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officersanddirectorsinde

INDEMINFICATION AGREEMENT     This Agreement, made and entered into as of the 10th day of December, 2019 (“Agreement”), among and  between Maiden Holdings, Ltd., a Bermuda company (the “Company”), and the individual listed on the signature page  hereof (the “Indemnitee”);     WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to  indemnify such persons to the fullest extent permitted by applicable law so that he or she will serve or continue to  serve the Company free from undue concern that he will not be so indemnified; and     WHEREAS, Indemnitee is willing to serve, for or on behalf of the Company, on the condition that he be so  indemnified;     NOW THEREFORE, in consideration of the premises and the covenants contained herein, the Company and  Indemnitee to hereby covenant and agree as follows:     SECTION 1. Service by Indemnitee.  Indemnitee agrees to continue to serve as a director and/or officer of  the Company.  Indemnitee may at any time and for any reason resign from such position (subject to any other  contractual obligation or any obligation imposed by operation of law).     SECTION 2. Indemnification – General.  The Company shall indemnify, and advance Expenses (as  hereinafter defined) to Indemnitee as provided by applicable law in effect on the date hereof and to such greater extent  as applicable law may thereafter from time to time permit.  The rights of Indemnitee provided under the preceding  sentence shall include, but shall not be limited to, the rights set forth in the other Sections of this Agreement.     The indemnification provide under this Agreement is in addition to and not in lieu of any other  indemnification provided to Indemnitee by any other agreement or by operation of law.     SECTION 3.  Proceedings Other Than Proceedings by or in the Right of the Company.  Indemnitee shall be  entitled to the rights of indemnification provided in this Section 3 if, by reason of his or her Corporate Status (as  hereinafter defined), he or she is, or is threatened to be made, a party to any threatened, pending, or completed  Proceeding (as hereinafter defined), other than a Proceeding by or in the right of the Company.  Pursuant to this  Section 3, Indemnitee shall be indemnified against Expenses, judgments, penalties, fines and amounts paid in  settlement actually and reasonably incurred by him or her or on his or her behalf in connection with such Proceeding or  any claim, issue or matter therein, if he or she acted in good faith and in a manner he or she reasonably believed to be  in or not opposed to the best interests of the Company, and, with respect to any criminal Proceeding, had no reasonable  cause to believe his or her conduct was unlawful.     SECTION 4. Proceedings by or in the Right of the Company.  Indemnitee shall be entitled to the rights of  indemnification provided in this Section 4 if, by reasons of his or her Corporate Status, he or she is, or is threated to be  made, party to any threatened, pending or completed Proceeding brought by or in the right of the Company to procure  a judgment in its favor.  Pursuant to this Section, Indemnitee shall be indemnified against Expenses actually and  reasonably incurred by him or her or on his or her behalf in connection with such Proceeding if he acted in good faith  and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company.    Notwithstanding the foregoing, no indemnification against such expenses shall be made in respect of any claim, issue  or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company if  applicable law prohibits such indemnification; provided, however, that if applicable law so permits, indemnification  against Expenses shall nevertheless be made by the Company in such event if and only to the extent that the Court in  which such Proceeding shall have been brought or is pending, shall determine.     SECTION 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful.   Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his or her  Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he or she shall be  

 

2    indemnified against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection  therewith.  If Indemnitee is not wholly successful in such Proceeding, but is successful, on the merits or otherwise, as  to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee  against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection with each  successfully resolved claim, issue or matter.  For the purposes of this section and without limitation the termination of  any claim, issue or matter in such a Proceeding by settlement or dismissal, with or without prejudice, shall be deemed  to be a successful result as to such claim, issue or matter.     SECTION 6. Indemnification for Expenses of a Witness.  Notwithstanding any other provision of this  Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding, he shall be  indemnified against all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection  therewith.     SECTION 7. Advancement of Expenses.   The Company shall advance all reasonable Expenses incurred by  or on behalf of Indemnitee in connection with any Proceeding within twenty (20) days after the receipt by the  Company of a statement of statements from Indemnitee requesting such advance or advances from time to time,  whether prior to or after final disposition of such Proceeding.   Such statement or statements shall reasonably evidence  the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on  behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined (pursuant to Section 8 below)  that Indemnitee is not entitled to be indemnified against such Expenses.     SECTION 8. Procedure for Determination of Entitlement to Indemnification.    (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Secretary of the Company  a written request, including therein or therewith such documentation and information as is reasonably  available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is  entitled to indemnification.   The Secretary of the Company shall, promptly upon receipt of such a request  for indemnification, advise the Board of Directors in writing that Indemnitee has requested  indemnification.    (b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 8(a)  hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto  shall be made in the specific case: (i) if a Change in Control (as hereinafter defined) shall have occurred,  by Independent Counsel (as hereinafter defined) unless Indemnitee shall request that such determination  be made by the board of Directors or the stockholders, in which case by the person or persons or in the  manner provided for in clauses (ii) or (iii) of this Section 8(b) in a written opinion to the Board of  Directors, a copy of which shall be delivered to Indemnitee; (ii) if a Change of Control shall not have  occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested  Directors (as hereinafter defined), or (B) if a quorum of the Board of Directors consisting of Disinterested  Directors is not obtainable, or, even if obtainable, such quorum of Disinterested Directors so directs, by  Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to  Indemnitee or (C) by the stockholders of the Company; or (iii) as provided in Section 9(bb) of this  Agreement; and, if it is so determined that Indemnitee is entitled to indemnification, payment to  Indemnitee shall be made within ten (10) days after such determination.     Indemnitee shall cooperate with the person, persons or entity making such determination with respect to  Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable  advance request any documentation or information which he or she is not privileged or otherwise protected from  disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.   Any  costs or expenses (including attorney’s fees and disbursements) incurred by Indemnitee in so cooperating with the  person, persons or entity making such determination shall be borne by the Company (irrespective of the determination  as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee  harmless therefrom.  

 

3      (c) In the event the determination of entitlement to indemnification is to be made by Independent Counsel  pursuant to Section 8(b) hereof, the Independent Counsel shall be selected as provided in this Section 8(c).   If a Change of Control shall not have occurred, the Independent Counsel shall be selected by the Board of  Directors, and the Company shall give written notice to the Indemnitee advising him or her of the identity  of the Independent Counsel so selected.  If a Change of Control shall have occurred, the Independent  Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by  the Board of Directors, in which event the preceding sentence shall apply), and Indemnitee shall give  written notice to the Company advising it of the identity of the Independent Counsel so selected.  In either  event, Indemnitee or the Company, as the case may be, may within seven (7) days after such written notice  of election shall have been given, delivered to the Company or the Indemnitee, as the case may be, a  written objection to such election.  Such objection may be asserted only on the ground that the  Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in  Section 17 of this Agreement, and the objection shall set forth with particularity the factual basis of such  assertion.  If such written objection is made, the Independent Counsel so selected may not serve as  Independent Counsel unless and until a court has determined that such objection is without merit.  If,  within twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant  to Section 8(a) hereof, no Independent Counsel shall have been selected and not objected to, either the  Company or Indemnitee may petition the Supreme Court of the State of New York in New York County  or other court of competent jurisdiction for resolution of any objection which shall been made by the  Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as  Independent Counsel of a person selected by the Court or by such other person as the court shall designate,  and the person with respect to whom an objection is so resolved or the person so appointed shall act as  Independent Counsel under Section 8(b) hereof.  The Company shall pay any and all reasonable fees and  expenses of Independent Counsel incurred by such Independent Counsel in connection with acting  pursuant to Section 8(b) hereof, and the Company shall pay all reasonable fees and expenses incident to  the procedures of his Section 8(c), regardless of the manner in which such Independent Counsel was  selected or appointed.  Upon the due commencement of any judicial proceeding or arbitration pursuant to  Section 19(a)(iii) of this Agreement, Independent Counsel shall be discharged and relieved of any further  responsibility in such capacity (subject to the applicable standards of professional conduct then  prevailing).    SECTION 9. Presumptions and Effect of Certain Proceedings.    (a) If a Change of Control shall have occurred, in making a determination with respect to entitlement  to indemnification hereunder, the person, persons or entity making such determination shall  presume that Indemnitee is entitled to indemnification under this Agreement, if Indemnitee has  submitted a request for indemnification in accordance with Section 8(a) of this Agreement, and the  Company shall have the burden of proof the overcome that presumption in connection with the  making by any person or entity or any determination contrary to that presumption.    (b) If the person or entity empowered or selected under Section 8 of this Agreement to determine  whether Indemnitee is entitled to indemnification shall not have made a determination within sixty  (60) days after receipt by the Company of the request therefor, the requisite determination of  entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled  to such indemnification, absent (i) misstatement by Indemnitee of a material fact, or an omission  of a material fact necessary to make Indemnitee’s statement not materially misleading, in  connection with the request for indemnification, or (ii) a prohibition of such indemnification under  applicable law; provided, however, that such sixty (60) day period may be extended for a  reasonable time, not to exceed an additional thirty (30) days, if the person or entity making the  determination with respect to entitlement to indemnification in good faith requires such additional  time for the obtaining or evaluation of documentation and/or information relating thereto; and  provided further, that the foregoing provisions or this Section 9(b) shall not apply (i) if the  

 

4    determination of entitlement to indemnification is to be made by the stockholders pursuant to  Section 8(b) of this Agreement and (A) within fifteen (15) days after receipt by the Company of  the request for such determination the Board of Directors has resolved to submit such  determination to the stockholders for their consideration an at annual meeting thereof to be held  within seventy (70) days after such receipt and such determination is made thereat, or (B) a special  meeting of stockholders (i) is called within fifteen (15) days after such receipt for the purposes of  making such determination, such meeting is held for such purpose within sixty (60) days after  having been so called and such determination is made thereat, or (ii) if the determination of  entitlement to indemnification is to be made by the Independent Counsel pursuant to Section 8(b)  of this Agreement.    (c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order,  settlement or conviction, or upon a plea of nolo contender or its equivalent, shall not (except as  otherwise expressly provide in this Agreement) of itself adversely affect the right of Indemnitee to  indemnification or create a presumption that Indemnitee did not act in good faith and in a manner  which he reasonably believed to be in or not opposed to the best interests of the Company or, with  respect to any Criminal Proceeding, that Indemnitee had reasonable cause to believe that his  conduct was unlawful.      SECTION 10. Remedies of Indemnitee    (a) In the event that (i) a determination is made pursuant to Section 8 of this Agreement that Indemnitee is  not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made  pursuant to Section 7 of this Agreement, (iii) the determination of entitlement of indemnification is to  be made by Independent Counsel pursuant to Section 8(b) of this Agreement and such determination  shall not have been made and delivered in a written opinion within ninety (90) days after receipt by the  Company of the request for indemnification, or (iv) payment of indemnification is not made pursuant  to Section 6 of this Agreement within ten (10) days after receipt by the Company of a written request  therefore, or (v) payment of indemnification is not made within ten (10) days after a determination has  been made that Indemnitee is entitled to indemnification or such determination is deemed to have been  made pursuant to Section 8 or 9 of this Agreement, Indemnitee shall be entitled to an adjudication in  an appropriate court of the State of New York, or in any other court of competent jurisdiction, of his or  her entitlement to such indemnification or advancement of Expenses.  Alternatively, Indemnitee, at his  or her option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the  rules of the American Arbitration Association.  Indemnitee shall commence such proceeding seeking  an adjudication or an award in arbitration within 180 days following the date on which Indemnitee  first has the right to commence with proceeding pursuant to this Section 10(a).  The Company shall  not oppose Indemnitee’s right to see any such adjudication or award in arbitration.    (b) In the event that a determination shall have been made pursuant to Section 8 of this Agreement that  Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration, commenced  pursuant to this Section 10 shall be conducted in all respects as a de novo trial, or arbitration, on the  merits and Indemnitee shall not be prejudiced by reason of that adverse determination.  If a Change of  Control shall have occurred, in a judicial proceeding or arbitration commenced pursuant to this  Section 10 the Company shall have the burden of proving that Indemnitee is not entitled to  indemnification or advancement of Expenses, as the case may be.    (c) If a determination shall have been made or deemed to have been made pursuant to Section 8 or 9 of his  Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such  determination in any judicial proceeding or arbitration commenced pursuant to this Section 10, absent  (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make  

 

5    Indemnitee’s statement not materially misleading, in connection with the request for indemnification,  or (ii) a prohibition of such indemnification under applicable law.    (d) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced  pursuant to this Section 10 that the procedures and presumptions of this Agreement are not valid,  binding and enforceable and shall stipulate in any such court or before such arbitrator that the  Company is bound by all the provision of this Agreement.    (e) In the vent that the Indemnitee, pursuant to this Section 10, seeks a judicial adjudication of or an  award in arbitration to enforce his or her rights under, or to recover damages for breach of, this  Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the  Company against, any and all expenses (of the types described in the definition of Expense in Section  17 of this Agreement) actually and reasonably incurred by him or her, but only if he prevails therein.   If it shall be determined in said judicial adjudication or arbitration that Indemnitee is entitled to receive  part but not all of the indemnification or advancement of expenses sought, the expenses incurred by  Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated.     SECTION 11. Non-Exclusivity; Survival of Rights; Insurance; Subrogation    (a) The rights of indemnification and to receive advancement of Expenses as provided by the Agreement  shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled  under applicable law, the certificate of Incorporation, the Bylaws, any agreement, a vote of  stockholders or a resolution of directors, or otherwise.  No amendment, alteration or termination of  this Agreement or any provision hereof shall be effective as to any Indemnitee with respect to any  action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration  or termination.    (b) To the extent that the Company maintains an insurance policy or policies providing liability insurance  for directors, officers, employees, agents or fiduciaries of the Company or of any other corporation,  partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at  the request of the  Company Indemnitee shall be covered by such policy or policies in accordance with  its or their terms to the maximum extent of the coverage available for any such director, officer,  employee or agent under such policy or policies.    (c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of  such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and  take all action necessary to secure such rights, including execution of such documents as are necessary  to enable the Company to bring suite to enforce such rights.    (d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise  indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such  payment under any insurance policy, contract, agreement or otherwise.     SECTION 12. Duration of Agreement.  This Agreement shall continue until and terminate upon the later of:  (a) 10 years after the date that Indemnitee shall have ceased to serve as a director and/or office, or (b) the final  termination of all pending Proceedings in respect of which Indemnitee is granted rights of indemnification or  advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 10 of this  Agreement relating thereto.  This Agreement shall be binding upon the Company and its successors and assigns and  shall inure to the benefit of Indemnitee and his heirs, executors and administrators.     SECTION 13. Severability.  If any provision or provisions of this Agreement shall be held to be invalid,  illegal or unenforceable for any reasons whatsoever: (a) the validity, legality and enforceability of the remaining  provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing  

 

6    any such provisions held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall  not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement  ((including, without limitation, each portion of any Section of this Agreement containing any such provision held to be  invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give  effect to the intent manifested by the provision held invalid, illegal or unenforceable.     SECTION 14. Exception to Right of Indemnification or Advancement of Expenses.  Notwithstanding any  other provision of this Agreement, Indemnitee shall not be entitled to indemnification or advancement of Expenses  under this Agreement with respect to any Proceeding, or any claim therein, brought or made by him against the  Company.     SECTION 15. Identical Counterparts.  This Agreement may be executed in one or more counterparts, each of  which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same  Agreement.  Only one such counterpart signed by the party against whom enforceability is sought needs to be  produced to evidence the existence of this Agreement.     SECTION 16. Heading.  The headings of the paragraphs of this Agreement are inserted for convenience only  and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.     SECTION 17. Definitions.  For purposes of this Agreement:    (a) “Change in Control” means a change in control of the Company shall be deemed to have occurred if after  the Effective Date (i) any “person” other than principal shareholders or an affiliate thereof as of the  Effective Date is or becomes the “beneficial owner” directly or indirectly, of securities of the Company  representing 50% or more of the combined voting power of the Company’s then outstanding securities; or  (ii) the Company is a party to a merger, consolidation, sale of assets or other reorganized, as a  consequence of which members of the Board of Directors in office immediately prior to such a transaction  or event constitute less than a majority of the Board of Directors thereafter.     Company in this section 17(a) shall mean Maiden Holdings, Ltd. and any related or affiliated company in  which the Indemnitee is an officer, director or employee.    (b) “Corporate Status” describes the status of a person who is or was a director, officer, employee, agent or  fiduciary of the Company or any other corporation, partnership, joint venture, trust, employee benefit plan  or other enterprise which such person is or was serving at the request of the Company.    (c) “Disinterested Director” means a director of the Company who is not and was not a party to the  Proceeding in respect of which indemnification is sought by Indemnitee.    (d) “Effective Date” means December 10th, 2019.    (e) “Expenses” shall include all reasonable attorney’s fees, retainers, court costs, transcript costs, fees of  experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges,  postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in  connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or  preparing to be a witness in a Proceeding.    (f) “Independent Counsel” means a law firm, or member of a law firm, which is experienced in matters of  corporation law and neither currently is, nor in the past five years has been retained to represent: (i) the  Company in any material matter, or (ii) any other party to the Proceeding giving rise to a claim for  indemnification hereunder.  Notwithstanding the forgoing, the term “Independent Counsel” shall not  include any person who, under the applicable standards of professional conduct then prevailing, would  

 

7    have a conflict of interest in representing either the Company or Indemnitee in an action to determine  Indemnitee’s rights under this agreement.    (g) “Proceeding” includes any action, suit, arbitration, alternative dispute resolution mechanism, investigation,  administrative hearing or any other proceeding whether civil, criminal, administrative or investigative,  except one initiated by an Indemnitee pursuant to Section 10 of this Agreement to enforce his rights under  this Agreement.    SECTION 18.  Modification and Waiver.  No supplement, modification or amendment of this Agreement shall  be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this  Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor  shall such waiver constitute a continuing waiver.     SECTION 19.  Notice by Indemnitee.  Indemnitee agrees as promptly as practicable to notify the Company in  writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other  document relating to any Proceeding or matter which may be subject to indemnification or advancement of  Expenses covered hereunder.     SECTION 20.  Notices.  All notices, requests, demands and other communications hereunder shall be in  writing and shall be deemed to have been duly given if (i) delivered by hand and receipt for by the party to whom  said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with  postage prepaid, on the third business day after the date on which it is so mailed:    (a) If to the Indemnitee, to:    The address of the respective Indemnitee located on the signature page at the end of this Agreement.    (b) If the Company, to:    Ideation House, 1st floor  94 Pitts Bay Road  Hamilton HM 08, Bermuda          

 

8     SECTION 21.  Governing Law.  The parties agree that this Agreement shall be governed by, and construed  and enforced in accordance with, the laws of the State of New York.     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above  written.        ATTEST      Maiden Holdings, Ltd.      By:                 Secretary     [title]                   INDEMNITEE                              Address:prtk-ex106a_493.htm

 

Exhibit 10.6A

PARATEK PHARMACEUTICALS, INC. 2017 INDUCEMENT PLAN, AS AMENDED

ADOPTED: JUNE 15, 2017 AMENDED: OCTOBER 16, 2018

AMENDED: MARCH 9, 2022

 

	
 
	
1.
	
GENERAL.

(a)Eligible Award Recipients. Awards under the Plan may only be granted to an individual not previously an Employee or Director of the Company, or to an individual following a bona fide period of non-employment with the Company, as an inducement material to the individual’s entering into employment with the Company within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules (each such individual, an “Eligible Individual”).

(b)Available Awards. The Plan provides for the grant of the following types of Awards: (i) Nonstatutory Stock Options and (ii) Restricted Stock Unit Awards.

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

	
 
	
2.
	
ADMINISTRATION.

(a)Administration by Board. The Board will administer the Plan.  The Board may delegate administration of the Plan to a Committee or Committees, as provided in Section 2(c). However, the grant of Awards will be approved by the Company’s independent compensation committee or a majority of the Company’s independent directors (as defined in Rule 5605(a)(2) of the NASDAQ Listing Rules) in order to comply with the exemption from the stockholder approval requirement for “inducement grants” provided under Rule 5635(c)(4) of the NASDAQ Listing Rules.

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

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

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

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

 

 

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

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

(vi)To amend the Plan in any respect the Board deems necessary or advisable, provided that the Company will seek stockholder approval of any amendment to the extent required by applicable law or listing requirements, and further provided that, except as provided in the Plan (including Section 2(b)(vii)) or an Award Agreement, no amendment of the Plan will impair a Participant’s rights under an outstanding Award without the Participant’s written consent.

(vii)To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided however, that a Participant’s rights under any Award will not be impaired by any such amendment unless (A) the Company requests the consent of the affected Participant, and (B) such Participant consents in writing. Notwithstanding the foregoing, (a) a Participant’s rights will not be deemed to have been impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights, and (b) subject to the limitations of applicable law, if any, the Board may amend the terms of any one or more Awards without the affected Participant’s consent to bring the Award into compliance with Section 409A of the Code or to comply with other applicable laws or listing requirements.

(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 or Awards.

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

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

 

 

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

(e)Cancellation and Re-Grant of Awards. Neither the Board nor any Committee will have the authority to: (i) reduce the exercise or strike price of any outstanding Option under the Plan, or (ii) cancel any outstanding Option that has an exercise price or strike price greater than the current Fair Market Value of the Common Stock in exchange for cash or other new Awards under the Plan, unless the stockholders of the Company have approved such an action within twelve (12) months prior to such an event.

	
 
	
3.
	
SHARES SUBJECT TO THE PLAN.

(a)Share Reserve. Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Awards from and after the Effective Date (the “Share Reserve”) will not exceed 1,800,000 shares. For clarity, the Share Reserve in this Section 3(a) is a limitation on the number of shares of Common Stock that may be issued under the Plan. Accordingly, this Section 3(a) does not limit the granting of Awards except as provided in Section 7(a). Shares may be issued in connection with a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c) or, if applicable, NYSE Listed Company Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.

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

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

	
 
	
4.
	
ELIGIBILITY.

(a)Eligibility. Awards may only be granted under the Plan to Eligible Individuals.

(b)Approval Requirements. All Awards must be granted either by a majority of the Company’s independent directors or by the Company’s compensation committee comprised of independent directors within the meaning of Rule 5605(a)(2) of the NASDAQ Listing Rules.

 

 

	
 
	
5.
	
PROVISIONS RELATING TO OPTIONS.

Each Option will be in such form and will contain such terms and conditions as the Board deems appropriate. All Options will be Nonstatutory Stock Options. The provisions of separate Options need not be identical; provided, however, that each Option Agreement will conform to (through incorporation of provisions hereof by reference in the applicable Option Agreement or otherwise) the substance of each of the following provisions:

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

(b)Exercise Price. The exercise or strike price of each Option will be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Option may be granted with an exercise or strike price lower than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option if such Option is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section 424(a) of the Code.

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

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

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

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

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

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

 

 

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

(i)Restrictions on Transfer. An Option will not be transferable except by will or by the laws of descent and distribution (and pursuant to Sections 5(d)(ii) and 5(d)(iii) below), and will be exercisable during the lifetime of the Participant only by the Participant. The Board may permit transfer of the Option in a manner that is not prohibited by applicable tax and securities laws. Except as explicitly provided in the Plan, an Option may not be transferred for consideration.

(ii)Domestic Relations Orders. Subject to the approval of the Board or a duly authorized Officer, an Option may be transferred pursuant to the terms of a domestic relations order or official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulations Section 1.421-1(b)(2).

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

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

(f)Termination of Continuous Service. Except as otherwise provided in the applicable Option Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may exercise the Participant’s Option (to the extent that the Participant was entitled to exercise such Option as of the date of termination of Continuous Service) within the 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 Option Agreement), and (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Participant does not exercise the Participant’s Option within the applicable time frame, the Option will terminate.

(g)Extension of Termination Date. Except as otherwise provided in the applicable Option Agreement or other agreement between the Participant and the Company, if the exercise of an Option following the termination of the Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or Disability) would be prohibited at any time 

 

 

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

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

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

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

 

 

(k)Non-Exempt Employees. If an Option is granted to an Eligible Individual who becomes a non-exempt employee of the Company for purposes of the Fair Labor Standards Act of 1938, as amended, the Option will not be first exercisable for any shares of Common Stock until at least six

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

	
 
	
6.
	
PROVISIONS OF RESTRICTED STOCK UNIT AWARDS.

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

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

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

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

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

 

 

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

(vi)Termination of Participant’s Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.

	
 
	
7.
	
COVENANTS OF THE COMPANY.

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

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

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

	
 
	
8.
	
MISCELLANEOUS.

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

(b)Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the papering of the 

 

 

Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.

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

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

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

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

 

 

(g)Withholding Obligations. Unless prohibited by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the 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 Award as a liability for financial accounting purposes); (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) by such other method as may be set forth in the Award Agreement.

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

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

(j)Compliance with Section 409A of the Code. To the extent that the Board determines that any Award granted hereunder is subject to Section 409A of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Award Agreements will be interpreted in accordance with Section 409A of the Code. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded and a Participant holding an Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of any amount will 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 409A of the Code without regard to alternative definitions thereunder) or, if earlier, the date of the Participant’s death.

(k)Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the 

 

 

occurrence of an event constituting Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the Company.

(l)Section 280G. If any payment or benefit (including benefits pursuant to the Plan) that a Participant would receive in connection with a Change in Control from the Company or otherwise (“Transaction Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Company will cause to be determined, before any amounts of the Transaction Payment are paid to a Participant, which of the following two alternative forms of payment would result in the Participant’s receipt, on an after-tax basis, of the greater amount of the Transaction Payment notwithstanding that all or some portion of the Transaction Payment may be subject to the Excise Tax: (a) payment in full of the entire amount of the Transaction Payment (a “Full Payment”), or (b) payment of only a part of the Transaction Payment so that the Participant receives the largest payment possible without the imposition of the Excise Tax (a “Reduced Payment”). For purposes of determining whether to make a Full Payment or a Reduced Payment, the Company will cause to be taken into account all applicable federal, state and local income and employment taxes and the Excise Tax (all computed at the highest applicable marginal rate, net of the maximum reduction in federal income taxes which could be obtained from a deduction of such state and local taxes). If a Reduced Payment is made, (x) the Participant will have no rights to any additional payments and/or benefits constituting the Transaction Payment, and (y) reduction in payments and/or benefits will occur in the manner that results in the greatest economic benefit to the Participant as determined in this Section 8(l). If more than one method of reduction will result in the same economic benefit, the portions of the Transaction Payment will be reduced pro rata. Unless the Participant and the Company otherwise agree in writing, any determination required under this Section 8(l) will be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination will be conclusive and binding upon the Participant and the Company for all purposes. For purposes of making the calculations required by this Section 8(l), the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Participant and the Company will furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this paragraph. The Company will bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 8(l) as well as any costs incurred by the Participant with the Accountants for tax planning under Sections 280G and 4999 of the Code.

	
 
	
9.
	
ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE

EVENTS.

(a)Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), and (ii) the class(es) and number of securities and price per share of stock subject to outstanding Awards. The Board will make such adjustments, and its determination will be final, binding and conclusive.

(b)Dissolution or Liquidation. Except as otherwise provided in the Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Awards (other than Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution 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 Award is providing Continuous Service, provided, however, that the Board may, in its sole discretion, cause some or 

 

 

all Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.

(c)Corporate Transaction. The following provisions will apply to Awards in the event of a Corporate Transaction unless otherwise provided in the Award Agreement or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of an Award. In the event of a Corporate Transaction, then, notwithstanding any other provision of the Plan, the Board may take one or more of the following actions with respect to 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 Award or to substitute a similar stock award for the 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 Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company);

(iii)accelerate the vesting, in whole or in part, of the Award (and, if applicable, the time at which the Award may be exercised) to a date prior to the effective time of such Corporate Transaction as the Board determines (or, if the Board does not determine such a date, to the date that is five (5) days prior to the effective date of the Corporate Transaction), with such Award terminating if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction; provided, however, that the Board may require Participants to complete and deliver to the Company a notice of exercise before the effective date of a Corporate Transaction, which exercise is contingent upon the effectiveness of such Corporate Transaction;

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

(v)cancel or arrange for the cancellation of the Award, to the extent not vested or not exercised prior to the effective time of the Corporate Transaction, in exchange for such cash consideration (including no consideration)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 Award immediately prior to the effective time of the Corporate Transaction, over (B) any exercise price payable by such holder in connection with such exercise. For clarity, this payment may be zero ($0) if the value of the property is equal to or less than the exercise price. Payments under this provision may be delayed to the same extent that payment of consideration to the holders of Common Stock in connection with the Corporate Transaction is delayed as a result of escrows, earn outs, holdbacks or any other contingencies.

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

 

 

(d)Change in Control. The following provisions will apply to Awards in the event of a Change in Control unless otherwise provided in the Award Agreement or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of an Award. If a Change in Control occurs and as of, or within twelve (12) months after, the effective time of such Change in Control a Participant’s Continuous Service terminates due to an involuntary termination (not including death or Disability) without Cause, then, as of the date of the involuntary termination of the Participant’s Continuous Service, the vesting and exercisability (if applicable) of each then outstanding Award held by the Participant shall be accelerated to the extent of fifty percent (50%) of the then unvested portion of each such outstanding Award. As a condition of a Participant’s entitlement to the vesting acceleration described in this Section 9(d), the Participant may be required to execute a release of claims and/or other related termination agreements with the Company.

	
 
	
10.
	
PLAN TERM; EARLIER TERMINATION OR SUSPENSION OF THE PLAN.

(a)Plan Term. The Board may suspend or terminate the Plan at any time. No 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 will not impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant or as otherwise permitted in the Plan.

	
 
	
11.
	
EFFECTIVE DATE OF THE PLAN.

The Plan will become effective on the Effective Date.

	
 
	
12.
	
CHOICE OF LAW.

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

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

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

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

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

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

(e)“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 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, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or 

 

 

any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

(f)“Cause” will have the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) such Participant’s commission of any crime involving fraud, dishonesty or moral turpitude; (ii) such Participant’s attempted commission of or participation in a fraud or act of dishonesty against the Company that results in (or might have reasonably resulted in) material harm to the business of the Company; (iii) such Participant’s intentional, material violation of any contract or agreement between Participant and the Company or any statutory duty Participant owes to the Company; or (iv) such Participant’s conduct that constitutes gross insubordination, incompetence or habitual neglect of duties and that results in (or might have reasonably resulted in) material harm to the business of the Company; provided, however, that the action or conduct described in clauses (iii) and (iv) above will constitute “Cause” only if such action or conduct continues after the Company has provided such Participant with written notice thereof and not less than five business days to cure the same. The determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause will be made by the Company, in its sole discretion. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.

(g)“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 will not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, 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 will be deemed to occur;

 

 

(ii)there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 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 majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member will, for purposes of this Plan, be considered as a member of the Incumbent Board.

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

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

(i)“Committee” means a committee of one (1) or more Directors to whom authority has been delegated by the Board in accordance with Section 2(d) and which is comprised of a majority of the independent directors of the Company within the meaning of Rule 5605(a)(2) of the NASDAQ Listing Rules.

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

(k)“Company” means Paratek Pharmaceuticals, Inc., a Delaware corporation.

(l)“Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. 

 

 

However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of the Company’s securities to such person. Consultants are not eligible to receive Awards under the Plan with respect to their service in such capacity.

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

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

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

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

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

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

(o)“Director” means a member of the Board. Directors are not eligible to receive Awards under the Plan with respect to their service in such capacity.

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

 

 

(q)“Effective Date” means the date this Plan document is approved by the Board.

(r)“Eligible Individual” means an individual not previously an Employee or Director of the Company, or an individual following a bona fide period of non-employment with the Company, within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules.

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

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

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

(v)“Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to an 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.

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

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

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

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

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

 

 

(y)“Nonstatutory Stock Option” means any option granted pursuant to Section 5 that does not qualify as an “incentive stock option” within the meaning of Section 422 of the Code.

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

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

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

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

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

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

(ff) “Plan” means this Paratek Pharmaceuticals, Inc. 2017 Inducement Plan.

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

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

(ii) “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.

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

(kk) “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 will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%).

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