shares for cash, provide that Options shall be cancelled in
consideration for the payment to each Participant of a cash payment per Plan Shares subject to the Option equal to the excess of the price per Plan Shares payable in connection with the Exercise Event over the Option Price payable per Plan Share
subject to the Option, subject to deduction of income taxes and such other deductions as may be required under applicable laws and regulations. 

  

	 	(g)	 Each Option which is assumed in connection with an Exercise Event pursuant to Clause 9(f) shall be appropriately adjusted by the Board to apply to Shares of the

  

 8 

	 	 
acquiring company (or parent thereof), provided, however, that no such adjustment shall result in the aggregate Option Price payable by a Participant under
his Option being increased and that the Auditors shall have confirmed in writing that such adjustment is fair and reasonable. 

  

	10.	PLAN SHARES 

 The Company shall during the period in
which the Plan is in operation keep available sufficient authorised but unissued Plan Shares to satisfy any outstanding Options. 
 The
allotment, issuance and transfer of Plan Shares shall be subject to the Memorandum and the Articles of Association of the Company and to any necessary consents of any government or any other authorities (whether in Ireland or any other jurisdiction)
under any enactments or regulations from time to time in force and the Participant shall do all such things as may be necessary to obtain or obviate the necessity for any such consent. 
 All Plan Shares allotted under Options shall rank pari passu in all respects with the Plan Shares for the time being in issue save as regards any rights
attaching to such Plan Shares by reference to a record date prior to the date of such allotment. 
  

	11.	DEATH, RETIREMENT OR DISABILITY 

  

	11.1	If a Participant ceases to serve as a Service Provider because:- 

  

	 	(i)	he has retired on or after reaching retirement in accordance with his contract of employment (“Retirement”); or 

  

	 	(ii)	of Health Reasons; or 

  

	 	(iii)	of the Participant’s death (“Death”) 

 an
Option held by such Participant, to the extent not exercisable as of the date on which the Participant ceases to be a Service Provider, shall lapse and cease to be exercisable as of such date. To the extent an Option has become exercisable as of
such date, it may be exercised, within the period of one year following such date in the event of Death or the period of three months following cessation by reason of Retirement or Health Reasons. 
 PROVIDED HOWEVER that no Option shall be exercisable or exercised by virtue of this Clause later than the seventh anniversary of the Date of Grant of such
Option and on the expiry of such period the Option shall lapse. On any partial exercise of such an Option the balance of the rights then remaining unexercised under such Option shall immediately lapse. 
 (Where the Option is exercised by personal representatives an office copy of the Probate or Letters of Administration should accompany the form).

  

	11.2	The Board may, in its absolute discretion, extend the exercise period referred to in Clause 11.1 

  

 9 

	12.	TERMINATION OF SERVICE 

 In the event a Participant
ceases to serve as a Service Provider for any other reason than those set out in Clause 11 (and without prejudice to the generality of the foregoing) including but not limited to, by reason of the resignation of the Service Provider or the dismissal
by the Company with or without cause, all Options whether exercisable or not shall lapse within 30 days of the date of such termination. 
 Notwithstanding the foregoing provisions of this Clause 12 and of Clause 11, the Board shall have the authority, exercisable in its sole discretion at any time an Option remains outstanding, to provide that, as of the date the Participant
ceases to be a Service Provider, the vesting of the Option shall accelerate in whole or in part and/or that the Option shall remain exercisable for a specified period after such date and the Option shall thereafter be exercisable in accordance with
the terms and conditions specified by the Board provided, however, that no Option shall be exercisable or exercised later than the seventh anniversary of the Date of Grant of such Option. 
  

	13.	PURCHASE / REDEMPTION OF PLAN SHARES 

 Where an
Option has been exercised by a Participant and the Participant ceases to serve as a Service Provider, the Ordinary Shareholders shall be entitled (but not obliged) to appoint a nominee to purchase some or all of the Plan Shares held by the
Participant in accordance with this Clause 13. Such right may be exercised by the Ordinary Shareholders in accordance with the provisions of the Company’s Articles of Association at any time after the date on which the Participant shall cease
to be a Service Provider but shall in all events lapse upon the occurrence of an IPO, as defined in Clause 9(b). 
  

	13.1 	If an Option has been exercised by a Participant and the Participant subsequently ceases to be a Service Provider by reason of an event set out in Clause 11 then the Plan Shares
issued to the Participant pursuant to the Options exercised by him may be purchased by a nominee appointed by the Ordinary Shareholders at the Market Value of the Plan Shares at such date of purchase. 

  

	13.2 	If a Participant has exercised an Option under this Plan and ceases to be a Service Provider for any other reason than as set out in Clause 11 then the following provisions will
apply: 

  

	13.2.1 	Should the Participant be a Bad Leaver, the Plan Shares then held by the Participant may be purchased by a nominee appointed by the Ordinary Shareholders at the Option Price paid
for those Plan Shares. 

  

 10 

	13.2.2 	Should the Participant be a Good Leaver, the Plan Shares then held by the Participant which were issued in accordance with the grant of options to the Participant may be purchased
by a nominee appointed by the Ordinary Shareholders at the Market Value of such Plan Shares at the date of purchase 

  

	14.	PROCEDURE ON EXERCISE OF OPTIONS 

 Upon the exercise
of an Option in whole or in part, the Participant shall pay the Option Price to the Company and shall deliver a completed and executed Notice of Exercise of Option to the Company which shall as soon as practicable after the receipt thereof issue the
appropriate number of Plan Shares to the Participant and deliver to the Participant any appropriate balance Option Certificate, if appropriate. 
 All Plan Shares allotted under Options shall rank pari passu in all respects with the Plan Shares for the time being in issue save as regards any rights attaching to such Plan Shares by reference to a record date prior to the date of such
allotment. 
  

	15.	VARIATION OF CAPITAL 

  

	 	(a)	In the event of any increase or variation of the Shares capital of the Company by way of capitalisation or rights issue, or sub-division, consolidation or reduction, the Board may
make such adjustments as it considers appropriate under sub-clause (b) below. 

  

	 	(b)	An adjustment made under this sub-clause may be to one or more of the following: 

  

	 	(i)	the number of Plan Shares mentioned in Clause 5 of these rules; 

  

	 	(ii)	the number of Plan Shares comprised in any Option; 

  

	 	(iii)	the Option Price applicable in respect of any Plan Shares comprised in any Option; 

  

	 	(iv)	any other term of any such Option; 

  

	 	(v)	where any Option has been exercised but no Plan Shares have been allotted pursuant to such exercise, the number of Plan Shares which may be so allotted and the Option Price
applicable in respect thereof. 

  

	 	(c)	On the occurrence of any of the events referred to in sub-clause (a) above, other than in the case of a capitalisation issue, no adjustment under sub-clause (b) above
shall be made without the prior confirmation in writing by the Auditors that it is in their opinion fair and reasonable. The Auditors shall be deemed to be acting as experts and not as arbitrators and the Irish Arbitration Acts, 1954 to 1998 shall
not apply. 

  

 11 

	 	(d)	No adjustment shall be made under sub-clause (b) above which would cause the Option Price applicable in respect of any Plan Shares to be issued pursuant to exercise of an
Option to be less than the nominal value of such Plan Shares. 

  

	 	(e)	As soon as reasonably practicable after making any adjustment under sub-clause (b) above, the Board shall give notice in writing thereof to any Participant affected thereby.

  

	 	(f)	Options may be adjusted following variations of the Shares capital of the Company other than those specified in sub-clause (a) above, but only with the prior written consent of
the existing members of the Company. Any such adjustment shall be made in accordance with sub-clauses (a) and (b) above. 

  

	16.	LIQUIDATION 

 In the event of the Company going into
liquidation, all Options shall ipso facto cease to be exercisable and (save to the extent, if at all, that the Board may, prior to such liquidation, in its absolute and uncontrolled discretion otherwise determine) Participants shall not be entitled
to damages or other compensation of any kind. 
  

	17.	ALTERATIONS 

  

	 	(a)	Subject to sub-clause (b) of this Clause, and without prejudice to the rights of the Board pursuant to Clause 16, the Board may vary, amend or revoke any of the provisions of
the Plan in such manner as may be thought fit, provided that: 

  

	 	(i)	the purposes of the Plan shall not be altered; 

  

	 	(ii)	no such variation, amendment or revocation shall increase the aggregate Option Price payable by any Participant under an Option; and 

  

	 	(iii)	no such variation shall contravene the rights of the Shareholders pursuant to the Articles of Association; 

 but so that the foregoing provisos (i) and (ii) shall not be applicable to any variation, amendment or revocation of any of the provisions of
the Plan which is considered necessary or desirable by the Board in the light of professional advice obtained in connection with any proposal whereby the Shares of the Company are to become listed or quoted on any recognised shares exchange or
registered under the Securities Act of 1933, as amended, of the United States of America or to comply with or take account or advantage of the provisions of any proposed or existing legislation or law or any change to such legislation or law or to
obtain or maintain favourable taxation treatment of the Company or any Subsidiary or any existing or future Participant, provided that the Company will seek the approval of the Shareholders for any amendment if such approval is necessary to comply
with all relevant and applicable laws in applicable jurisdictions or any other applicable rules or regulations. 
  

 12 

	 	(b)	As soon as reasonably practicable after any alteration or addition under sub-clause (a) takes effect, the Board shall give notice in writing thereof to all Participants.

  

	18.	TERMINATION 

  

	 	(a)	The Plan will be terminated on the tenth anniversary of the Adoption Date or such earlier date as specified in a resolution of the Board or by ordinary resolution of the Company.

  

	 	(b)	No such termination of the Plan under sub-clause (a) of this Clause shall affect or modify any subsisting rights or obligations of the Participants in respect of any Options
and notwithstanding such termination the Company shall continue to do and perform such acts in accordance with the provisions of the Plan (as amended from time to time) as are necessary for or incidental to the administration and management of
outstanding rights and obligations which arose under or by virtue of the Plan. 

  

	19.	ADMINISTRATION AND DISPUTES 

 The Plan shall be
administered by the Board which may from time to time make and vary such rules and regulations not inconsistent with these rules and establish such procedures for the administration and implementation of the Plan as it thinks fit. The decision of
the Board in any dispute or question concerning the construction or effect of the Plan or any other questions arising in connection with the Plan shall be final and conclusive, subject to the concurrence of the Auditors whenever required under these
Rules. 
  

	20.	WITHHOLDING OF TAXES 

 The Company, shall not be
under any obligation to allot or issue Plan Shares to a Participant under or in connection with this Plan unless and until the Board is satisfied in its absolute discretion that such Participant has made payment to the Company of such sum as is, in
the discretion of the Board, sufficient to settle any liability for any tax and/or social insurance contributions and/or similar imposts which are or would be recoverable from such Participant as a result of the exercise of an Option and in respect
of which the Company or any Subsidiary is liable to account (in any jurisdiction). 
 The Company shall have the right to reduce the number of
Plan Shares otherwise deliverable upon exercise of an Option by an amount that would have a fair value equal to the amount of all national and local taxes required to be withheld, or to deduct the amount of such taxes from any cash payment otherwise
to be made to the Participant, pursuant to the Plan or otherwise. In connection with such withholding, the Company may make such arrangements as are consistent with the Plan as it may deem appropriate. 
  

 13 

	21.	LISTING AND OTHER CONDITIONS 

  

	 	(i)	If the Shares are being listed on a recognised securities exchange, the issuance of any Plan Shares upon exercise of an Option shall be conditional upon such Shares actually being
listed on such exchange. 

  

	 	(ii)	For the purposes of the Plan, an initial offering to the public as set out in Clause 9(b)(i) shall have been effected as of the official closure of a firmly underwritten IPO of the
Ordinary Shares. 

  

	 	(iii)	In the event that the exercisability has arisen in accordance with Clause 9(b)(i) the Company shall have no obligation to issue any Plan Shares unless and until the Shares are so
listed, and the right to exercise any Option shall be suspended until such listing has been effected. Upon the termination of any such period of suspension, any Option affected by such suspension that shall not then have expired or terminated shall
be reinstated as to all Shares that would otherwise have become available during the period of such suspension, but no such suspension shall extend the term of any Option. 

  

 14 

 SCHEDULE 1 
 THE MERRION PHARMACEUTICALS LIMITED 
 SHARE OPTION PLAN 
 OPTION CERTIFICATE 
  

			
	Option Certificate Number:	  	____________________________________
	Name of Participant:	  	____________________________________
	Address of Participant:	  	____________________________________
		  	____________________________________
		
	Date of Grant:	  	[Date of Board Approval of Option]
		
	Maximum Number of Plan Shares:	  	____________________________________
		
	Option Price:	  	____________ per Plan Share
		
	Expiration Date:	  	[Date prior to seventh anniversary of Date of Grant]
		
	Vesting Commencement Date:	  	[TO BE DETERMINED BY BOARD]

 The Option shall become exercisable as set forth below, subject to the provisions of this agreement and the
Participant’s acknowledgement and agreement that any shares purchased upon exercise of the Option are subject to the Company’s repurchase/redemption rights set forth in the Plan: 
  

	(i)	On and after [Date], the Option may be exercised to purchase up to [Number] Option Shares; 

  

	(ii)	On or after the [Date] and each successive month thereafter, the Option may be exercised to purchase up to an additional 2.7778% of the Number of Option Shares;

  

	(iii)	The foregoing provisions shall be interpreted such that on or after [Date] the Option may be exercised to purchase up to 100% of the Number of Option Shares.

 The schedule set forth above is cumulative, so that shares as to which the Option has become exercisable on and after a date indicated by
the schedule may be purchased pursuant to exercise of the Option at any subsequent date prior to termination of the Option. The Option may be exercised at any time and from time to time to purchase up to the number of shares as to which it is then
exercisable. 
 Merrion Pharmaceuticals Limited HEREBY GRANTS to the Participant named above an option to acquire the above number of Plan Shares in the
Company. 
 This Option is granted and exercised subject to and in accordance with the Rules of The Merrion Pharmaceuticals Limited Share Option Plan as they
are amended from time to time. In accordance with Rule 9(e), the Option may not in any event be exercised later than the Expiration Date shown above. 
  

 15 

 The rights attached to the Plan Shares are those attaching to the Ordinary Shares in the Memorandum and Articles of
Association of the Company, subject to the proviso that in the event of an IPO, the Board retains the right to place an absolute restriction on the disposal of: 
  

	 	(i)	Plan Shares acquired prior to an IPO; and/or 

  

	 	(ii)	Plan Shares acquired post an IPO 

 for a period of up to 12 months
following that IPO. 
 A Participant, whether or not a director of any company, shall not be entitled to exercise an option at any time when to do so would
contravene the provisions of the Irish Companies Acts, 1963 – 2005 governing Shares dealings by directors and employees or the provisions of any code of practice governing such dealings which may be adopted by the Company in connection with the
listing by the Company of its Shares on any recognised shares exchange or securities market. 
  

									
	 Present when the Common Seal
 of MERRION
PHARMACEUTICALS LIMITED
 was affixed hereto:
	 		 	
					
	Director	 	  	 		 	Secretary	 	  

  

 16 

 Participant Acknowledgement: 
 I acknowledge receipt of Option Certificate Number ___ ___ and a copy of the Rules of the Merrion Pharmaceuticals Limited Share Option Plan (the “Plan”). I confirm my acceptance of the Option as described in the Option Certificate
and I agree to be bound by the Rules of the Plan. 
  

			
	By:	 	  
		 	Participant Signature

  

					
			
	 Full Name:
	  	  	  	
			
	 Address:
	  	  	  	
			
		  	  	  	
			
		  	  	  	
			
	 Date:
	  	  	  	

  

 17 

 SCHEDULE 2 
 THE MERRION PHARMACEUTICALS LIMITED 
 SHARE OPTION PLAN 
 NOTICE OF EXERCISE OF OPTION 
 To: Company
Secretary, Merrion Pharmaceuticals Limited (print registered address) 
 ___________________________________________________________________________________________________________ 
 ___________________________________________________________________________________________________________ 
 I hereby exercise the option granted
to me on [            ] to purchase up to [            ] Plan Shares in respect of all / part of the Plan Shares over which the
Option may be exercised, and request the allotment or transfer to me of those Plan Shares in accordance with the rules of the Plan and the Memorandum and Articles of Association of the Company. 
 I enclose a cheque made payable to Merrion Pharmaceuticals Limited/_______________ in the sum of €_____ being the aggregate Option Price of such Plan Shares.

  

					
	Names (block letters)	 		 	Signature
			
	   	 		 	   
	Address	 		 	Date
			
	  	 		 	
			
	  	 		 	
			
	  	 		 	

 NOTES: 
  

	1.	This form must be accompanied by payment of the Option Price for the Plan Shares in respect of which the Option is exercised. 

  

	2.	The Option may not be exercised in respect of less than 25% of the Plan Shares subject to the Option. 

  

	3.	The Plan has not been approved by the Irish Revenue Commissioners. 

  

	4.	IMPORTANT. The Company does not undertake to provide you with specific advice on the tax consequences of exercising your Option. Under current Irish tax law, self assessment
provisions apply in settling the tax due on option gains. As such, the onus is on you to pay the income tax due, on the exercise of your options, to the Collector General within 30 days of the date of exercise along with a Form RTSO1. If you are
unsure of the tax liabilities which may arise, you should take appropriate professional advice before exercising your Option. 

 A Participant (whether or not a director) shall not be entitled to exercise an option at any time when to do so would contravene the provisions of the Irish Companies Acts, 1963-2005 or the provisions of any code of practice governing such
dealings which may be adopted by the Company in connection with the listing by the Company of its Shares on any recognised stock exchange or securities market. 
  

 18Service Agreement, dated July 23, 2004, Michael J. McKenna, Ph.D

 Exhibit 10.2 
 Final: 22 July, 2004 
 Subject to Contract/Contract Denied 
 Dated 22 July, 2004 
 MERRION
PHARMACEUTICALS, INC 
 MICHAEL McKENNA 
  

 SERVICE AGREEMENT 
  

 A&L GOODBODY 

International Financial Services Centre 
 North Wall Quay 
 Dublin 1 
  

 1 

 22 July, 2004 
  

	To:	Michael McKenna 

 1611 Dijon Drive 
 Wilmington, NC 28405 
 United States
of America 
 Dear Michael, 
 This letter (hereinafter the
Agreement) sets out the terms of your position as Chief Executive Officer of Merrion Pharmaceuticals, Inc. (the Company): 
  

	1.	Duties 

  

	1.1.	You shall serve the Company and any subsidiary undertakings of the Company and/or any holding company of the Company and/or any subsidiary undertakings of such holding company for
the time being (together the Group) upon and subject to the terms and conditions hereinafter contained until your appointment hereunder is terminated as hereinafter provided. 

  

	2.	Responsibilities 

  

	2.1.	You shall perform the duties and be entitled to exercise the powers which are from time to time assigned to you or vested in you by the Company and its Board of Directors (which may
from time to time include carrying out such duties as the Board of Directors may from time to time direct) whether or not such duties shall be of a nature normally performed by an employee holding your position, but subject to the foregoing you
shall be responsible for overall management and operation of the Company. 

  

	2.2.	Subject as herein provided you shall, unless prevented by illness, devote all of your business time and attention to your duties and to the business of the Group, and shall well and
faithfully serve and use your best endeavours to promote the interests of the Group at all times, and shall not knowingly do, or omit to do, or permit or suffer anything to be done or omitted, to the prejudice, loss or injury of the Group.

  

	3.	Commencement Date 

 The effective date of
commencement of employment is 1 April, 2004. 
  

	4.	Remuneration and financial matters 

  

	4.1.	Your salary will be US$210,000 per annum payable monthly in arrears into your nominated bank account or by cheque, after the deduction of payroll and other lawful or authorised
deductions. 

  

	4.2.	The Company will pay 75% of the premium of a life insurance policy (reasonably approved by the Board of Directors) for three times your base salary. 

  

	4.3.	The Company will pay 75% of the premium for long term disability insurance (reasonably approved by the Board of Directors) which provides a benefit to you of 60% of your base
salary. 

  

	4.4.	In the event that you require family coverage for health insurance, the Company will pay 75% of the premium cost for family coverage for health insurance on terms reasonably
acceptable to the Board of Directors, or, if you elect not to obtain health insurance through the Company, the Company will reimburse you for health insurance coverage up to the equivalent of the 75% premium cost for family coverage under the
Company’s plan. 

  

	4.5.	The Company intends to either a 401k or SEP retirement plan to allow for pre-tax contributions for retirement. 

  

 2 

	4.6.	This salary will be reviewed annually by the Board of Directors of the Company. Any increase in salary will not affect the remainder of the terms of this Agreement which shall
remain in full force and effect notwithstanding such increase. 

  

	4.7.	The Company may in its discretion pay you such bonus or bonuses as the Board of Directors or any duly appointed remuneration committee established by the Board of Directors
(Remuneration Committee) may from time to time in its absolute discretion determine. 

  

	4.8.	The Company intends to establish a share option scheme on such terms, subject to such qualification requirements and to such levels as the Remuneration Committee or Board of
Directors may determine and give you an entitlement to partake in that on similar terms to other employees. 

  

	4.9.	In addition to the foregoing, as of the date of this Agreement you will be entitled to subscribe at par for and purchase shares of common stock of the Company representing 6% of the
issued stock of the Company on a fully diluted basis, as more fully set out in the terms of a restricted stock agreement containing terms consistent with this Agreement and otherwise acceptable to you and the Company. The number of shares of
restricted stock subject to purchase by you will be measured based on the amounts of issued stock (on a fully diluted basis) following the proposed Series B fundraising by the Company in which it is to raise at least US$12,000,000. The restricted
stock will vest as follows: 20% of the restricted stock will vest on the closing of the Series A Fundraising, and 80% of the restricted stock will vest annually on the anniversary of this agreement in equal amounts over the next four years, or on an
accelerated basis upon achievement of certain milestones to be established by you and the Company in consultation with the Remuneration Committee and set forth in the restricted stock agreement. The restricted stock agreement shall contain a
“change of control” provision providing for accelerated vesting of all shares of unvested restricted stock immediately upon the happening of a change of control with respect to the Company. The term “fully diluted” means treating
any equity securities which are not stock but which are convertible into or exchangeable for or otherwise represent rights to subscribe for or otherwise acquire stock as the requisite number of stock for this purpose and the term equity securities
shall include, without limitation, for these purposes stock, shares and any warrants, options or other rights to acquire stock or any other equity security and debt security convertible into stock or any other equity security.

  

	4.10.	All expenses properly incurred in the performance of your duties hereunder and properly vouched shall be reimbursed by the Company. International travel is to be by business class
(or equivalent) subject to you using all reasonable endeavours to reduce the cost to the Company. 

  

	4.11.	Without prejudice to any other terms of this Agreement, your entitlements under clause 4.9 are subject to your not being in breach of any of the terms of this Agreement as at the
date of exercise. 

  

	4.12.	You acknowledge that the Group intends to put in place “key man” insurance relating to you for the benefit of the Group and you agree to submit to such examinations and
take such other acts or measures as the Company may reasonably require in connection therewith. 

  

	5.	Location 

 Your usual place of work will be at our
North Carolina offices. However, the Company reserves the right, and by this contract you hereby agree, to carry out your work at such location as the Company may reasonably require, from time to time. 
  

	6.	Hours 

 You will be expected to work appropriate
hours in order to fully carry out your responsibilities, this may include evening or weekend work where necessary. 
  

	7.	Annual Leave 

 You will be entitled to 25 days annual leave together with all statutory holidays. The Company’s holiday year commences on January 1st. 
  

 3 

	8.	No Obligation to Provide Work 

 During the
continuance of your employment hereunder (including, but not limited to, any period after notice of termination has been served by either party) there shall be no obligation on the Company to require you to work or perform any duties or services for
the Company or to provide you with any work and if the Company gives written notice to you requiring you not to work or to perform any duties or services for any given period, then during such period you shall not, without prejudice to the other
terms of this Agreement, be entitled to attend at or have access to the offices or documents of the Company or take up any other position of employment or remuneration (save any previously approved by the Board of Directors) provided however that
you will continue to be entitled to receive your full remuneration and other benefits in accordance with the terms hereof. 
  

	9.	Confidentiality 

  

	9.1.	You shall not, except as authorised in writing by the Company or required by your duties, utilise for your own purposes or divulge, publish or reveal to any person, persons, firm or
body corporate whatsoever (except to the extent required by law or any competent authority or demonstrably is or becomes publicly known other than through breach by you) any of the trade secrets, secret or confidential operations, processes or
dealings or any confidential and proprietary information concerning the organisation, business, finances, customers, inventions, transactions or affairs of the Company or any member of the Group which may come to your knowledge during your
employment hereunder. This restriction shall continue to apply after the termination of this Agreement without limit in point of time. 

  

	9.2.	You shall not during the continuance of this Agreement make otherwise than for the benefit of the Company any notes or memoranda relating to any matter within the scope of the
business of the Company or the Group or concerning any of its dealings or affairs nor shall you either during the continuance of this Agreement use or permit to be used any such notes or memoranda otherwise than for the benefit of the Company, it
being acknowledged that all such notes or memoranda made by you shall be the property of the Company. 

  

	10.	Protective Covenants 

  

	10.1.	You hereby agree that you will not, during the period of your employment hereunder and, in the event that you voluntarily terminate employment with the Company for a period of six
months after such voluntary termination, directly on your own account, or on behalf of, or in conjunction with, directly or indirectly, any other person, firm or company: 

  

	 	(i)	canvass, or solicit business (in relation to the Relevant Business at the date of termination of your employment hereunder and during a period of twelve months prior thereto) from
any customer of the Group who is a customer of the Group as at the date of termination of your employment or from any customer of the Group with whom you had any business dealings at any time prior to the termination of your employment;

  

	 	(ii)	canvass or solicit any person who is an employee of the Group at or after the date of termination of this employment, to leave the employment of the Group; 

 

	 	(iii)	be engaged in competition with the business of the Group as carried on by the Group during your employment hereunder or at the date of termination of your employment hereunder,
whether on your own account or in partnership or as employee, director or manager for any other person. 

  

	10.2.	“Relevant Business” means the business of drug delivery and formulation technologies together with the carrying on or undertaking of such other business trade or activity
ancillary thereto and in connection therewith as the Board may deem appropriate and which the Group is undertaking or carrying on at the date of termination of your employment hereunder or during a period of twelve months prior thereto.

  

	10.3.	Nothing in this clause 10 will prevent you from holding shares or debentures quoted on a recognised investments exchange or any registered unit thereof comprising less than 3% of
the voting shares of any company or body. 

  

	11.	Intellectual Property Rights 

  

	11.1.	 Any document, memorandum, discovery, invention, process or improvement in procedure (Discovery) made or discovered by you (whether alone or jointly with
others) while in the employment of the 

  

 4 

	 	 
Company shall forthwith be disclosed to the Company and shall belong to and be the absolute property of the Company or such Group company as the Company may
nominate for the purpose. You shall, if and whenever required so to do (whether during or after the termination of your employment hereunder), at the expense of the Company apply for or join in applying for letters patent or other equivalent
protection in the USA, Ireland and/or any other part of the world for any such discovery, invention, process or improvement as aforesaid and execute and do all instruments and things necessary for vesting the said letters patent, copyright or other
equivalent protection when obtained and all right, title and interest to and in the same in the Company (or its nominee) absolutely from the moment of their creation and as sole beneficial owner or in such other person as may be required.

  

	11.2.	For the avoidance of doubt and without prejudice to the entitlements of the Company hereunder or otherwise, it is hereby agreed and acknowledged that all rights and interests in the
nature of copyright, trade mark rights and all other rights of an intellectual property nature created by you in pursuance of your duties hereunder shall belong to and be the exclusive property of the Company absolutely from the moment of their
creation and you hereby agree to issue such confirmations and enter into such other documents as the Company may request and you hereby irrevocably (and by way of security for your obligations hereunder) appoint the Company to be your attorney in
your name and on your behalf to execute and do any such instruments or things and generally to use your name for the purpose of giving to the Company the full benefit of the provisions of this clause. 

  

	12.	Severance Clause 

 Without prejudice to the
generality of any clause, you hereby acknowledge and agree that each of the covenants in clauses 9, 10 and 11 of this Agreement constitute entirely separate and independent restrictions on you (notwithstanding that they may be contained in the same
clause, sub-clause, paragraph, sub-paragraph, sentence or phrase) and that they are independent, separate and severable and enforceable accordingly and that the duration, extent and application of each of such covenants is no greater than is
reasonable and necessary for the protection of the legitimate interests of the Company but that if any such restriction shall be adjudged by any court of competent jurisdiction to be void or unenforceable but would be valid if part of the wording
thereof was deleted and/or the period thereof was reduced and/or the geographical area dealt with thereby was reduced the said restriction shall apply within the jurisdiction of that court with such modifications as may be necessary to make it
valid, effective and enforceable and shall be deemed to have been amended accordingly so that such provision or provisions shall be construed by such court by limiting and reducing it or them so as to be enforceable to the maximum extent compatible
with the applicable law as it shall then apply. 
  

	13.	Summary Termination 

  

	13.1.	The Company may terminate your employment hereunder with immediate effect without compensation (such termination to be without prejudice to any other rights or remedies of the
Company in respect of any breach of this Agreement) if you shall at any time: 

  

	 	(i)	commit any material breach of your duties or obligations under or pursuant to this Agreement, or in cases where such breach is capable of remedy, fail to remedy the same within
fourteen days of being called upon to do so by the Company; 

  

	 	(ii)	wilfully neglect or fail properly to discharge any of your duties under or pursuant to this Agreement or wilfully neglect or fail to comply with any lawful orders or directions
given to you by the Company; 

  

	 	(iii)	be guilty of dishonesty or any grave misconduct in the discharge of your duties hereunder or be convicted of a crime (other than an offence under the road traffic legislation for
the time being in force for which a penalty of imprisonment is not enforced); or 

  

	 	(iv)	be absent or unable through illness or injury or other incapacity whatsoever to efficiently and properly discharge in full your duties hereunder for a consecutive period of one
hundred and eighty days in any twelve month period. 

  

	13.2.	In the event of perceived misconduct, the Company will be entitled to suspend forthwith your employment for a period of up to 3 months in order to consider and investigate the
allegation and decide what action or procedure it would be appropriate to adopt. Remuneration shall be paid to you during any such suspension where approved by the Board. 

  

 5 

	14.	Term and Termination by Notice 

 Your employment
shall be deemed to commence on the date set out in clause 3 and shall continue until terminated in accordance with the terms of this agreement. Your employment may be terminated by the Company at will, without any prior notice and without cause
provided that if your employment is terminated without cause (with “cause” being as set out in clause [13.1] above). You will be entitled to a payment equal to six months salary at your then current rate on condition that you sign a
general release, in a form satisfactory to the Company, of all claims that you may have against the Company or the Group. Any such payments will be made to you at the same time as you would have received salary payments if you had remained as an
employee. You may terminate your employment by giving the Company at least 6 months prior written notice. 
  

	15.	Consequences of Termination 

  

	15.1.	On termination of the Agreement the Company shall forthwith pay to you all accrued and unpaid remuneration, fees and expenses properly due under the terms of this Agreement.

  

	15.2.	Upon the termination of this Agreement howsoever: 

  

	 	(i)	you shall immediately deliver up to the Company all correspondence, documents, memoranda, papers, computer disks and all other media of electronic storage, writing, credit cards,
keys, mobile telephones and other property of the Company which may be in your possession or under your control by reason of this Agreement and shall not retain any copies thereof; 

  

	 	(ii)	you shall not hold yourself out, or represent, to any third party that you have the authority or ostensible authority to represent or to make any commitment on behalf of, or to
contractually bind, the Company or the Group. 

 The termination of this Agreement shall not affect such of the provisions hereof as are
expressed to operate or have effect or as are capable of having effect thereafter and shall be without prejudice to any right of action already accrued to either party in respect of any breach of this Agreement by the other party. 
  

	16.	Severability 

 In the event that any of these terms,
conditions or provisions, or any part thereof, shall be determined to be invalid, unlawful or unenforceable, such term, condition or provision, or any part thereof, shall be severed from the remaining terms, conditions and provisions which shall
continue to be valid to the fullest extent permitted by law. 
  

	17.	Waiver 

 A waiver by either party or any breach of
the other party of any of the terms of this Agreement or the acquiescence of such party in any act (whether of commission or omission) which but for such acquiescence would be a breach as aforesaid shall not constitute a general waiver of such term
or of any subsequent act contrary thereto. 
  

	18.	Independent Advice 

 You acknowledge that you have
been given the opportunity to obtain independent advice as to the meaning and effect of this Agreement. 
  

	19.	Law 

 This Agreement shall be governed by the laws
of the State of North Carolina and disputes arising under or about it shall be subject to the exclusive jurisdiction of the Courts of North Carolina. 
 I
should be glad if you would kindly sign the attached copy of this letter and return same to me to confirm your agreement to accept employment subject to the above terms and conditions. 
  

	
	Yours sincerely
	
	/s/ Michael Donnelly
	 for and on behalf of
 MERRION PHARMACEUTICALS,
INC

  

 6 

 ACCEPTANCE 
 I have read, understood and confirm that I accept employment with Merrion Pharmaceuticals, Inc., subject to the above terms and conditions. 
  

			
		
	Signed:	 	/s/ Michael McKenna
	Date:	 	22 July 2004

  

 7

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