UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): March 14, 2016
ARNO THERAPEUTICS, INC.
(Exact name of registrant as specified in
its charter)
Delaware
(State or other jurisdiction of incorporation)
| 000-52153 |
52-2286452 |
| (Commission File Number) |
(IRS Employer Identification No.) |
200 Route 31 North, Suite 104
Flemington, NJ 08822
(Address of principal executive offices
and Zip Code)
(862) 703-7170
(Registrant’s telephone number, including
area code)
Not Applicable
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement
communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Item 5.02. | Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On March 14, 2016, the Board of Directors
(the “Board”) of Arno Therapeutics, Inc. (the “Company”) adopted the Company’s 2016 Equity Incentive Plan
(the “2016 Plan”). The principal provisions of the 2016 Plan are summarized below. This summary is not a complete description
of all the 2016 Plan’s provisions, and is qualified in its entirety by reference to the 2016 Plan, which is attached as Exhibit
10.1 hereto and is incorporated by reference herein. The 2016 Plan replaces the Company’s 2005 Stock Option Plan, which will expire
March 31, 2016, and no further awards will be made pursuant to such plan. Capitalized terms used but not defined herein will be
as defined in the 2016 Plan.
Administration
The Board will initially be the administrator
of the 2016 Plan, but the Board may delegate the administration of the 2016 Plan to the Company’s Compensation Committee.
The Board and any Committee to which it may delegate the administration of the 2016 Plan are collectively referred to in the 2016
Plan as the “Administrator.”
The Administrator may delegate to one or
more Committees and/or sub-Committees, or to one or more officers of the Company and/or its Affiliates, or to one or more agents
and/or advisors, such administrative duties or powers as it may deem advisable. The Administrator or any Committees or individuals
to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render advice with respect to any
responsibility of the Administrator or such Committees or individuals may have under the 2016 Plan. The Administrator may, by resolution,
authorize one or more officers of the Company to do one or both of the following on the same basis as the Administrator: (i) designate
employees to be recipients of awards under the 2016 Plan and (ii) determine the size of any such awards; provided, however, that
the Committee may not delegate such responsibilities to any such officer for awards granted to an employee who is an officer or
director of the Company or the beneficial owner of more than 10% of the Company’s common stock; the resolution providing
such authorization sets forth the total number of awards such officer(s) may grant; and the officer(s) must report periodically
to the Administrator regarding the nature and scope of the awards granted pursuant to the authority delegated.
Except as otherwise provided in the 2016
Plan, the Administrator will have all of the powers vested in it under the provisions of the 2016 Plan, including but not limited
to exclusive authority to determine, in its sole discretion, whether an award will be granted; the individuals to whom, and the
time or times at which, awards will be granted; the number of shares subject to each award; the exercise price of Options granted
hereunder; and the performance criteria, if any, and any other terms and conditions of each award. The Administrator will have
full power and authority to administer and interpret the 2016 Plan, to make and amend rules, regulations and guidelines for administering
the 2016 Plan, to prescribe the form and conditions of the respective Agreements evidencing each award (which may vary from Participant
to Participant), to amend or revise Agreements evidencing any award (to the extent the amended terms would be permitted by the
2016 Plan and provided that no such revision or amendment, except as is authorized in Section 15 of the 2016 Plan, may impair the
terms and conditions of any award that is outstanding on the date of such revision or amendment to the material detriment of the
Participant in the absence of the consent of the Participant), and to make all other determinations necessary or advisable for
the administration of the 2016 Plan (including to correct any defect, omission or inconsistency in the 2016 Plan or any Agreement,
to the extent permitted by law and the 2016 Plan). The Administrator’s interpretation of the 2016 Plan, and all actions taken
and determinations made by the Administrator pursuant to the power vested in it under the 2016 Plan will be conclusive and binding
on all parties concerned.
Eligibility
Any employee, director, or consultant may
participate in the 2016 Plan; provided, however, that only employees are eligible to receive incentive stock options. Additionally,
the Company may grant certain performance-based awards to “covered employees” in compliance with Section 162(m) of
the Internal Revenue Code. These covered employees include our executive officers. Section 162(m) generally limits the corporate
tax deduction for compensation paid to executive officers that is not “performance-based” to $1,000,000 per executive
officer. “Performance-based” compensation meeting certain requirements is not counted against the $1,000,000 limit
and generally remains fully deductible for tax purposes.
Shares Available for Awards
The stock to be awarded or optioned under
the Plan (the “share authorization”) will consist of authorized but unissued or reacquired shares of common stock.
The maximum aggregate number of shares of common stock reserved and available for awards under the 2016 Plan is 9,000,000 shares;
provided, that all shares of stock reserved and available under the 2016 Plan will constitute the maximum aggregate number of shares
of stock that may be issued through incentive stock options.
The following shares of common stock will
not reduce the share authorization and will continue to be reserved and available for awards granted pursuant to the 2016 Plan:
(i) all or any portion of any outstanding restricted stock award or restricted stock unit that expires or is forfeited for any
reason, or that is terminated prior to the vesting or lapsing of the risks of forfeiture on such award, and (ii) shares of common
stock covered by an award to the extent the award is settled in cash; provided, however, that the full number of shares of common
stock subject to a stock appreciation right will reduce the share authorization, whether such stock appreciation right is settled
in cash or shares of common stock. Any shares of common stock withheld to satisfy tax withholding obligations on an award, shares
of common stock withheld to pay the exercise price of an option, and shares of common stock subject to a broker-assisted cashless
exercise of an option will reduce the share authorization.
No person may be granted options, stock
appreciation rights, restricted stock awards, restricted stock units or performance awards under the 2016 Plan for more than 2,000,000
shares of common stock in any calendar year.
The Administrator will adjust the number
of shares and share limit described above in the case of a stock dividend, recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-off, repurchase or exchange of shares, or other similar corporate transaction where
such an adjustment is necessary to prevent dilution or enlargement of the benefits available under the 2016 Plan. Any adjustment
determination made by the Administrator will be final, binding and conclusive.
Type of Awards and Terms and Conditions
The 2016 Stock Plan provides that the Administrator
may grant awards to eligible participants in any of the following forms, subject to such terms, conditions and provisions as the
Administrator may determine to be necessary or desirable:
| · | stock options, including both incentive stock options (“ISOs”)
and non-qualified stock options; |
| · | stock appreciation rights; |
| · | restricted stock units; and |
Options. Options may either be incentive
stock options, which are specifically designated as such for purposes of compliance with Section 422 of the Internal Revenue Code,
or non-qualified stock options. Options vest as determined by the Administrator, subject to applicable performance objectives and
statutory limitations regarding the maximum term of ISOs and the maximum value of ISOs that may vest in one year. The exercise
price of each share subject to an ISO will be equal to or greater than the fair market value of a share on the date of the grant
of the ISO, except in the case of an ISO grant to a stockholder who owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or its parent or any subsidiary, the exercise price will be equal to or greater than
110% of the fair market value of a share on the grant date. Non-qualified stock options vest as determined by the Administrator,
subject to applicable performance objectives and statutory limitations regarding the maximum term of non-qualified stock options.
The exercise price of each share subject to a non-qualified stock option will be determined by the Administrator at the time of
grant but must be equal to or greater than the fair market value of a share on the date of grant. Recipients of options have no
rights as stockholders with respect to any shares covered by the award until the award is exercised and a stock certificate or
book entry evidencing such shares is issued or made, respectively.
Restricted Stock Awards. Restricted
stock awards consist of shares granted to a participant that are subject to one or more risks of forfeiture. Restricted stock awards
may be subject to risk of forfeiture based on the passage of time or the satisfaction of other criteria, such as continued employment
or Company performance. Recipients of restricted stock awards are entitled to vote and receive dividends attributable to the shares
underlying the awards beginning on the grant date, but have no other rights as stockholders with respect to such shares.
Restricted Stock Units. Restricted
stock units consist of a right to receive shares (or cash, in the Administrator’s discretion) on one or more vesting dates
in the future. The vesting dates may be based on the passage of time or the satisfaction of other criteria, such as continued employment
or Company performance. Recipients of restricted stock units have no rights as stockholders with respect to any shares covered
by the awards until the date a stock certificate or book entry evidencing such shares is issued or made, respectively.
Performance Awards. Performance awards,
which may be denominated in cash or shares, are earned upon achievement of performance objectives during a performance period established
by the Administrator. Recipients of performance awards have no rights as stockholders with respect to any shares covered by the
awards until the date a stock certificate or book entry evidencing such shares is issued or made, respectively.
Stock Appreciation Rights. A stock
appreciation right may be granted independent of, or in tandem with, a previously or contemporaneously granted stock option, as
determined by the Administrator. Generally, upon exercise of a stock appreciation right, the recipient will receive cash, shares
of Company stock, or a combination of cash and stock, with a value equal to the excess of: (i) the fair market value of a specified
number of shares of Company stock on the date of the exercise, over (ii) a specified exercise price. Stock appreciation rights
vest as determined by the Administrator, subject to applicable performance objectives and statutory limitations regarding the maximum
term of stock appreciation rights. Recipients of stock appreciation rights have no rights as a stockholder with respect to any
shares covered by the award until the date a stock certificate or book entry evidencing such shares is issued or made, respectively.
Performance-Based Compensation. For
any Awards that are intended to qualify as “performance-based compensation” under Code Section 162(m), the Performance
Objectives shall be limited to any one, or a combination of the following criteria: (1) earnings (including earnings per share
and net earnings); (2) earnings before interest, taxes and depreciation; (3) earnings before interest, taxes, depreciation and
amortization; (4) earnings before interest, taxes, depreciation, amortization and legal settlements; (5) earnings before interest,
taxes, depreciation, amortization, legal settlements and other income (expense); (6) earnings before interest, taxes, depreciation,
amortization, legal settlements, other income (expense) and stock-based compensation; (7) earnings before interest, taxes, depreciation,
amortization, legal settlements, other income (expense), stock-based compensation and changes in deferred revenue; (8) total stockholder
return; (9) return on equity or average stockholder’s equity; (10) return on assets, investment, or capital employed; (11)
stock price; (12) margin (including gross margin); (13) income (before or after taxes); (14) operating income; (15) operating income
after taxes; (16) pre-tax profit; (17) operating cash flow; (18) sales or revenue targets; (19) increases in revenue or product
revenue; (20) expenses and cost reduction goals; (21) improvement in or attainment of working capital levels; (22) economic value
added (or an equivalent metric); (23) market share; (24) cash flow; (25) cash flow per share; (26) share price performance; (27)
debt reduction; (28) implementation or completion of projects or processes; (29) employee retention; (30) stockholders’ equity;
(31) capital expenditures; (32) debt levels; (33) operating profit or net operating profit; (34) workforce diversity; (35) growth
of net income or operating income; (36) billings; (37) bookings; (38) initiation or completion of phases of clinical trials and/or
studies by specified dates; (39) patient enrollment rates; (40) budget management; (41) regulatory body approval with respect to
products, studies and/or trials; and (42) commercial launch of products
Amendments of the 2016 Plan
The Board may from time to time, insofar
as permitted by law, suspend or discontinue the 2016 Plan or revise or amend it in any respect. However, to the extent required
by applicable law or regulation or as except as provided under the 2016 Plan itself, the Board may not, without stockholder approval,
revise or amend the 2016 Plan to (i) materially increase the number of shares subject to the 2016 Plan, (ii) change the designation
of participants, including the class of employees, eligible to receive awards, (iii) decrease the price at which options or stock
appreciation rights may be granted, (iv) cancel, regrant, repurchase for cash, or replace options or stock appreciation rights
that have an exercise price in excess of the fair market value of the common stock with other awards, or amend the terms of outstanding
options or stock appreciation rights to reduce their exercise price, (v) materially increase the benefits accruing to participants
under the 2016 Plan, or (vi) make any modification that will cause incentive stock options to fail to meet the requirements of
Internal Revenue Code Section 422.
Term
The Administrator may grant awards pursuant
to the 2016 Plan until it is discontinued or terminated; provided, however, that ISOs may not be granted after March 13, 2026.
Change of Control
Unless otherwise provided in the terms of
an award, upon a change of control of the Company, as defined in the 2016 Plan, the Administrator may provide for one or more of
the following: (i) the acceleration of the exercisability, vesting, or lapse of the risks of forfeiture of any or all awards (or
portions thereof); (ii) the complete termination of the 2016 Plan and the cancellation of any or all awards (or portions thereof)
that have not been exercised, have not vested, or remain subject to risks of forfeiture, as applicable in each case as of the effective
date of the change of control; (iii) that the entity succeeding the Company by reason of such change of control, or the parent
of such entity, must assume or continue any or all awards (or portions thereof) outstanding immediately prior to the change of
control or substitute for any or all such awards (or portions thereof) a substantially equivalent award with respect to the securities
of such successor entity, as determined in accordance with applicable laws and regulations; or (iv) that participants holding outstanding
awards will become entitled to receive, with respect to each share of common stock subject to such award (whether vested or unvested,
as determined by the Administrator pursuant to the 2016 Plan) as of the effective date of any such change of control, cash in an
amount equal to (1) for participants holding options or stock appreciation rights, the excess of the fair market value of such
common stock on the date immediately preceding the effective date of such change of control over the exercise price per share of
options or stock appreciation rights, or (2) for participants holding awards other than options or stock appreciation rights, the
fair market value of such common stock on the date immediately preceding the effective date of such change of control. The Administrator
need not take the same action with respect to all awards (or portions thereof) or with respect to all participants.
Payment
Upon exercise of an option granted under
the 2016 Plan, and as permitted in the Administrator’s discretion, the option holder may pay the exercise price in cash (or
cash equivalent), by surrendering previously-acquired unencumbered shares of Company common stock, by withholding shares of Company
common stock from the number of shares that would otherwise be issuable upon exercise of the option (e.g., a net share settlement),
through broker-assisted cashless exercise (if compliant with applicable securities laws and any insider trading policies of the
Company), another form of payment authorized by the Administrator, or a combination of any of the foregoing. If the exercise price
is paid, in whole or in part, with Company common stock, the then-current fair market value of the stock delivered or withheld
will be used to calculate the number of shares required to be delivered or withheld.
Transfer Restrictions
Unless permitted by law and expressly permitted
by the 2016 Plan or underlying award agreement, no award will be transferable, other than by will or by the laws of descent and
distribution. The Administrator may permit a recipient of a non-qualified stock option to transfer the award by gift to his or
her “immediate family” or to certain trusts or partnerships (as defined and permitted by applicable federal securities
law).
Forms of Agreement
The Administrator has approved forms of
agreement to govern incentive stock options, non-qualified stock options, restricted stock awards and restricted stock units. The
foregoing summaries of the 2016 Plan and the forms of the agreements do not purport to be complete and are qualified in their entirety
by reference to the text of the 2016 Plan and to the text of the forms of agreement, which are filed as Exhibits 10.1 through 10.5
hereto.
| Item 9.01 | Financial Statements
and Exhibits. |
(d) Exhibits.
The following exhibits are filed as part of this Current Report:
| Exhibit No. |
|
Description |
| |
|
|
| 10.1 |
|
Arno Therapeutics, Inc. 2016 Equity Incentive Plan |
| 10.2 |
|
Form of Incentive Stock Option Agreement - 2016 Equity Incentive Plan |
| 10.3 |
|
Form of Nonqualified Stock Option Agreement - 2016 Equity Incentive Plan |
| 10.4 |
|
Form of Restricted Stock Agreement - 2016 Equity Incentive Plan |
| 10.5 |
|
Form of Restricted Stock Unit Agreement - 2016 Equity Incentive Plan |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: March 17, 2016
| |
Arno Therapeutics, Inc. |
| |
|
| |
|
| |
By: |
/s/ Alexander Zukiwski |
| |
|
Alexander Zukiwski, M.D.
Chief Executive Officer |
Index to Exhibits Filed with this
Report
| Exhibit No. |
|
Description |
| |
|
|
| 10.1 |
|
Arno Therapeutics, Inc. 2016 Equity Incentive Plan |
| 10.2 |
|
Form of Incentive Stock Option Agreement - 2016 Equity Incentive Plan |
| 10.3 |
|
Form of Nonqualified Stock Option Agreement - 2016 Equity Incentive Plan |
| 10.4 |
|
Form of Restricted Stock Agreement - 2016 Equity Incentive Plan |
| 10.5 |
|
Form of Restricted Stock Unit Agreement - 2016 Equity Incentive Plan |
Exhibit 10.1
ARNO THERAPEUTICS, INC.
2016 EQUITY INCENTIVE PLAN
SECTION 1.
DEFINITIONS
As used herein, the
following terms shall have the meanings indicated below:
(a) “Administrator”
shall mean the Board of Directors of the Company, or one or more Committees appointed by the Board of Directors, as the case
may be.
(b) “Affiliate(s)”
shall mean a Parent or Subsidiary of the Company.
(c) “Agreement”
shall mean the written agreement entered into by the Participant and the Company evidencing the grant of an Award. Each Agreement
shall be in such form as may be approved from time to time by the Administrator and may vary from Participant to Participant.
(d) “Annual
Award Limit” or “Annual Award Limits” shall have the meaning set forth in Section 6(d) of the Plan.
(e) “Award”
shall mean any grant pursuant to the Plan of an Incentive Stock Option, Nonqualified Stock Option, Restricted Stock Award, Restricted
Stock Unit, Performance Award or Stock Appreciation Right.
(f) “Change
of Control” shall mean the occurrence, in a single transaction or in a series of related transactions, of any one or
more of the events in subsections (i) through (iv) below. For purposes of this definition, a person, entity or group shall be deemed
to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership”
of securities if such person, entity or group 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.
(i) Any person, entity or
group 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, exchange,
reorganization or similar transaction. Notwithstanding the foregoing, a Change of Control shall not be deemed to occur (A) on account
of the acquisition of securities of the Company by an investor, any affiliate thereof or any other person, entity or group from
the Company 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 (B) solely because the level of Ownership held by any person, entity or group (the
“Subject Person”) exceeds the designated percentage threshold of the Voting Power 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 of
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 of Control shall be deemed to occur;
(ii) There is consummated
a merger, consolidation, exchange, reorganization or similar transaction involving (directly or indirectly) the Company and, immediately
after the consummation of such merger, consolidation, exchange, reorganization 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, exchange, reorganization 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) There is consummated
a sale, lease, exclusive license or other disposition of all or substantially all of the total gross value 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 total gross value 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 (for purposes of this Section 1(f)(iii), “gross value” means the value of the assets of the Company
or the value of the assets being disposed of, as the case may be, determined without regard to any liabilities associated with
such assets); or
(iv) Individuals who, at the
beginning of any consecutive twelve-month period, are members of the Board (the “Incumbent Board”) cease for
any reason to constitute at least a majority of the members of the Board at any time during that consecutive twelve-month period;
provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended
by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of the Plan,
be considered as a member of the Incumbent Board.
For the avoidance of doubt, the term “Change
of Control” shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing
the domicile of the Company. To the extent required, the determination of whether a Change of Control has occurred shall be made
in accordance with Code Section 409A and the regulations, notices and other guidance of general applicability issued thereunder.
(g) “Close
of Business” of a specified day shall mean 5:00 p.m., Eastern Time, without regard to whether such day is a Saturday,
Sunday, bank holiday, or other day on which no business is conducted.
(h) “Committee”
shall mean a Committee of two or more Directors who shall be appointed by and serve at the pleasure of the Board. To the extent
necessary for compliance with Rule 16b-3, each of the members of the Committee shall be a “non-employee director.”
Solely for purposes of this Section 1(h), “non-employee director” shall have the same meaning as set forth in Rule
16b-3. Further, to the extent necessary for compliance with the limitations set forth in Internal Revenue Code Section 162(m),
each of the members of the Committee shall be an “outside director” within the meaning of Code Section 162(m) and the
regulations issued thereunder.
(i) “Common
Stock” shall mean the common stock of the Company (subject to adjustment as provided in Section 15 of the Plan).
(j) The “Company”
shall mean Arno Therapeutics, Inc., a Delaware corporation.
(k) “Consultant”
shall mean any person, including an advisor, who is engaged by the Company or any Affiliate to render consulting or advisory services
and is compensated for such services; provided, however, that no person shall be considered a Consultant for purposes
of the Plan unless such Consultant is a natural person, renders bona fide services to the Company or any Affiliate, and such services
are not in connection with the offer or sale of securities in a capital raising transaction and do not directly or indirectly promote
or maintain a market for the Company’s securities. For purposes of the Plan, “Consultant” shall
also include a director of an Affiliate who is compensated for services as a director.
(l) “Covered
Employee” shall mean any key salaried Employee who is or may become a “Covered Employee,” as defined in Code
Section 162(m), and who is designated, either as an individual Employee or class of Employees, by the Administrator within the
shorter of (i) ninety (90) days after the beginning of the Performance Period, or (ii) twenty-five percent (25%) of the Performance
Period has elapsed, as a “Covered Employee” under the Plan for such applicable Performance Period.
(m) “Director”
shall mean a member of the Board of Directors of the Company.
(n) “Effective
Date” shall mean the date the Board of Directors of the Company approves the amendment and restatement of the Plan.
(o) “Employee”
shall mean a common law employee of the Company or any Affiliate, including “officers” as defined by Section 16 of
the Exchange Act; provided, however, that service solely as a Director or Consultant, regardless of whether a fee
is paid for such service, shall not cause a person to be an Employee for purposes of the Plan.
(p) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(q) “Fair
Market Value” of specified stock as of any date shall mean (i) if such stock is listed on the Nasdaq Global Select Market,
Nasdaq Global Market, Nasdaq Capital Market or an established stock exchange, the price of such stock at the close of the regular
trading session of such market or exchange on such date, as reported by Bloomberg or a comparable reporting service, or, if no
sale of such stock shall have occurred on such date, on the next preceding date on which there was a sale of stock; (ii) if such
stock is not so listed on the Nasdaq Global Select Market, Nasdaq Global Market, Nasdaq Capital Market, or an established stock
exchange, the average of the closing “bid” and “asked” prices quoted by the OTC Bulletin Board, the National
Quotation Bureau, or any comparable reporting service on such date or, if there are no quoted “bid” and “asked”
prices on such date, on the next preceding date for which there are such quotes; or (iii) if such stock is not publicly traded
as of such date, the per share value as determined by the Board or the Committee in its sole discretion by applying principles
of valuation with respect to Common Stock.
(r) “Full
Value Award” shall mean an Award that is settled by the issuance of shares of Common Stock, other than in the form of
an Option or Stock Appreciation Right.
(s) “Incentive
Stock Option” shall mean an Option granted pursuant to Section 9 of the Plan that is intended to satisfy the provisions
of Code Section 422, or any successor provision.
(t) “Insider”
shall mean an individual who is, on the relevant date, an officer or Director of the Company, or an individual who beneficially
owns more than ten percent (10%) of any class of equity securities of the Company that is registered under Section 12 of the Exchange
Act, as determined by the Board of Directors in accordance with Section 16 of the Exchange Act.
(u) The “Internal
Revenue Code” or “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
References to sections of the Code are intended to include applicable treasury regulations and successor statutes and regulations.
(v) “Option”
shall mean an Incentive Stock Option or Nonqualified Stock Option granted pursuant to the Plan.
(w) “Nonqualified
Stock Option” shall mean an Option granted pursuant to Section 10 of the Plan or an Option (or portion thereof) that
does not qualify as an Incentive Stock Option.
(x) “Parent”
shall mean any parent corporation of the Company within the meaning of Code Section 424(e), or any successor provision.
(y) “Participant”
shall mean an Employee to whom an Incentive Stock Option has been granted or an Employee, a Director, or a Consultant to whom a
Nonqualified Stock Option, Restricted Stock Award, Restricted Stock Unit, Performance Award or Stock Appreciation Right has been
granted.
(z) “Performance
Award” shall mean any Performance Shares or Performance Units Award granted pursuant to Section 13 of the Plan.
(aa) “Performance-Based
Compensation” shall mean compensation under an Award that is intended to satisfy the requirements of Code Section 162(m)
for certain performance-based compensation paid to Covered Employees. Notwithstanding the foregoing, nothing in the Plan shall
be construed to mean that an Award which does not satisfy the requirements for performance-based compensation under Code Section
162(m) does not constitute performance-based compensation for other purposes, including Code Section 409A.
(bb) “Performance
Objective(s)” shall mean one or more performance objectives established by the Administrator, in its sole discretion,
for Awards granted under this Plan, including Performance Awards to Covered Employees that are intended to qualify as Performance-Based
Compensation. For any Awards that are intended to qualify as “performance-based compensation” under Code Section 162(m),
the Performance Objectives shall be limited to any one, or a combination of the following criteria: (1) earnings (including earnings
per share and net earnings); (2) earnings before interest, taxes and depreciation; (3) earnings before interest, taxes, depreciation
and amortization; (4) earnings before interest, taxes, depreciation, amortization and legal settlements; (5) earnings before interest,
taxes, depreciation, amortization, legal settlements and other income (expense); (6) earnings before interest, taxes, depreciation,
amortization, legal settlements, other income (expense) and stock-based compensation; (7) earnings before interest, taxes, depreciation,
amortization, legal settlements, other income (expense), stock-based compensation and changes in deferred revenue; (8) total stockholder
return; (9) return on equity or average stockholder’s equity; (10) return on assets, investment, or capital employed; (11)
stock price; (12) margin (including gross margin); (13) income (before or after taxes); (14) operating income; (15) operating income
after taxes; (16) pre-tax profit; (17) operating cash flow; (18) sales or revenue targets; (19) increases in revenue or product
revenue; (20) expenses and cost reduction goals; (21) improvement in or attainment of working capital levels; (22) economic value
added (or an equivalent metric); (23) market share; (24) cash flow; (25) cash flow per share; (26) share price performance; (27)
debt reduction; (28) implementation or completion of projects or processes; (29) employee retention; (30) stockholders’ equity;
(31) capital expenditures; (32) debt levels; (33) operating profit or net operating profit; (34) workforce diversity; (35) growth
of net income or operating income; (36) billings; (37) bookings; (38) initiation or completion of phases of clinical trials and/or
studies by specified dates; (39) patient enrollment rates; (40) budget management; (41) regulatory body approval with respect to
products, studies and/or trials; and (42) commercial launch of products.
(cc) “Performance
Period” shall mean the period, established at the time any Award is granted or at any time thereafter, during which any
Performance Objectives specified by the Administrator with respect to such Award are to be measured.
(dd) “Performance
Share” shall mean any grant pursuant to Section 13 hereof of an Award, which value, if any, shall be paid to a Participant
by delivery of shares of Common Stock of the Company upon achievement of such Performance Objectives during the Performance Period
as the Administrator shall establish at the time of such grant or thereafter.
(ee) “Performance
Unit” shall mean any grant pursuant to Section 13 hereof of an Award, which value, if any, shall be paid to a Participant
by delivery of cash upon achievement of such Performance Objectives during the Performance Period as the Administrator shall establish
at the time of such grant or thereafter.
(ff) “Plan”
means the Arno Therapeutics, Inc. 2016 Equity Incentive Plan, as amended hereafter from time to time, including the form of Agreements
as they may be modified by the Administrator from time to time.
(gg) “Restricted
Stock Award” shall mean any grant of restricted shares of Common Stock pursuant to Section 11 of the Plan.
(hh) “Restricted
Stock Unit” shall mean any grant of any restricted stock units pursuant to Section 12 of the Plan.
(ii) “Rule
16b-3” shall mean Rule 16b-3, or any successor provision, as then in effect, of the General Rules and Regulations under
the Exchange Act.
(jj) “Stock
Appreciation Right” shall mean a grant pursuant to Section 14 of the Plan.
(kk) A “Subsidiary”
shall mean any subsidiary corporation of the Company within the meaning of Code Section 424(f), or any successor provision.
(ll) “Voting
Power” shall mean any and all classes of securities issued by the applicable entity which are entitled to vote in the
election of directors of the applicable entity.
SECTION 2.
PURPOSE
The purpose of the
Plan is to promote the success of the Company and its Affiliates by facilitating the employment and retention of competent personnel
and by furnishing incentives to those Employees, Directors, and Consultants upon whose efforts the success of the Company and its
Affiliates will depend to a large degree. It is the intention of the Company to carry out the Plan through the granting of Incentive
Stock Options, Nonqualified Stock Options, Restricted Stock Awards, Restricted Stock Units, Performance Awards and Stock Appreciation
Rights.
SECTION 3.
EFFECTIVE DATE AND DURATION OF PLAN
The Plan shall be effective
on the Effective Date; provided, however, that adoption of the Plan shall be and is expressly subject to the condition of approval
by the stockholders of the Company within twelve (12) months before or after the Effective Date. However, Awards may be granted
prior to the date the Plan is approved by the stockholders of the Company; provided, that any Incentive Stock Options granted
after the Effective Date shall be treated as Nonqualified Stock Options if stockholder approval is not obtained within such twelve-month
period.
The Administrator may
grant Awards pursuant to the Plan from time to time until the Administrator discontinues or terminates the Plan; provided, however,
that in no event may Incentive Stock Options be granted pursuant to the Plan after the earlier of (i) the date the Administrator
discontinues or terminates the Plan, or (ii) the Close of Business on the day immediately preceding the tenth anniversary of the
Effective Date.
SECTION 4.
ADMINISTRATION
(a) Administration by the Board
of Directors or Committee(s). The Plan shall be administered by the Board of Directors of the Company (hereinafter referred
to as the “Board”); provided, however, that the Board may delegate some or all of the administration of the
Plan to a Committee or Committees. The Board and any Committee appointed by the Board to administer the Plan are collectively referred
to in the Plan as the “Administrator.”
(b) Delegation by Administrator.
The Administrator may delegate to one or more Committees and/or sub-Committees, or to one or more officers of the Company and/or
its Affiliates, or to one or more agents and/or advisors, such administrative duties or powers as it may deem advisable. The Administrator
or any Committees or individuals to whom it has delegated duties or powers as aforesaid may employ one or more individuals to render
advice with respect to any responsibility of the Administrator or such Committees or individuals may have under the Plan. The Administrator
may, by resolution, authorize one or more officers of the Company to do one or both of the following on the same basis as can the
Administrator: (i) designate Employees to be recipients of Awards and (ii) determine the size of any such Awards; provided, however,
(x) the Committee shall not delegate such responsibilities to any such officer for Awards granted to an Employee who is considered
an Insider; (y) the resolution providing such authorization sets forth the total number of Awards such officer(s) may grant; and
(z) the officer(s) shall report periodically to the Administrator regarding the nature and scope of the Awards granted pursuant
to the authority delegated.
(c) Powers of Administrator.
Except as otherwise provided herein, the Administrator shall have all of the powers vested in it under the provisions of the Plan,
including but not limited to exclusive authority to determine, in its sole discretion, whether an Award shall be granted; the individuals
to whom, and the time or times at which, Awards shall be granted; the number of shares subject to each Award; the exercise price
of Options granted hereunder; and the performance criteria, if any, and any other terms and conditions of each Award. The Administrator
shall have full power and authority to administer and interpret the Plan, to make and amend rules, regulations and guidelines for
administering the Plan, to prescribe the form and conditions of the respective Agreements evidencing each Award (which may vary
from Participant to Participant), to amend or revise Agreements evidencing any Award (to the extent the amended terms would be
permitted by the Plan and provided that no such revision or amendment, except as is authorized in Section 15, shall impair the
terms and conditions of any Award which is outstanding on the date of such revision or amendment to the material detriment of the
Participant in the absence of the consent of the Participant), and to make all other determinations necessary or advisable for
the administration of the Plan (including to correct any defect, omission or inconsistency in the Plan or any Agreement, to the
extent permitted by law and the Plan). The Administrator’s interpretation of the Plan, and all actions taken and determinations
made by the Administrator pursuant to the power vested in it hereunder, shall be conclusive and binding on all parties concerned.
(d) Limitation on Liability;
Actions of Committees. No member of the Board or a Committee shall be liable for any action taken or determination made in
good faith in connection with the administration of the Plan. In the event the Board appoints a Committee as provided hereunder,
or the Administrator delegates any of its duties to another Committee or sub-Committee, any action of such Committee with respect
to the administration of the Plan shall be taken pursuant to a majority vote of the Committee members or pursuant to the written
resolution of all Committee members.
SECTION 5.
PARTICIPANTS
The Administrator may
grant Awards under the Plan to any Employee, Director, or Consultant; provided, however, that only Employees are eligible to receive
Incentive Stock Options. In designating Participants, the Administrator shall also determine the number of shares or cash units
to be optioned or awarded to each such Participant and any Performance Objectives applicable to Awards. The Administrator may from
time to time designate individuals as being ineligible to participate in the Plan. The power of the Administrator under this Section
5 shall be exercised from time to time in the sole discretion of the Administrator and without approval by the stockholders.
SECTION 6.
STOCK
(a) Number of Shares Reserved.
The stock to be awarded or optioned under the Plan (the “Share Authorization”) shall consist of authorized but
unissued or reacquired shares of Common Stock. Subject to Section 15 of the Plan, the maximum aggregate number of shares of Common
Stock reserved and available for Awards under the Plan is reserved and available for Awards under the Plan is 9,000,000 shares;
provided, however, that all shares of Stock reserved and available under the Plan shall constitute the maximum aggregate
number of shares of Stock that may be issued through Incentive Stock Options.
(b) Share Usage. The following
shares of Common Stock shall not reduce the Share Authorization and shall continue to be reserved and available for Awards granted
pursuant to the Plan: (i) all or any portion of any outstanding Restricted Stock Award or Restricted Stock Unit that expires or
is forfeited for any reason, or that is terminated prior to the vesting or lapsing of the risks of forfeiture on such Award, and
(ii) shares of Common Stock covered by an Award to the extent the Award is settled in cash; provided, however, that the full number
of shares of Common Stock subject to a Stock Appreciation Right shall reduce the Share Authorization, whether such Stock Appreciation
Right is settled in cash or shares of Common Stock. Any shares of Common Stock withheld to satisfy tax withholding obligations
on an Award, shares of Common Stock withheld to pay the exercise price of an Option, and shares of Common Stock subject to a broker-assisted
cashless exercise of an Option shall reduce the Share Authorization.
(c) Annual Award Limits.
Unless and until the Administrator determines that an Award to a Covered Employee shall not be Performance-Based Compensation,
the following limits (each, an “Annual Award Limit,” and collectively, “Annual Award Limits”)
shall apply to grants of such Awards under the Plan:
(i) Options and Stock
Appreciation Rights. The maximum number of shares of Common Stock subject to Options granted and shares of Common Stock subject
to Stock Appreciation Rights granted in any one calendar year to any one Participant shall be, in the aggregate, 2,000,000 shares,
subject to adjustment as provided in Section 15.
(ii) Restricted Stock
Awards and Restricted Stock Units. The maximum grant with respect Restricted Stock Awards and Restricted Stock Units in any
one calendar year to any one Participant shall be, in the aggregate, 2,000,000 shares, subject to adjustment as provided
in Section 15.
(iii) Performance
Awards. To the extent payable in or measured by the value of shares of Stock, in no event shall a Participant be granted Performance
Awards during any fiscal year of the Company covering in the aggregate more than 2,000,000 shares, subject to adjustment as provided
in Section 15. To the extent payable in cash, in no event shall a Participant be granted Performance Awards during any fiscal year
of the Company covering in the aggregate more than 2,000,000.
SECTION 7.
PERFORMANCE OBJECTIVES
(a) Performance Objectives.
Any Performance Objective may be used to measure the performance of the Company and/or Affiliate, as a whole or with respect to
any business unit, or any combination thereof as the Administrator may deem appropriate, or any of the specified Performance Objectives
as compared to the performance of a group of competitor companies, or published or special index that the Administrator, in its
sole discretion, deems appropriate. The Administrator also has the authority to provide for accelerated vesting of any Award based
on the achievement of performance goals pursuant to the Performance Objectives; provided, however, that such authority
shall be subject to Code Section 162(m) with respect to Awards intended to qualify as Performance-Based Compensation.
(b) Evaluation of Performance
Objectives. The Administrator may provide in any Award based on Performance Objectives that any evaluation of performance may
include or exclude any of the following events that occurs during a Performance Period: (i) asset write-downs, (ii) litigation
or claim judgments or settlements, (iii) the effect of changes in tax laws, accounting principles, or other laws or provisions
affecting reported results, (iv) any reorganization and restructuring programs, (v) extraordinary nonrecurring items as described
in FASB Accounting Standards Codification 225-20—Extraordinary and Unusual Items and/or in Management's Discussion and Analysis
of financial condition and results of operations appearing in the Company's annual report to stockholders for the applicable year,
(vi) acquisitions or divestitures, and (vii) foreign exchange gains and losses. To the extent such inclusions or exclusions affect
Awards to Covered Employees, they shall be prescribed in a form that meets the requirements of Code Section 162(m) for deductibility.
(c) Adjustment of Performance-Based
Compensation. Awards that are intended to qualify as Performance-Based Compensation may not be adjusted upward. The Administrator
shall retain the discretion to adjust such Awards downward, either on a formula or discretionary basis or any combination, as the
Administrator determines.
(d) Administrator
Discretion. In the event that applicable tax and/or securities laws change to permit Administrator discretion to alter the
governing Performance Objectives without obtaining stockholder approval of such changes, the Administrator shall have sole discretion
to make such changes without obtaining stockholder approval. In addition, in the event that the Administrator determines that it
is advisable to grant Awards that shall not qualify as Performance-Based Compensation, the Administrator may make such grants without
satisfying the requirements of Code Section 162(m) and, in such case, may apply performance objectives other than those set forth
in this Section 7.
SECTION 8.
PAYMENT OF OPTION EXERCISE PRICE
Upon the exercise of
an Option, Participants may pay the exercise price of an Option (i) in cash, or with a personal check, certified check, or other
cash equivalent, (ii) by the surrender by the Participant to the Company of previously acquired unencumbered shares of Common Stock
(through physical delivery or attestation), (iii) through the withholding of shares of Common Stock from the number of shares otherwise
issuable upon the exercise of the Option (e.g., a net share settlement), (iv) through broker-assisted cashless exercise
if such exercise complies with applicable securities laws and any insider trading policy of the Company, (v) such other form of
payment as may be authorized by the Administrator, or (vi) by a combination thereof. In the event the Participant elects to pay
the exercise price, in whole or in part, with previously acquired shares of Common Stock or through a net share settlement, the
then-current Fair Market Value of the stock delivered or withheld shall equal the total exercise price for the shares being purchased
in such manner.
The Administrator may,
in its sole discretion, limit the forms of payment available to the Participant and may exercise such discretion any time prior
to the termination of the Option granted to the Participant or upon any exercise of the Option by the Participant. “Previously
acquired shares of Common Stock” means shares of Common Stock which the Participant owns on the date of exercise (or for
the period of time, if any, as may be required by generally accepted accounting principles or any successor principles applicable
to the Company).
With respect to payment
in the form of Common Stock, the Administrator may require advance approval or adopt such rules as it deems necessary to assure
compliance with Rule 16b-3, if applicable.
SECTION 9.
TERMS AND CONDITIONS OF INCENTIVE
STOCK OPTIONS
Each Incentive Stock
Option shall be evidenced by an Incentive Stock Option Agreement, which shall comply with and be subject to the following terms
and conditions:
(a) Number of Shares and Exercise
Price. The Incentive Stock Option Agreement shall state the total number of shares covered by the Incentive Stock Option. Except
as permitted by Code Section 424(a), or any successor provision, the exercise price per share shall not be less than one hundred
percent (100%) of the per share Fair Market Value of the Common Stock on the date the Administrator grants the Incentive Stock
Option; provided, however, that if a Participant owns stock possessing more than ten percent (10%) of the total combined
Voting Power of all classes of stock of the Company or of its Parent or any Subsidiary, the exercise price per share of an Incentive
Stock Option granted to such Participant shall not be less than one hundred ten percent (110%) of the per share Fair Market Value
of Common Stock on the date of the grant of the Incentive Stock Option. The Administrator shall have full authority and discretion
in establishing the exercise price and shall be fully protected in so doing.
(b) Exercisability and Term.
The Incentive Stock Option Agreement shall state when the Incentive Stock Option becomes exercisable (i.e. “vests”),
and, if applicable in the Administrator’s discretion, shall describe the Performance Objectives and Performance Period upon
which vesting is based, the manner in which performance shall be measured and the extent to which partial achievement of the Performance
Objectives may result in vesting of the Option. The Participant may exercise the Incentive Stock Option, in full or in part, upon
or after the vesting date of such Option (or portion thereof). Notwithstanding anything in the Plan or the Agreement to the contrary,
the Participant may not exercise an Incentive Stock Option after the maximum term of such Option, as such term is specified in
the Incentive Stock Option Agreement. Except as permitted by Code Section 424(a), in no event shall any Incentive Stock Option
be exercisable during a term of more than ten (10) years after the date on which it is granted; provided, however, that if a Participant
owns stock possessing more than ten percent (10%) of the total combined Voting Power of all classes of stock of the Company or
of its Parent or any Subsidiary, the Incentive Stock Option granted to such Participant shall be exercisable during a term of not
more than five (5) years after the date on which it is granted. The Administrator may accelerate the exercisability of any Incentive
Stock Option granted hereunder which is not immediately exercisable as of the date of grant.
(c) No
Rights as Stockholder. A Participant (or the Participant’s successors) shall have no rights as a stockholder with respect
to any shares covered by an Incentive Stock Option until the date of the issuance of the Common Stock subject to such Award upon
exercise, as evidenced by a stock certificate or as reflected in the books and records of the Company or its designated agent (i.e.,
a “book entry”). No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities
or other property), distributions or other rights for which the record date is prior to the date such shares are actually issued
(as evidenced in either certificated or book entry form).
(d) Withholding. The Company
or its Affiliate shall be entitled to withhold and deduct from any future payments to the Participant all legally required amounts
necessary to satisfy any and all withholding and employment-related taxes attributable to the Participant’s exercise of an
Incentive Stock Option or a “disqualifying disposition” of shares acquired through the exercise of an Incentive Stock
Option as defined in Code Section 421(b), to require the Participant to remit an amount sufficient to satisfy such withholding
requirements, or to require any combination thereof. In the event the Participant is required under the Incentive Stock Option
Agreement to pay the Company, or make arrangements satisfactory to the Company respecting payment of, such withholding and employment-related
taxes, the Administrator may, in its sole discretion, require the Participant to satisfy such obligation, in whole or in part,
by delivering shares of Common Stock or by electing to have the Company withhold shares of Common Stock otherwise issuable to the
Participant as a result of the exercise of the Incentive Stock Option. Such shares shall have a Fair Market Value equal to the
minimum required tax withholding, based on the minimum statutory withholding rates for federal and state tax purposes, including
payroll taxes, that are applicable to the supplemental income resulting from such exercise or disqualifying disposition. In no
event may the Participant deliver shares, nor may the Company or any Affiliate withhold shares, having a Fair Market Value in excess
of such statutory minimum required tax withholding. The Participant’s delivery of shares or the withholding of shares for
this purpose shall occur on or before the later of (i) the date the Incentive Stock Option is exercised or the date of the disqualifying
disposition, as the case may be, or (ii) the date that the amount of tax to be withheld is determined under applicable tax law.
(e) Vesting Limitation. Notwithstanding
any other provision of the Plan, the aggregate Fair Market Value (determined as of the date an Incentive Stock Option is granted)
of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant
during any calendar year (under the Plan and any other “incentive stock option” plans of the Company or any Affiliate
shall not exceed $100,000 (or such other amount as may be prescribed by the Code from time to time); provided, however, that if
the exercisability or vesting of an Incentive Stock Option is accelerated as permitted under the provisions of the Plan and such
acceleration would result in a violation of the limit imposed by this Section 9(e), such acceleration shall be of full force and
effect but the number of shares of Common Stock that exceed such limit shall be treated as having been granted pursuant to a Nonqualified
Stock Option; and provided, further, that the limits imposed by this Section 9(e) shall be applied to all outstanding Incentive
Stock Options under the Plan and any other “incentive stock option” plans of the Company or any Affiliate in chronological
order according to the dates of grant.
(f) Other Provisions. The
Incentive Stock Option Agreement authorized under this Section 9 shall contain such other provisions as the Administrator shall
deem advisable. Any such Incentive Stock Option Agreement shall contain such limitations and restrictions upon the exercise of
the Incentive Stock Option as shall be necessary to ensure that such Incentive Stock Option will be considered an “incentive
stock option” as defined in Code Section 422 or to conform to any change therein.
SECTION 10.
TERMS AND CONDITIONS OF NONQUALIFIED
STOCK OPTIONS
Each Nonqualified Stock
Option shall be evidenced by a Nonqualified Stock Option Agreement, which shall comply with and be subject to the following terms
and conditions:
(a) Number of Shares and Exercise
Price. The Nonqualified Stock Option Agreement shall state the total number of shares covered by the Nonqualified Stock Option.
The exercise price per share shall be equal to one hundred percent (100%) of the per share Fair Market Value of the Common Stock
on the date of grant of the Nonqualified Stock Option, or such higher price as the Administrator determines.
(b) Exercisability and Term.
The Nonqualified Stock Option Agreement shall state when the Nonqualified Stock Option becomes exercisable (i.e. “vests”)
and, if applicable in the Administrator’s discretion, shall describe the Performance Objectives and Performance Period upon
which vesting is based, the manner in which performance shall be measured and the extent to which partial achievement of the Performance
Objectives may result in vesting of the Option. The Participant may exercise the Nonqualified Stock Option, in full or in part,
upon or after the vesting date of such Option (or portion thereof); provided, however, that the Participant may not exercise a
Nonqualified Stock Option after the maximum term of such Option, as such term is specified in the Nonqualified Stock Option Agreement.
Unless otherwise determined by the Administrator and specified in the Agreement governing the Award, no Nonqualified Stock Option
shall be exercisable during a term of more than ten (10) years after the date on which it is granted. The Administrator may accelerate
the exercisability of any Nonqualified Stock Option granted hereunder which is not immediately exercisable as of the date of grant.
(c) No Rights as Stockholder.
A Participant (or the Participant’s successors) shall have no rights as a stockholder with respect to any shares covered
by a Nonqualified Stock Option until the date of the issuance of the Common Stock subject to such Award upon exercise, as evidenced
by a stock certificate or as reflected in the books and records of the Company or its designated agent (i.e., a “book
entry”). No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date such shares are actually issued (as evidenced in either
certificated or book entry form).
(d) Withholding. The Company
or its Affiliate shall be entitled to withhold and deduct from any future payments to the Participant all legally required amounts
necessary to satisfy any and all withholding and employment-related taxes attributable to the Participant’s exercise of a
Nonqualified Stock Option, to require the Participant to remit an amount sufficient to satisfy such withholding requirements, or
to require any combination thereof. In the event the Participant is required under the Nonqualified Stock Option Agreement to pay
the Company, or make arrangements satisfactory to the Company respecting payment of, such withholding and employment-related taxes,
the Administrator may, in its sole discretion, require the Participant to satisfy such obligation, in whole or in part, by delivering
shares of Common Stock or by electing to have the Company withhold shares of Common Stock otherwise issuable to the Participant
as a result of the exercise of the Nonqualified Stock Option. Such shares shall have a Fair Market Value equal to the minimum required
tax withholding, based on the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes,
that are applicable to the supplemental income resulting from such exercise. In no event may the Participant deliver shares, nor
may the Company or any Affiliate withhold shares, having a Fair Market Value in excess of such statutory minimum required tax withholding.
The Participant’s delivery of shares or the withholding of shares for this purpose shall occur on or before the later of
(i) the date the Nonqualified Stock Option is exercised, or (ii) the date that the amount of tax to be withheld is determined under
applicable tax law.
(e) Other Provisions. The
Nonqualified Stock Option Agreement authorized under this Section 10 shall contain such other provisions as the Administrator shall
deem advisable.
SECTION 11.
RESTRICTED STOCK AWARDS
Each Restricted Stock
Award shall be evidenced by a Restricted Stock Award Agreement, which shall comply with and be subject to the following terms and
conditions:
(a) Number of
Shares. The Restricted Stock Award Agreement shall state the total number of shares of Common Stock covered by the Restricted
Stock Award.
(b) Risks of
Forfeiture. The Restricted Stock Award Agreement shall set forth the risks of forfeiture, if any, which shall apply to the
shares of Common Stock covered by the Restricted Stock Award and the manner in which such risks of forfeiture shall lapse, including,
if applicable in the Administrator’s discretion, a description of the Performance Objectives and Performance Period upon
which the lapse of risks of forfeiture is based, the manner in which performance shall be measured and the extent to which partial
achievement of the Performance Objectives may result in lapse of risks of forfeiture. The Administrator may, in its sole discretion,
modify the manner in which such risks of forfeiture shall lapse but only with respect to those shares of Common Stock which are
restricted as of the effective date of the modification.
(c) Issuance
of Shares; Rights as Stockholder. Except as provided below, the Company shall cause a stock certificate to be issued and shall
deliver such certificate to the Participant or hold such certificate in a manner determined by the Administrator in its sole discretion;
provided, however, that in lieu of a stock certificate, the Company may evidence the issuance of shares by a book entry in the
records of the Company or its designated agent (if permitted by the Company’s designated agent and applicable law, as determined
by the Administrator in its sole discretion). The Company shall cause a legend or notation to be placed on such certificate or
book entry describing the risks of forfeiture and other transfer restrictions set forth in the Participant’s Restricted Stock
Award Agreement and providing for the cancellation and, if applicable, return of such certificate or book entry if the shares of
Common Stock subject to the Restricted Stock Award are forfeited. Until the risks of forfeiture have lapsed or the shares subject
to such Restricted Stock Award have been forfeited, the Participant shall be entitled to vote the shares of Common Stock represented
by such stock certificates and shall receive all dividends attributable to such shares, but the Participant shall not have any
other rights as a stockholder with respect to such shares.
(d) Withholding
Taxes. The Company or its Affiliate shall be entitled to withhold and deduct from any future payments to the Participant all
legally required amounts necessary to satisfy any and all withholding and employment-related taxes attributable to the Participant’s
Restricted Stock Award, to require the Participant to remit an amount sufficient to satisfy such withholding requirements, or to
require any combination thereof. In the event the Participant is required under the Restricted Stock Award Agreement to pay the
Company, or make arrangements satisfactory to the Company respecting payment of, such withholding and employment-related taxes,
the Administrator may, in its sole discretion, require the Participant to satisfy such obligations, in whole or in part, by delivering
shares of Common Stock, including shares of Common Stock received pursuant to the Restricted Stock Award on which the risks of
forfeiture have lapsed. Such shares shall have a Fair Market Value equal to the minimum required tax withholding, based on the
minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to the supplemental
income resulting from the lapsing of the risks of forfeiture on such Restricted Stock Award. In no event may the Participant deliver
shares having a Fair Market Value in excess of such statutory minimum required tax withholding. The Participant’s delivery
of shares shall occur on or before the date that the amount of tax to be withheld is determined under applicable tax law.
(e) Other Provisions.
The Restricted Stock Award Agreement authorized under this Section 11 shall contain such other provisions as the Administrator
shall deem advisable.
SECTION 12.
RESTRICTED STOCK UNITS
Each Restricted Stock
Unit shall be evidenced by a Restricted Stock Unit Agreement, which shall comply with and be subject to the following terms and
conditions:
(a) Number of
Shares. The Restricted Stock Unit Agreement shall state the total number of shares of Common Stock covered by the Restricted
Stock Unit.
(b) Vesting.
The Restricted Stock Unit Agreement shall set forth the vesting conditions, if any, which shall apply to the Restricted Stock Unit
and the manner in which such vesting may occur, including, if applicable in the Administrator’s discretion, a description
of the Performance Objectives and Performance Period upon which vesting is based, the manner in which performance shall be measured
and the extent to which partial achievement of the Performance Objectives may result in vesting of the Restricted Stock Unit. The
Administrator may, in its sole discretion, accelerate the vesting of any Restricted Stock Unit.
(c) Issuance
of Shares; Rights as Stockholder. The Participant shall be entitled to payment of the Restricted Stock Unit as the units subject
to such Award vest. The Administrator may, in its sole discretion, pay Restricted Stock Units in shares of Common Stock, cash in
an amount equal to the Fair Market Value, on the date of payment, of the number of shares of Common Stock underlying the Award
that have vested on the applicable payment date, or any combination thereof, as specified in the Restricted Stock Unit Agreement.
If payment is made in shares of Common Stock, the Administrator shall cause to be issued one or more stock certificates in the
Participant’s name and shall deliver such certificates to the Participant in satisfaction of such units; provided, however,
that in lieu of stock certificates, the Company may evidence such shares by a book entry in the records of the Company or its designated
agent (if permitted by the Company’s designated agent and applicable law, as determined by the Administrator in its sole
discretion). Until the units subject to the Restricted Stock Unit have vested, the Participant shall not be entitled to vote any
shares of Common Stock which may be acquired through the Award, shall not receive any dividends attributable to such shares, and
shall not have any other rights as a stockholder with respect to such shares.
(d) Withholding
Taxes. The Company or its Affiliate shall be entitled to withhold and deduct from any future payments to the Participant all
legally required amounts necessary to satisfy any and all withholding and employment-related taxes attributable to the Participant’s
Restricted Stock Unit, to require the Participant to remit an amount sufficient to satisfy such withholding requirements, or to
require any combination thereof. In the event the Participant is required under the Restricted Stock Unit Agreement to pay the
Company, or make arrangements satisfactory to the Company respecting payment of, such withholding and employment-related taxes,
the Administrator may, in its sole discretion, require the Participant to satisfy such obligations, in whole or in part, by delivering
shares of Common Stock, including shares of Common Stock received pursuant to the Restricted Stock Unit. Such shares shall have
a Fair Market Value equal to the minimum required tax withholding, based on the minimum statutory withholding rates for federal
and state tax purposes, including payroll taxes, that are applicable to the supplemental income resulting from the payment of such
Restricted Stock Unit. In no event may the Participant deliver shares having a Fair Market Value in excess of such statutory minimum
required tax withholding. The Participant’s delivery of shares for this purpose shall occur on or before the date that the
amount of tax to be withheld is determined under applicable tax law.
(e) Other Provisions. The
Restricted Stock Unit Agreement authorized under this Section 12 shall contain such other provisions as the Administrator shall
deem advisable.
SECTION 13.
PERFORMANCE AWARDS
Each Performance Award
granted pursuant to this Section 13 shall be evidenced by a written performance award agreement (the “Performance Award Agreement”).
The Performance Award Agreement shall be in such form as may be approved from time to time by the Administrator and may vary from
Participant to Participant; provided, however, that each Participant and each Performance Award Agreement shall comply with and
be subject to the following terms and conditions:
(a) Awards. Performance Awards
in the form of Performance Units or Performance Shares may be granted to any Participant in the Plan. Performance Units shall consist
of monetary awards which may be earned or become vested in whole or in part if the Company or the Participant achieves certain
Performance Objectives established by the Administrator over a specified Performance Period. Performance Shares shall consist of
shares of Stock or other Awards denominated in shares of Stock that may be earned or become vested in whole or in part if the Company
or the Participant achieves certain Performance Objectives established by the Administrator over a specified Performance Period.
(b) Performance Objectives, Performance
Period and Payment. The Performance Award Agreement shall set forth:
(i) the number of Performance Units
or Performance Shares subject to the Performance Award, and the dollar value of each Performance Unit;
(ii) one or more Performance Objectives
established by the Administrator;
(iii) the Performance Period over
which Performance Units or Performance Shares may be earned or may become vested;
(iv) the extent to which partial
achievement of the Performance Objectives may result in a payment or vesting of the Performance Award, as determined by the Administrator;
and
(v) the date upon which payment
of Performance Units will be made or Performance Shares will be issued, as the case may be, and the extent to which such payment
or the receipt of such Performance Shares or Performance Units may be deferred.
(c) Withholding Taxes. The
Company or its Affiliates shall be entitled to withhold and deduct from future wages of the Participant all legally required amounts
necessary to satisfy any and all withholding and employment-related taxes attributable to the Participant’s Performance Award.
In the event the Participant is required under the Performance Award Agreement to pay the Company or its Affiliates, or make arrangements
satisfactory to the Company or its Affiliates respecting payment of, such withholding and employment-related taxes, the Administrator
may, in its discretion and pursuant to such rules as it may adopt, permit the Participant to satisfy such obligations, in whole
or in part, by delivering shares of Common Stock, including shares of Stock received pursuant to the Performance Award. Such shares
shall have a Fair Market Value equal to the minimum required tax withholding, based on the minimum statutory withholding rates
for federal and state tax purposes, including payroll taxes. In no event may the Participant deliver shares having a Fair Market
Value in excess of such statutory minimum required tax withholding. The Participant’s election to deliver shares of Common
Stock for this purpose shall be made on or before the date that the amount of tax to be withheld is determined under applicable
tax law. Such election shall be approved by the Administrator and otherwise comply with such rules as the Administrator may adopt
to assure compliance with Rule 16b-3, or any successor provision, as then in effect, of the General Rules and Regulations under
the Exchange Act, if applicable.
(d) Nontransferability. No
Performance Award shall be transferable, in whole or in part, by the Participant, other than by will or by the laws of descent
and distribution. If the Participant shall attempt any transfer of any Performance Award granted under the Plan, such transfer
shall be void and the Performance Award shall terminate.
(e) No Rights as Stockholder.
A Participant (or the Participant’s successor or successors) shall have no rights as a stockholder with respect to any shares
covered by a Performance Award until the date of the issuance of a stock certificate evidencing such shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities or other property), distributions or other rights
for which the record date is prior to the date such stock certificate is actually issued (except as otherwise provided in Section
14 of the Plan).
(f) Other Provisions. The
Performance Award Agreement authorized under this Section 12 shall contain such other provisions as the Administrator shall deem
advisable.
SECTION 14.
STOCK APPRECIATION RIGHTS
Each Stock Appreciation
Right shall be evidenced by a Stock Appreciation Right Agreement, which shall comply with and be subject to the following terms
and conditions:
(a) Awards. A Stock Appreciation
Right shall entitle the Participant to receive, upon exercise, cash, shares of Common Stock, or any combination thereof, having
a value equal to the excess of (i) the Fair Market Value of a specified number of shares of Common Stock on the date of such exercise,
over (ii) a specified exercise price. The number of shares and the exercise price of the Stock Appreciation Right shall be determined
by the Administrator on the date of grant. The specified exercise price shall be equal to 100% of the Fair Market Value of such
shares of Common Stock on the date of grant of the Stock Appreciation Right, or such higher price as the Administrator determines.
A Stock Appreciation Right may be granted independent of or in tandem with a previously or contemporaneously granted Option.
(b) Exercisability and Term.
The Stock Appreciation Right Agreement shall state when the Stock Appreciation Right becomes exercisable (i.e., “vests”)
and, if applicable in the Administrator’s discretion, shall describe the Performance Objectives and Performance Period upon
which vesting is based, the manner in which performance shall be measured and the extent to which partial achievement of the Performance
Objectives may result in vesting of the Stock Appreciation Right. The Participant may exercise the Stock Appreciation Right, in
full or in part, upon or after the vesting date of such Stock Appreciation Right (or portion thereof); provided, however, that
the Participant may not exercise a Stock Appreciation Right after the maximum term of such Stock Appreciation Right, as such term
is specified in the Stock Appreciation Right Agreement. Unless otherwise determined by the Administrator and specified in the Agreement
governing the Award, no Stock Appreciation Right shall be exercisable during a term of more than ten (10) years after the date
on which it is granted.
The Administrator may
accelerate the exercisability of any Stock Appreciation Right granted hereunder which is not immediately exercisable as of the
date of grant. If a Stock Appreciation Right is granted in tandem with an Option, the Stock Appreciation Right Agreement shall
set forth the extent to which the exercise of all or a portion of the Stock Appreciation Right shall cancel a corresponding portion
of the Option, and the extent to which the exercise of all or a portion of the Option shall cancel a corresponding portion of the
Stock Appreciation Right.
(c) Withholding Taxes. The
Company or its Affiliate shall be entitled to withhold and deduct from any future payments to the Participant all legally required
amounts necessary to satisfy any and all withholding and employment-related taxes attributable to the Participant’s Stock
Appreciation Right, to require the Participant to remit an amount sufficient to satisfy such withholding requirements, or to require
any combination thereof. In the event the Participant is required under the Stock Appreciation Right to pay the Company or its
Affiliate, or make arrangements satisfactory to the Company or its Affiliate respecting payment of, such withholding and employment-related
taxes, the Administrator may, in its sole discretion, require the Participant to satisfy such obligation, in whole or in part,
by delivering shares of Common Stock or by electing to have the Company withhold shares of Common Stock otherwise issuable to the
Participant as a result of the exercise of the Stock Appreciation Right. Such shares shall have a Fair Market Value equal to the
minimum required tax withholding, based on the minimum statutory withholding rates for federal and state tax purposes, including
payroll taxes, that are applicable to the supplemental income resulting from such exercise. In no event may the Participant deliver
shares, nor may the Company or any Affiliate withhold shares, having a Fair Market Value in excess of such statutory minimum required
tax withholding. The Participant’s delivery of shares or the withholding of shares for this purpose shall occur on or before
the later of (i) the date the Stock Appreciation Right is exercised, or (ii) the date that the amount of tax to be withheld is
determined under applicable tax law.
(d) No Rights as Stockholder.
A Participant (or the Participant’s successors) shall have no rights as a stockholder with respect to any shares covered
by a Stock Appreciation Right until the date of the issuance of a stock certificate evidencing such shares; provided, however,
that in lieu of stock certificates, the Company may evidence such shares by a book entry in the records of the Company or its designated
agent (if permitted by the Company’s designated agent and applicable law, as determined by the Administrator in its sole
discretion). No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date such stock certificate is actually issued or such
book entry is made.
(e) Other Provisions. The
Stock Appreciation Right Agreement authorized under this Section 14 shall contain such other provisions as the Administrator shall
deem advisable, including but not limited to any restrictions on the exercise of the Stock Appreciation Right which may be necessary
to comply with Rule 16b-3.
SECTION 15.
RECAPITALIZATION, EXCHANGE,
LIQUIDATION, OR CHANGE OF CONTROL
(a) In General. In the event
of an increase or decrease in the number of shares of Common Stock resulting from a stock dividend, stock split, reverse split,
combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common
Stock effected without receipt of consideration by the Company, other than due to conversion of the convertible securities of the
Company, the Administrator may, in its sole discretion, adjust the value determinations applicable to outstanding Awards and the
Plan in order to reflect such change, including adjustment of the class and number of shares of stock reserved under Section 6
of the Plan, the class and number of shares of stock covered by each outstanding Award, and, if and as applicable, the exercise
price per share of each outstanding Award and the Annual Award Limits. Additional shares which may become covered by the Award
pursuant to such adjustment shall be subject to the same restrictions as are applicable to the shares with respect to which the
adjustment relates.
(b) Liquidation. Unless otherwise
provided in the Agreement evidencing an Award, in the event of a dissolution or liquidation of the Company, the Administrator may
provide for one or both of the following:
(i) the
acceleration of the exercisability of any or all outstanding Options or Stock Appreciation Rights, the vesting and payment of any
or all Performance Awards, or Restricted Stock Units, or the lapsing of the risks of forfeiture on any or all Restricted Stock
Awards; provided, however, that no such acceleration, vesting or payment shall occur if the acceleration, vesting or payment would
violate the requirements of Code Section 409A; or
(ii) the
complete termination of the Plan and the cancellation of any or all Awards (or portions thereof) which have not been exercised,
have not vested, or remain subject to risks of forfeiture, as applicable, in each case immediately prior to the completion of such
a dissolution or liquidation.
(c) Change of Control. Unless
otherwise provided in the Agreement evidencing an Award, in the event of a Change of Control, the Administrator may provide for
one or more of the following:
(i) the
acceleration of the exercisability of any outstanding Options or Stock Appreciation Rights (or portions thereof), the vesting and
payment of any Performance Awards (or portions thereof), or the lapsing of the risks of forfeiture on any Restricted Stock Awards
or Restricted Stock Units (or portion thereof);
(ii) the
complete termination of this Plan, the cancellation of outstanding Options or Stock Appreciation Rights (or portion thereof) not
exercised prior to a date specified by the Board (which date shall give Participants a reasonable period of time in which to exercise
such Option or Stock Appreciation Right prior to the effective date of such Change of Control), the cancellation of any Performance
Award (or portion thereof) and the cancellation of any Restricted Stock Awards or Restricted Stock Units (or portion thereof)
for which the risks of forfeiture have not lapsed;
(iii) that
the entity succeeding the Company by reason of such Change of Control, or the parent of such entity, shall assume or continue any
or all Awards (or portions thereof) outstanding immediately prior to the Change of Control or substitute for any or all such Awards
(or portions thereof) a substantially equivalent award with respect to the securities of such successor entity, as determined in
accordance with applicable laws and regulations; or
(iv) that
Participants holding outstanding Awards shall become entitled to receive, with respect to each share of Common Stock subject to
such Award (whether vested or unvested, as determined by the Administrator pursuant to subsection (c)(i) hereof) as of the effective
date of any such Change of Control, cash in an amount equal to (1) for Participants holding Options or Stock Appreciation Rights,
the excess of the Fair Market Value of such Common Stock on the date immediately preceding the effective date of such Change of
Control over the exercise price per share of Options or Stock Appreciation Rights, or (2) for Participants holding Awards other
than Options or Stock Appreciation Rights, the Fair Market Value of such Common Stock on the date immediately preceding the effective
date of such Change of Control.
The Administrator need not take the same
action with respect to all Awards (or portions thereof) or with respect to all Participants. In addition, the Administrator may
restrict the rights of or the applicability of this Section 15 to the extent necessary to comply with Section 16(b) of the Exchange
Act, the Internal Revenue Code or any other applicable law or regulation. The grant of an Award pursuant to the Plan shall not
limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital
or business structure or to merge, exchange or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business
or assets.
SECTION 16.
NONTRANSFERABILITY
(a) In General. Except as
expressly provided in the Plan or an Agreement, no Award shall be transferable by the Participant, in whole or in part, other than
by will or by the laws of descent and distribution. If the Participant shall attempt any transfer of any Award, such transfer shall
be void and the Award shall terminate.
(b) Nonqualified Stock Options.
Notwithstanding anything in this Section 16 to the contrary, the Administrator may, in its sole discretion, permit the Participant
to transfer any or all Nonqualified Stock Options to any member of the Participant’s “immediate family” as such
term is defined in Rule 16a-1(e) of the Exchange Act, or any successor provision, or to one or more trusts whose beneficiaries
are members of such Participant’s “immediate family” or partnerships in which such family members are the only
partners; provided, however, that the Participant cannot receive any consideration for the transfer and such transferred Nonqualified
Stock Option shall continue to be subject to the same terms and conditions as were applicable to such Nonqualified Stock Option
immediately prior to its transfer.
(c) Beneficiary Designation.
Each Participant may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively)
to whom any benefit under the Plan is to be paid in case of such Participant’s death before receipt of any or all of such
benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by the
Administrator, and will be effective only when filed by the Participant in writing with the Company during the Participant’s
lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the
Participant’s estate.
SECTION 17.
INVESTMENT PURPOSE AND SECURITIES
COMPLIANCE
No shares of Common
Stock shall be issued pursuant to the Plan unless and until there has been compliance, in the opinion of Company’s counsel,
with all applicable legal requirements, including without limitation, those relating to securities laws and stock exchange listing
requirements. As a condition to the issuance of Common Stock to Participant, the Administrator may require Participant to (a) represent
that the shares of Common Stock are being acquired for investment and not resale and to make such other representations as the
Administrator shall deem necessary or appropriate to qualify the issuance of the shares as exempt from the Securities Act of 1933
and any other applicable securities laws, and (b) represent that Participant shall not dispose of the shares of Common Stock in
violation of the Securities Act of 1933 or any other applicable securities laws.
As a further condition
to the grant of any Option or the issuance of Common Stock to a Participant, the Participant agrees to the following:
(a) In the event the Company advises
the Participant that it plans an underwritten public offering of its Common Stock in compliance with the Securities Act of 1933,
as amended, the Participant will execute any lock-up agreement the Company and the underwriter(s) deem necessary or appropriate,
in their sole discretion, in connection with such public offering.
(b) In the event the Company makes
any public offering of its securities and determines in its sole discretion that it is necessary to reduce the number of outstanding
Awards so as to comply with any state’s securities or Blue Sky law limitations with respect thereto, the Board of Directors
of the Company shall have the right (i) to accelerate the exercisability of any Award and the date on which such Award must be
exercised or remove the risks of forfeiture to which the Award is subject, provided that the Company gives Participant prior written
notice of such acceleration or removal, and (ii) to cancel any outstanding Awards (or portions thereof) which Participant does
not exercise prior to or contemporaneously with such public offering.
(c) In the event of a Change of
Control, Participant will comply with Rule 145 of the Securities Act of 1933 and any other restrictions imposed under other applicable
legal or accounting principles if Participant is an “affiliate” (as defined in such applicable legal and accounting
principles) at the time of the Change of Control, and Participant will execute any documents necessary to ensure compliance with
such rules.
The Company reserves
the right to place a legend on any stock certificate (or a notation on any book entry shares permitted by the Administrator) issued
in connection with an Award pursuant to the Plan to assure compliance with this Section 17.
The Company shall not
be required to register or maintain the registration of the Plan, any Award, or any Common Stock issued or issuable pursuant to
the Plan under the Securities Act of 1933 or any other applicable securities laws. If the Company is unable to obtain the authority
that the Company or its counsel deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall
not be liable for the failure to issue and sell Common Stock upon the exercise, vesting, or lapse of restrictions of forfeiture
of an Award unless and until such authority is obtained. A Participant shall not be eligible for the grant of an Award or the issuance
of Common Stock pursuant to an Award if such grant or issuance would violate any applicable securities law.
SECTION 18.
AMENDMENT OF THE PLAN
The Board may from
time to time, insofar as permitted by law, suspend or discontinue the Plan or revise or amend it in any respect; provided, however,
that no such suspension, termination, revision, or amendment, except as is authorized in Section 15, shall impair the terms and
conditions of any Award which is outstanding on the date of such suspension, termination, revision, or amendment to the material
detriment of the Participant without the consent of the Participant. Notwithstanding the foregoing, except as provided in Section
15 of the Plan or to the extent required by applicable law or regulation, the Board may not, without stockholder approval, revise
or amend the Plan to (i) materially increase the number of shares subject to the Plan, (ii) change the designation of Participants,
including the class of Employees, eligible to receive Awards, (iii) decrease the price at which Options or Stock Appreciation Rights
may be granted, (iv) cancel, regrant, repurchase for cash, or replace Options or Stock Appreciation Rights that have an exercise
price in excess of the Fair Market Value of the Common Stock with other awards, or amend the terms of outstanding Options or Stock
Appreciation Rights to reduce their exercise price, (v) materially increase the benefits accruing to Participants under the Plan,
or (vi) make any modification that will cause Incentive Stock Options to fail to meet the requirements of Code Section 422.
To the extent applicable,
the Plan and all Agreements shall be interpreted to be exempt from or comply with the requirements of Code Section 409A and, if
applicable, to comply with Code Section 422, in each case including the regulations, notices, and other guidance of general applicability
issued thereunder. Furthermore, notwithstanding anything in the Plan or any Agreement to the contrary, the Board may amend the
Plan or Agreement to the extent necessary or desirable to comply with such requirements without the consent of the Participant.
SECTION 19.
RIGHTS AND OBLIGATIONS ASSOCIATED
WITH AWARDS
(a) No Obligation to Exercise.
The granting of an Option or Stock Appreciation Right shall impose no obligation upon the Participant to exercise such Option or
Stock Appreciation Right.
(b) No Employment or Other Service
Rights. The granting of an Award hereunder shall not impose upon the Company or any Affiliate any obligation to retain the
Participant in its employ or service for any period.
(c) Unfunded Plan. Participants
shall have no right, title, or interest whatsoever in or to any particular assets of the Company or any of its Affiliates by reason
of the right to receive a benefit under the terms of the Plan. Nothing contained in the Plan, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any
Participant, beneficiary, legal representative, or any other person. To the extent that any person acquires a right to receive
shares of Common Stock or payments from the Company or any of its Affiliates under the Plan, such right shall be no greater than
the right of an unsecured general creditor of the Company or an Affiliate, as the case may be. All payments to be made hereunder
shall be paid from the general funds of the Company or an Affiliate, as the case may be. In its sole discretion, the Administrator
may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver the shares
of Common Stock or make payments in lieu of or with respect to Awards hereunder; provided, however, that the existence of such
trusts or other arrangements is consistent with the unfunded status of the Plan.
SECTION 20.
MISCELLANEOUS
(a) Issuance
of Shares. The Company is not required to issue or remove restrictions on shares of Common Stock granted pursuant to the
Plan until the Administrator determines that: (i) all conditions of the Award have been satisfied, (ii) all legal matters in connection
with the issuance have been satisfied, and (iii) the Participant has executed and delivered to the Company such representations
or agreements as the Administrator may consider appropriate, in its sole discretion, to satisfy the requirements of any applicable
law or regulation.
(b) Choice of
Law. The law of the state of Delaware shall govern all questions concerning the construction, validity, and interpretation
of the Plan, without regard to that state’s conflict of laws rules.
(c) Severability.
In the event that any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall
not affect the remaining provisions of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision
had not been included.
(d) No Duty to
Notify. The Company shall have no duty or obligation to any Participant to advise such Participant as to the time and manner
of exercising an Award or as to the pending termination or expiration of such Award. In addition, the Company has no duty or obligation
to minimize the tax consequences of an Award to the Participant.
Exhibit 10.2
INCENTIVE STOCK OPTION AGREEMENT
ARNO THERAPEUTICS, INC.
2016 EQUITY INCENTIVE PLAN
THIS AGREEMENT, made
effective as of this ____ day of ____________, 20__, by and between Arno Therapeutics, Inc., a Delaware corporation (the “Company”),
and __________________ (“Participant”).
W I T N E S S E T H:
WHEREAS, Participant
on the date hereof is an Employee of the Company or one of its Subsidiaries; and
WHEREAS, the Company
wishes to grant an incentive stock option to Participant to purchase shares of the Company’s Common Stock pursuant to the
Company’s 2016 Equity Incentive Plan (the “Plan”); and
WHEREAS, the Administrator
of the Plan has authorized the grant of an incentive stock option to Participant and has determined that, as of the effective date
of this Agreement, the fair market value of the Company’s Common Stock is $ per share;
NOW, THEREFORE, in
consideration of the premises and of the mutual covenants herein contained, the parties hereto agree as follows:
1. Grant of Option.
The Company hereby grants to Participant on the date set forth above (the “Date of Grant”), the right and option (the
“Option”) to purchase all or portions of an aggregate of (______) shares of Common Stock at a per share
price of $______ on the terms and conditions set forth herein, and subject to adjustment pursuant to Section 15 of the Plan.
This Option is intended to be an incentive stock option within the meaning of Section 422, or any successor provision, of the Internal
Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder, to the extent permitted under Code Section
422(d). However, to the extent this Option fails to satisfy the requirements of Code Section 422, the Option will be deemed to
be a nonqualified stock option.
2. Duration and Exercisability.
a. General. The term
during which this Option may be exercised shall terminate on the close of business on ____________, 20__, except as otherwise
provided in Paragraphs 2(b) through 2(e) below. This Option shall become exercisable according to the following schedule:
[INSERT VESTING SCHEDULE]
Once the Option becomes exercisable to
the extent of one hundred percent (100%) of the aggregate number of shares specified in Paragraph 1, Participant may continue to
exercise this Option under the terms and conditions of this Agreement until the termination of the Option as provided herein. If,
upon an exercise of this Option, Participant does not purchase the full number of shares which Participant is then entitled to
purchase, Participant may purchase upon any subsequent exercise prior to this Option’s termination such previously unpurchased
shares in addition to those Participant is otherwise entitled to purchase.
b. Termination of Employment
for Cause. If Participant’s employment with the Company or any Subsidiary is terminated for Cause, as defined below,
the unexercised portion of this Option shall immediately expire, and all rights of Participant under this Option shall be forfeited.
For purposes of this
Section 2, “Cause” shall mean (i) the conviction of Participant for the commission of any felony, (ii) the commission
by Participant of any crime involving moral turpitude (e.g., larceny, embezzlement) which results in harm to the business,
reputation, prospects or financial condition of the Company or any Affiliate, or (iii) a disciplinary discharge pursuant to the
terms of the Company’s management handbooks or policies as in effect at the time.
c. Termination of Employment
(other than for Cause, Disability or Death). If Participant’s employment with the Company or any Subsidiary is terminated
for any reason other than for Cause, disability or death, this Option shall completely terminate on the earlier of: (i) the close
of business on the three-month anniversary date of such termination of employment; and (ii) the expiration date of this Option
stated in Paragraph 2(a) above. In such period following the termination of Participant’s employment, this Option shall be
exercisable only to the extent the Option was exercisable on the vesting date immediately preceding such termination of employment,
but had not previously been exercised. To the extent this Option was not exercisable upon such termination of employment, or if
Participant does not exercise the Option within the time specified in this Paragraph 2(c), all rights of Participant under this
Option shall be forfeited.
d. Disability. If
Participant’s employment terminates because of disability (as defined in Code Section 22(e), or any successor provision),
this Option shall terminate on the earlier of: (i) the close of business on the twelve-month anniversary date of such termination
of employment; and (ii) the expiration date of this Option stated in Paragraph 2(a) above. In such period following the termination
of Participant’s employment, this Option shall be exercisable only to the extent the Option was exercisable on the vesting
date immediately preceding such termination of employment, but had not previously been exercised. To the extent this Option was
not exercisable upon such termination of employment, or if Participant does not exercise the Option within the time specified in
this Paragraph 2(d), all rights of Participant under this Option shall be forfeited.
e. Death. In the event
of Participant’s death, this Option shall terminate on the earlier of: (i) the close of business on the twelve-month anniversary
of the date of Participant’s death; and (ii) the expiration date of this Option stated in Paragraph 2(a) above. In such period
following Participant’s death, this Option may be exercised by the person or persons to whom Participant’s rights under
this Option shall have passed by Participant’s will or by the laws of descent and distribution only to the extent the Option
was exercisable on the vesting date immediately preceding the date of Participant’s death, but had not previously been exercised.
To the extent this Option was not exercisable upon the date of Participant’s death, or if such person or persons fail to
exercise this Option within the time specified in this Paragraph 2(e), all rights under this Option shall be forfeited.
3. Manner of Exercise.
a. General. The Option
may be exercised only by Participant (or other proper party in the event of death or incapacity), subject to the conditions of
the Plan and subject to such other administrative rules as the Administrator may deem advisable, by delivering within the option
period written notice of exercise to the Company at its principal office. The notice shall state the number of shares as to which
the Option is being exercised and shall be accompanied by payment in full of the option price for all shares designated in the
notice. The exercise of the Option shall be deemed effective upon receipt of such notice by the Company and upon payment that complies
with the terms of the Plan and this Agreement. The Option may be exercised with respect to any number or all of the shares as to
which it can then be exercised and, if partially exercised, may be so exercised as to the unexercised shares any number of times
during the option period as provided herein.
b. Form of Payment.
Subject to the approval of the Administrator, payment of the exercise price by Participant may be (i) in cash, or with a personal
check or certified check, (ii) by the transfer from the Participant to the Company of previously acquired unencumbered shares of
Common Stock, (iii) through the withholding of shares of Common Stock from the number of shares otherwise issuable upon the exercise
of the Option (e.g., a net share settlement), (iv) through broker-assisted cashless exercise if such exercise complies with
applicable securities laws and any insider trading policy of the Company, (v) such other form of payment as may be authorized by
the Administrator, or (vi) by a combination thereof.
In the event the Participant
elects to pay the exercise price in whole or in part with previously acquired shares of Common Stock or through a net share settlement,
the then-current Fair Market Value of the Common Stock delivered or withheld shall equal the total exercise price for the shares
being purchased in such manner. Participant acknowledges that, if the Participant elects to pay the exercise price with previously
acquired shares of Common Stock, a net share settlement or broker-assisted cashless exercise, then to the extent that any shares
surrendered, withheld or sold were acquired through the exercise by Participant of an incentive stock option (including this Option),
such surrender, withholding or sale may be considered a “disqualifying disposition” under Code Section 422.
For purposes of this
Agreement, “previously acquired” shares of Common Stock means shares of Common Stock which the Participant has owned
for at least six (6) months prior to the exercise of the Option (or for such period of time, if any, required by applicable accounting
principles).
c. Stock Transfer Records.
As soon as practicable after the effective exercise of all or any part of the Option, Participant shall be recorded on the stock
transfer books of the Company as the owner of the shares purchased, and the Company shall deliver to Participant one or more duly
issued stock certificates evidencing such ownership, or, if requested by Participant and permitted by the Company’s governing
documents, its designated agent, and applicable law, shall cause the purchased shares to be issued in book entry form. All requisite
original issue or transfer documentary stamp taxes shall be paid by the Company.
4. General Provisions.
a. Employment or Other Relationship;
Rights as Stockholder. This Agreement shall not confer on Participant any right with respect to the continuance of employment
or any other relationship with the Company or any of its Subsidiaries, nor will it interfere in any way with the right of the Company
to terminate such employment or relationship. Nothing in this Agreement shall be construed as creating an employment contract for
any specified term between Participant and the Company or any Affiliate. Participant shall have no rights as a stockholder with
respect to shares subject to this Option until such shares have been issued to Participant (or, if permitted, a book entry made)
upon exercise of this Option. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities
or other property), distributions or other rights for which the record date is prior to the date such shares are issued, except
as provided in Section 15 of the Plan.
b. 280G Limitations.
Notwithstanding anything in the Plan, this Agreement or in any other agreement, plan, contract or understanding entered into from
time to time between Participant and the Company or any of its Subsidiaries to the contrary (except
an agreement that expressly modifies or excludes the application of this Paragraph 4(b)), the exercisability of this Option shall
not be accelerated in connection with a Change of Control to the extent that such acceleration, taking into account all other rights,
payments and benefits to which Participant is entitled under any other plan or agreement, would constitute
a "parachute payment" or an "excess parachute payment" for purposes of Code Sections 280G and 4999, or
any successor provisions, and the regulations issued thereunder; provided, however, that the Administrator, in its sole discretion
and in accordance with applicable law, may modify or exclude the application of this Paragraph 4(b).
c. Securities Law Compliance.
The exercise of all or any parts of this Option shall only be effective at such time as the Company and its counsel shall have
determined that the issuance and delivery of Common Stock pursuant to such exercise will not violate any state or federal securities
or other laws. If the issuance of such shares upon exercise is not registered under a then-currently effective registration statement
under the Securities Act of 1933, as amended, the Participant may be required by the Company, as a condition of the effectiveness
of any exercise of this Option, to give any written assurances that are necessary or desirable in the opinion of the Company and
its counsel to ensure the issuance complies with applicable securities laws, including that all Common Stock to be acquired pursuant
to such exercise shall be held, until such time that such Common Stock is registered and freely tradable under applicable state
and federal securities laws, for Participant’s own account without a view to any further distribution thereof; that the certificates
(or, if permitted, book entries) for such shares shall bear an appropriate legend or notation to that effect; and that such shares
will be not transferred or disposed of except in compliance with applicable state and federal securities laws.
d. Extension of Expiration
Date. In the event that the exercise of this Option would be prohibited solely because the issuance of shares of
Common Stock pursuant to the Option would violate applicable securities laws, the Administrator may, in its sole discretion and
in accordance with Code Section 409A and the regulations, notices and other guidance of general applicability thereunder, permit
the expiration of the Option to be tolled during such time as its exercise is so prohibited; provided, however, that
the expiration date may not thereby be extended more than 30 days after the date the exercise first would no longer violate applicable
securities laws. Notwithstanding anything in the Plan or this Agreement to the contrary, if the expiration date is extended
in accordance with this Paragraph 4(d) beyond a term of ten years from the Date of Grant, this Option shall be deemed to be a nonqualified
stock option.
e. Mergers, Recapitalizations,
Stock Splits, Etc. Except as otherwise specifically provided in any employment, change of control, severance or similar
agreement executed by the Participant and the Company, pursuant and subject to Section 15 of the Plan, certain changes in the number
or character of the Common Stock of the Company (through sale, merger, consolidation, exchange, reorganization, divestiture (including
a spin-off), liquidation, recapitalization, stock split, stock dividend or otherwise) shall result in an adjustment, reduction
or enlargement, as appropriate, in Participant’s rights with respect to any unexercised portion of the Option (i.e.,
Participant shall have such “anti-dilution” rights under the Option with respect to such events, but, subject to the
Administrator’s discretion, shall not have “preemptive” rights).
f. Shares Reserved.
The Company shall at all times during the term of this Agreement reserve and keep available such number of shares as will be sufficient
to satisfy the requirements of this Agreement.
g. Withholding
Taxes. To permit the Company to comply with all applicable federal and state income tax laws or regulations, the Company
may take such action as it deems appropriate to ensure that, if necessary, all applicable federal and state payroll, income, or
other taxes are withheld from any amounts payable by the Company to the Participant. If the Company is unable to withhold such
federal and state taxes, for whatever reason, the Participant hereby agrees to pay to the Company an amount equal to the amount
the Company would otherwise be required to withhold under federal or state law. Subject to such rules as the Administrator may
adopt, the Administrator may, in its sole discretion, permit Participant to satisfy such withholding tax obligations, in whole
or in part by: (i) delivering shares of Common Stock, or (ii) electing to have the Company withhold shares of Common Stock otherwise
issuable to the Participant as a result of the exercise of the Option. In either case, such shares shall have a Fair Market Value,
as of the date the amount of tax to be withheld is determined under applicable tax law, equal to the statutory minimum amount required
to be withheld for tax purposes. Participant acknowledges that, if the shares delivered or withheld to satisfy such withholding
tax obligations were acquired through the exercise of an incentive stock option (including this Option), such delivery or withholding
of such shares may result in a “disqualifying disposition” under Code Section 422. The Participant’s request
to deliver shares or to have shares withheld for purposes of such withholding tax obligations shall be made on or before the date
that triggers such obligations, or, if later, the date that the amount of tax to be withheld is determined under applicable tax
law, and shall be irrevocable on such date if approved by the Administrator. Participant’s request shall comply with such
rules as the Administrator may adopt to assure compliance with Rule 16b-3, if applicable.
h. Nontransferability.
During the lifetime of Participant, the Option shall be exercisable only by Participant or by the Participant’s guardian
or other legal representative, and shall not be assignable or transferable by Participant, in whole or in part, other than by will
or by the laws of descent and distribution.
i. 2016 Equity Incentive Plan.
The Option evidenced by this Agreement is granted pursuant to the Plan, a copy of which Plan has been made available to Participant
and is hereby incorporated into this Agreement. This Agreement is subject to and in all respects limited and conditioned as provided
in the Plan. All capitalized terms in this Agreement not defined herein shall have the meanings ascribed to them in the Plan. The
Plan governs this Option and, in the event of any questions as to the construction of this Agreement or in the event of a conflict
between the Plan and this Agreement, the Plan shall govern, except as the Plan otherwise provides.
j. Lockup Period Limitation.
Participant agrees that in the event the Company advises the Participant that it plans an underwritten public offering of its Common
Stock in compliance with the Securities Act of 1933, as amended, the Participant will execute any lock-up agreement the Company
and the underwriter(s) deem necessary or appropriate, in their sole discretion, in connection with such public offering.
k. Blue Sky Limitation.
Notwithstanding anything in this Agreement to the contrary, in the event the Company makes any public offering of its securities
and it is determined that it is necessary to reduce the number of issued but unexercised stock purchase rights so as to comply
with any state securities or Blue Sky law limitations with respect thereto, and such determination is affirmed by the Board of
Directors, unless the Board of Directors determines otherwise, (i) the exercisability of this Option and the date on which this
Option must be exercised shall be accelerated, provided that the Company agrees to give Participant 15 days’ prior written
notice of such acceleration; and (ii) any portion of this Option or any other option granted to Participant pursuant to the Plan
which is not exercised prior to or contemporaneously with such public offering shall be canceled. Notice shall be deemed given
when delivered personally or when deposited in the United States mail, first class postage prepaid and addressed to Participant
at the address of Participant on file with the Company.
l. Affiliates. Participant
agrees that, if Participant is an “affiliate” of the Company or any Affiliate (as defined in applicable legal and accounting
principles) at the time of a Change of Control (as defined in Section 1(f) of the Plan), Participant will comply with all requirements
of Rule 145 of the Securities Act of 1933, as amended, and the requirements of such other applicable legal or accounting principles,
and will execute any documents necessary to ensure such compliance.
m. Stock Legend. The
Administrator may require that the certificates (or, if permitted, book entries) for any shares of Common Stock purchased by Participant
(or, in the case of death, Participant’s successors) shall bear an appropriate legend or notation to reflect the restrictions
of Paragraph 4(c) and Paragraphs 4(j) through 4(l) of this Agreement; provided, however, that failure to so endorse any of such
certificates shall not render invalid or inapplicable Paragraph 4(c) or Paragraphs 4(j) through 4(l).
n. Scope of Agreement.
This Agreement shall bind and inure to the benefit of the Company and its successors and assigns and Participant and any successor
or successors of Participant permitted by Paragraph 2 or Paragraph 4(h) above. This Award is expressly subject to all terms and
conditions contained in the Plan and in this Agreement and Participant’s failure to execute this Agreement shall not relieve
Participant from complying with such terms and conditions.
o. Choice of Law.
The law of the state of Delaware shall govern all questions concerning the construction, validity, and interpretation of this Plan,
without regard to that state’s conflict of laws rules.
p. Severability. In
the event that any provision of this Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall
not affect the remaining provisions of this Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision
had not been included.
q. Arbitration. Any
dispute arising out of or relating to this Agreement or the alleged breach of it, or the making of this Agreement, including claims
of fraud in the inducement, shall be discussed between the disputing parties in a good faith effort to arrive at a mutual settlement
of any such controversy. If, notwithstanding, such dispute cannot be resolved, such dispute shall be settled by binding arbitration.
Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitrator shall
be a retired state or federal judge or an attorney who has practiced securities or business litigation for at least 10 years. If
the parties cannot agree on an arbitrator within 20 days, any party may request that the chief judge of the District Court of [_______]
County, select an arbitrator. Arbitration will be conducted pursuant to the provisions of this Agreement, and the commercial arbitration
rules of the American Arbitration Association, unless such rules are inconsistent with the provisions of this Agreement. Limited
civil discovery shall be permitted for the production of documents and taking of depositions. Unresolved discovery disputes may
be brought to the attention of the arbitrator who may dispose of such dispute. The arbitrator shall have the authority to award
any remedy or relief that a court of this state could order or grant; provided, however, that punitive or exemplary damages shall
not be awarded. The arbitrator may award to the prevailing party, if any, as determined by the arbitrator, all of its costs and
fees, including the arbitrator’s fees, administrative fees, travel expenses, out-of-pocket expenses and reasonable attorneys’
fees. Unless otherwise agreed by the parties, the place of any arbitration proceedings shall be [___________] County, [_____________].
***Signature Page Follows***
ACCORDINGLY, the parties
hereto have caused this Agreement to be executed on the day and year first above written.
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[Incentive Stock Option Agreement Signature
Page]
Exhibit 10.3
NONQUALIFIED STOCK OPTION AGREEMENT
ARNO THERAPEUTICS, INC.
2016 EQUITY INCENTIVE PLAN
THIS AGREEMENT, made
effective as of this day of ___________, 20__, by and between Arno Therapeutics, Inc., a Delaware corporation (the “Company”),
and _________________ (“Participant”).
W I T N E S S E T H:
WHEREAS, Participant
on the date hereof is an Employee, Director of, or Consultant to the Company or one of its Subsidiaries; and
WHEREAS, the Company
wishes to grant a nonqualified stock option to Participant to purchase shares of the Company’s Common Stock pursuant to the
Company’s 2016 Equity Incentive Plan (the “Plan”); and
WHEREAS, the Administrator
of the Plan has authorized the grant of a nonqualified stock option to Participant and has determined that, as of the effective
date of this Agreement, the fair market value of the Company’s Common Stock is $ per share;
NOW, THEREFORE, in
consideration of the premises and of the mutual covenants herein contained, the parties hereto agree as follows:
1. Grant of Option.
The Company hereby grants to Participant on the date set forth above (the “Date of Grant”), the right and option (the
“Option”) to purchase all or portions of an aggregate of (________) shares of Common Stock at a per share
price of $______ on the terms and conditions set forth herein, and subject to adjustment pursuant to Section 16 of the Plan.
This Option is a nonqualified stock option and will not be treated as an incentive stock option, as defined under Section 422,
or any successor provision, of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder.
2. Duration and Exercisability.
a. General. The term
during which this Option may be exercised shall terminate at the close of business on __________, 20__, except as otherwise
provided in Paragraphs 2(b) through 2(e) below. This Option shall become exercisable according to the following schedule:
[INSERT VESTING SCHEDULE]
Once the Option becomes exercisable to
the extent of one hundred percent (100%) of the aggregate number of shares specified in Paragraph 1, Participant may continue to
exercise this Option under the terms and conditions of this Agreement until the termination of the Option as provided herein. If,
upon an exercise of this Option, Participant does not purchase the full number of shares which Participant is then entitled to
purchase, Participant may purchase upon any subsequent exercise prior to this Option’s termination such previously unpurchased
shares in addition to those Participant is otherwise entitled to purchase.
b. Termination of Employment
or Service Relationship for Cause. If Participant ceases to be [an Employee] [a Consultant] [a Director] of the
Company or any Subsidiary for Cause, as defined below, the unexercised portion of this Option shall immediately expire, and all
rights of Participant under this Option shall be forfeited.
For purposes of this
Section 2, “Cause” shall mean (i) the conviction of Participant for the commission of any felony, (ii) the commission
by Participant of any crime involving moral turpitude (e.g., larceny, embezzlement) which results in harm to the business,
reputation, prospects or financial condition of the Company or any Affiliate, or (iii) a disciplinary discharge pursuant to the
terms of the Company’s management handbooks or policies as in effect at the time.
c. Termination of Employment
or Service Relationship (other than for Cause, Disability or Death). If Participant ceases to be [an Employee] [a Consultant]
[a Director] of the Company or any Subsidiary for any reason other than for Cause, disability or death, this Option shall completely
terminate on the earlier of: (i) the close of business on the three-month anniversary date of the Participant’s termination;
and (ii) the expiration date of this Option stated in Paragraph 2(a) above. In such period following the Participant’s termination,
this Option shall be exercisable only to the extent the Option was exercisable on the vesting date immediately preceding such termination
but had not previously been exercised. To the extent this Option was not exercisable upon such termination, or if Participant does
not exercise the Option within the time specified in this Paragraph 2(c), all rights of Participant under this Option shall be
forfeited.
d. Disability. If
Participant ceases to be [an Employee] [a Consultant] [a Director] of the Company or any Subsidiary because of disability
(as defined in Code Section 22(e), or any successor provision), this Option shall terminate on the earlier of: (i) the close of
business on the twelve-month anniversary date of the Participant’s termination; and (ii) the expiration date of this Option
stated in Paragraph 2(a) above. In such period following the Participant’s termination, this Option shall be exercisable
only to the extent the Option was exercisable on the vesting date immediately preceding such termination but had not previously
been exercised. To the extent this Option was not exercisable upon such termination, or if Participant does not exercise the Option
within the time specified in this Paragraph 2(d), all rights of Participant under this Option shall be forfeited.
e. Death. In the event
of Participant’s death, this Option shall terminate on the earlier of: (i) the close of business on the twelve-month anniversary
of the date of Participant’s death; and (ii) the expiration date of this Option stated in Paragraph 2(a) above. In such period
following Participant’s death, this Option may be exercised by the person or persons to whom Participant’s rights under
this Option shall have passed by Participant’s will or by the laws of descent and distribution only to the extent the Option
was exercisable on the vesting date immediately preceding the date of Participant’s death, but had not previously been exercised.
To the extent this Option was not exercisable upon the date of Participant’s death, or if such person or persons fail to
exercise this Option within the time specified in this Paragraph 2(e), all rights under this Option shall be forfeited.
3. Manner of Exercise.
a. General. The Option
may be exercised only by Participant (or other proper party in the event of death or incapacity), subject to the conditions of
the Plan and subject to such other administrative rules as the Administrator may deem advisable, by delivering within the option
period written notice of exercise to the Company at its principal office. The notice shall state the number of shares as to which
the Option is being exercised and shall be accompanied by payment in full of the option price for all shares designated in the
notice. The exercise of the Option shall be deemed effective upon receipt of such notice by the Company and upon payment that complies
with the terms of the Plan and this Agreement. The Option may be exercised with respect to any number or all of the shares as to
which it can then be exercised and, if partially exercised, may be so exercised as to the unexercised shares any number of times
during the option period as provided herein.
b. Form of Payment.
Subject to the approval of the Administrator, payment of the exercise price by Participant may be (i) in cash, or with a personal
check or certified check, (ii) by the transfer from the Participant to the Company of previously acquired unencumbered shares of
Common Stock, (iii) through the withholding of shares of Common Stock from the number of shares otherwise issuable upon the exercise
of the Option (e.g., a net share settlement), (iv) through broker-assisted cashless exercise if such exercise complies with
applicable securities laws and any insider trading policy of the Company, (v) such other form of payment as may be authorized by
the Administrator, or (vi) by a combination thereof. In the event the Participant elects to pay the exercise price in whole or
in part with previously acquired shares of Common Stock or through a net share settlement, the then-current Fair Market Value of
the Common Stock delivered or withheld shall equal the total exercise price for the shares being purchased in such manner. For
purposes of this Agreement, “previously acquired shares of Common Stock” means shares of Common Stock which the Participant
has owned for at least six (6) months prior to the exercise of the option (or for such period of time, if any, required by applicable
accounting principles).
c. Stock Transfer Records.
As soon as practicable after the effective exercise of all or any part of the Option, Participant shall be recorded on the stock
transfer books of the Company as the owner of the shares purchased, and the Company shall deliver to Participant one or more duly
issued stock certificates evidencing such ownership, or, if requested by the Participant and permitted by the Company’s governing
documents, its designated agent, and applicable law, shall cause the purchased shares to be issued in book-entry form. All requisite
original issue or transfer documentary stamp taxes shall be paid by the Company.
4. General Provisions.
a. Employment or Other Relationship;
Rights as Stockholder. This Agreement shall not confer on Participant any right with respect to the continuance of employment
or any other relationship with the Company or any of its Subsidiaries, nor will it interfere in any way with the right of the Company
to terminate such employment or relationship. Nothing in this Agreement shall be construed as creating an employment or service
contract for any specified term between Participant and the Company or any Affiliate. Participant shall have no rights as a stockholder
with respect to shares subject to this Option until such shares have been issued to Participant (or, if permitted, a book entry
made) upon exercise of this Option. No adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities
or other property), distributions or other rights for which the record date is prior to the date such shares are issued, except
as provided in Section 15 of the Plan.
b. 280G Limitations.
Notwithstanding anything in the Plan, this Agreement or in any other agreement, plan, contract or understanding entered into from
time to time between Participant and the Company or any of its Subsidiaries to the contrary (except an agreement that expressly
modifies or excludes the application of this Paragraph 4(b)), the exercisability of this Option shall not be accelerated
in connection with a Change of Control to the extent that such acceleration, taking into account all other rights, payments and
benefits to which Participant is entitled under any other plan or agreement, would constitute a "parachute payment"
or an "excess parachute payment" for purposes of Code Sections 280G and 4999, or any successor provisions, and the
regulations issued thereunder; provided, however, that the Administrator, in its sole discretion and in accordance with applicable
law, may modify or exclude the application of this Paragraph 4(b).
c. Securities Law Compliance.
The exercise of all or any parts of this Option shall only be effective at such time the Company and its counsel shall have determined
that the issuance and delivery of Common Stock pursuant to such exercise will not violate any state or federal securities or other
laws. If the issuance of such shares upon exercise is not registered under a then-currently effective registration statement under
the Securities Act of 1933, as amended, the Participant may be required by the Company, as a condition of the effectiveness of
any exercise of this Option, to give any written assurances that are necessary or desirable in the opinion of the Company and its
counsel to ensure the issuance complies with applicable securities laws, including that all Common Stock to be acquired pursuant
to such exercise shall be held, until such time that such Common Stock is registered and freely tradable under applicable state
and federal securities laws, for Participant’s own account without a view to any further distribution thereof; that the certificates
(or, if permitted, book entries) for such shares shall bear an appropriate legend or notation to that effect; and that such shares
will be not transferred or disposed of except in compliance with applicable state and federal securities laws.
d. Extension of Expiration
Date. In the event that the exercise of this Option would be prohibited solely because the issuance of shares of
Common Stock pursuant to the Option would violate applicable securities laws, the Administrator may, in its sole discretion and
in accordance with Code Section 409A and the regulations, notices and other guidance of general applicability thereunder, permit
the expiration of the Option to be tolled during such time as its exercise is so prohibited; provided, however, that
the expiration date may not thereby be extended more than 30 days after the date the exercise first would no longer violate applicable
securities laws.
e. Mergers, Recapitalizations,
Stock Splits, Etc. Except as otherwise specifically provided in any employment, change of control, severance or similar
agreement executed by the Participant and the Company, pursuant and subject to Section 15 of the Plan, certain changes in the number
or character of the Common Stock of the Company (through sale, merger, consolidation, exchange, reorganization, divestiture (including
a spin-off), liquidation, recapitalization, stock split, stock dividend or otherwise) shall result in an adjustment, reduction
or enlargement, as appropriate, in Participant’s rights with respect to any unexercised portion of the Option (i.e.,
Participant shall have such “anti-dilution” rights under the Option with respect to such events, but, subject to the
Administrator’s discretion, shall not have “preemptive” rights).
f. Shares Reserved.
The Company shall at all times during the term of this Agreement reserve and keep available such number of shares as will be sufficient
to satisfy the requirements of this Agreement.
g. Withholding
Taxes. To permit the Company to comply with all applicable federal and state income tax laws or regulations, the Company
may take such action as it deems appropriate to ensure that, if necessary, all applicable federal and state payroll, income, or
other taxes are withheld from any amounts payable by the Company to the Participant. If the Company is unable to withhold such
federal and state taxes, for whatever reason, the Participant hereby agrees to pay to the Company an amount equal to the amount
the Company would otherwise be required to withhold under federal or state law. Subject to such rules as the Administrator may
adopt, the Administrator may, in its sole discretion, permit Participant to satisfy such withholding tax obligations, in whole
or in part by: (i) delivering shares of Common Stock, or (ii) electing to have the Company withhold shares of Common Stock otherwise
issuable to the Participant as a result of the exercise of the Option. In either case, such shares shall have a Fair Market Value,
as of the date the amount of tax to be withheld is determined under applicable tax law, equal to the statutory minimum amount required
to be withheld for tax purposes. The Participant’s request to deliver shares or to have shares withheld for purposes of such
withholding tax obligations shall be made on or before the date that triggers such obligations, or, if later, the date that the
amount of tax to be withheld is determined under applicable tax law, and shall be irrevocable on such date if approved by the Administrator.
Participant’s request shall comply with such rules as the Administrator may adopt to assure compliance with Rule 16b-3, if
applicable.
h. Nontransferability.
Unless otherwise permitted by the Administrator in its sole discretion, during the lifetime of Participant, the Option shall be
exercisable only by Participant or by the Participant’s guardian or other legal representative, and shall not be assignable
or transferable by Participant, in whole or in part, other than by will or by the laws of descent and distribution.
i. 2016 Equity Incentive Plan.
The Option evidenced by this Agreement is granted pursuant to the Plan, a copy of which Plan has been made available to Participant
and is hereby incorporated into this Agreement. This Agreement is subject to and in all respects limited and conditioned as provided
in the Plan. All capitalized terms in this Agreement not defined herein shall have the meanings ascribed to them in the Plan. The
Plan governs this Option and, in the event of any questions as to the construction of this Agreement or in the event of a conflict
between the Plan and this Agreement, the Plan shall govern, except as the Plan otherwise provides.
j. Lockup Period Limitation.
Participant agrees that in the event the Company advises the Participant that it plans an underwritten public offering of its Common
Stock in compliance with the Securities Act of 1933, as amended, the Participant will execute any lock-up agreement the Company
and the underwriter(s) deem necessary or appropriate, in their sole discretion, in connection with such public offering.
k. Blue Sky Limitation.
Notwithstanding anything in this Agreement to the contrary, in the event the Company makes any public offering of its securities
and it is determined that it is necessary to reduce the number of issued but unexercised stock purchase rights so as to comply
with any state securities or Blue Sky law limitations with respect thereto, and such determination is affirmed by the Board of
Directors, unless the Board of Directors determines otherwise, (i) the exercisability of this Option and the date on which this
Option must be exercised shall be accelerated, provided that the Company agrees to give Participant 15 days’ prior written
notice of such acceleration, and (ii) any portion of this Option or any other option granted to Participant pursuant to the Plan
which is not exercised prior to or contemporaneously with such public offering shall be canceled. Notice shall be deemed given
when delivered personally or when deposited in the United States mail, first class postage prepaid and addressed to Participant
at the address of Participant on file with the Company.
l. Affiliates. Participant
agrees that, if Participant is an “affiliate” of the Company or any Affiliate (as defined in applicable legal and accounting
principles) at the time of a Change of Control (as defined in Section 1(f) of the Plan), Participant will comply with all requirements
of Rule 145 of the Securities Act of 1933, as amended, and the requirements of such other applicable legal or accounting principles,
and will execute any documents necessary to ensure such compliance.
m. Stock Legend. The
Administrator may require that the certificates (or, if permitted, book entries) for any shares of Common Stock purchased by Participant
(or, in the case of death, Participant’s successors) shall bear an appropriate legend or notation to reflect the restrictions
of Paragraph 4(c) and Paragraphs 4(j) through 4(l) of this Agreement; provided, however, that failure to so endorse any of such
certificates shall not render invalid or inapplicable Paragraph 4(c) or Paragraphs 4(j) through 4(l).
n. Scope of Agreement.
This Agreement shall bind and inure to the benefit of the Company and its successors and assigns and Participant and any successor
or successors of Participant permitted by Paragraph 2 or Paragraph 4(h) above. This Award is expressly subject to all terms and
conditions contained in the Plan and in this Agreement, and Participant’s failure to execute this Agreement shall not relieve
Participant from complying with such terms and conditions.
o. Choice of Law.
The law of the state of Delaware shall govern all questions concerning the construction, validity, and interpretation of this Plan,
without regard to that state’s conflict of laws rules.
p. Severability. In
the event that any provision of this Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall
not affect the remaining provisions of this Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision
had not been included.
q. Arbitration. Any
dispute arising out of or relating to this Agreement or the alleged breach of it, or the making of this Agreement, including claims
of fraud in the inducement, shall be discussed between the disputing parties in a good faith effort to arrive at a mutual settlement
of any such controversy. If, notwithstanding, such dispute cannot be resolved, such dispute shall be settled by binding arbitration.
Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitrator shall
be a retired state or federal judge or an attorney who has practiced securities or business litigation for at least 10 years. If
the parties cannot agree on an arbitrator within 20 days, any party may request that the chief judge of the District Court of [_______]
County, select an arbitrator. Arbitration will be conducted pursuant to the provisions of this Agreement, and the commercial arbitration
rules of the American Arbitration Association, unless such rules are inconsistent with the provisions of this Agreement. Limited
civil discovery shall be permitted for the production of documents and taking of depositions. Unresolved discovery disputes may
be brought to the attention of the arbitrator who may dispose of such dispute. The arbitrator shall have the authority to award
any remedy or relief that a court of this state could order or grant; provided, however, that punitive or exemplary damages shall
not be awarded. The arbitrator may award to the prevailing party, if any, as determined by the arbitrator, all of its costs and
fees, including the arbitrator’s fees, administrative fees, travel expenses, out-of-pocket expenses and reasonable attorneys’
fees. Unless otherwise agreed by the parties, the place of any arbitration proceedings shall be [___________] County, [_____________].
ACCORDINGLY, the parties
hereto have caused this Agreement to be executed on the day and year first above written.
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Exhibit 10.4
RESTRICTED STOCK AGREEMENT
ARNO THERAPEUTICS, INC.
2016 EQUITY INCENTIVE PLAN
THIS AGREEMENT is made
effective as of this ____ day of , 20__, by and between Arno Therapeutics, Inc., a Delaware corporation (the “Company”),
and _________________________ (“Participant”).
W I T N E S S E T H:
WHEREAS, Participant
is, on the date hereof, an Employee, Director of or a Consultant to the Company or one of its Subsidiaries; and
WHEREAS, the Company
wishes to grant a restricted stock award to Participant for shares of the Company’s Common Stock pursuant to the Company’s
2016 Equity Incentive Plan (the “Plan”); and
WHEREAS, the Administrator
of the Plan has authorized the grant of a restricted stock award to Participant;
NOW, THEREFORE, in
consideration of the premises and of the mutual covenants herein contained, the parties hereto agree as follows:
1. Grant
of Restricted Stock Award. The Company hereby grants to Participant on the date set forth above a restricted stock
award (the “Award”) for ____________ (__________) shares of Common Stock on the terms and conditions set forth
herein, which shares are subject to adjustment pursuant to Section 15 of the Plan. The Company shall cause to be issued one
or more stock certificates representing such shares of Common Stock in Participant’s name, and may deliver such stock
certificate to Participant or may hold each such certificate until such time as the risk of forfeiture and other transfer
restrictions set forth in this Agreement have lapsed with respect to the shares represented by the certificate. The Company
may also place a legend on such certificates describing the risks of forfeiture and other transfer restrictions set forth in
this Agreement providing for the return from Participant, if applicable, and cancellation of such certificates if the shares
of Common Stock are forfeited as provided in Section 2 below. Until such risks of forfeiture have lapsed or the shares
subject to this Award have been forfeited pursuant to Section 2 below, Participant shall be entitled to vote the shares
represented by such stock certificates and shall receive all dividends attributable to such shares, but Participant shall not
have any other rights as a stockholder with respect to such shares.
2. Vesting of Restricted Stock.
a. General. The shares
of Stock subject to this Award shall remain forfeitable until the risks of forfeiture lapse according to the following schedule:
Specified
Date or Achievement
(each, a “Vesting Time”) |
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Number
of Shares as to which
Risks of Forfeiture Lapse |
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| [The date and time of day or certification of achievement procedures should be approved when award is granted and specified in this section] |
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[to be completed] |
b. Termination of Relationship.
If Participant ceases to be [an Employee] [a Consultant] [a Director] of the Company or any Subsidiary for any reason, including
Participant’s voluntary resignation, retirement, death or disability, Participant shall immediately forfeit all shares of
Stock subject to this Award as to which the risks of forfeiture have not lapsed.
3. General Provisions.
a. Employment or Other Relationship.
This Agreement shall not confer on Participant any right with respect to continuance of employment or other relationship by the
Company or any of its Affiliates, nor will it interfere in any way with the right of the Company to terminate such employment or
relationship. Nothing in this Agreement shall be construed as creating an employment or service contract for any specified term
between Participant and the Company or any Affiliate.
b. 280G Limitations.
Notwithstanding anything in the Plan, this Agreement or in any other agreement, plan, contract or understanding entered into from
time to time between Participant and the Company or any of its Subsidiaries to the contrary (except
an agreement that expressly modifies or excludes the application of this Paragraph 4(b)), the lapse of the risks of forfeiture
of this Award shall not be accelerated in connection with a Change of Control to the extent that such acceleration, taking
into account all other rights, payments and benefits to which Participant is entitled under any other plan or agreement, would constitute
a "parachute payment" or an "excess parachute payment" for purposes of Code Sections 280G and 4999, or
any successor provisions, and the regulations issued thereunder; provided, however, that the Administrator, in its sole discretion
and in accordance with applicable law, may modify or exclude the application of this Paragraph 4(b).
c. Securities Law Compliance.
Participant shall not transfer or otherwise dispose of the shares of Common Stock received pursuant to this Agreement until such
time as the Company and its counsel shall have determined that such transfer or other disposition will not violate any state or
federal securities laws. Participant may be required by the Company, as a condition of the effectiveness of this Award, to give
any written assurances that are necessary or desirable in the opinion of the Company and its counsel to ensure the issuance complies
with applicable securities laws, including that all Common Stock subject to this Agreement shall be held, until such time that
such Common Stock is registered and freely tradable under applicable state and federal securities laws, for Participant’s
own account without a view to any further distribution thereof; that the certificates (or, if permitted, book entries) for such
shares shall bear an appropriate legend or notation to that effect; and that such shares will be not transferred or disposed of
except in compliance with applicable state and federal securities laws.
d. Mergers, Recapitalizations,
Stock Splits, Etc. Except as otherwise specifically provided in any employment, change of control, severance or similar
agreement executed by Participant and the Company, pursuant and subject to Section 15 of the Plan, certain changes in the number
or character of the shares of Common Stock of the Company (through sale, merger, consolidation, exchange, reorganization, divestiture
(including a spin-off), liquidation, recapitalization, stock split, stock dividend, or otherwise) shall result in an adjustment,
reduction, or enlargement, as appropriate, in the number of shares subject to this Award. Any additional shares that are credited
pursuant to such adjustment shall be subject to the same restrictions as are applicable to the shares with respect to which the
adjustment relates.
e. Shares Reserved.
The Company shall at all times during the term of this Agreement reserve and keep available such number of shares as will be sufficient
to satisfy the requirements of this Agreement.
f. Withholding Taxes.
To permit the Company to comply with all applicable federal and state income tax laws or regulations, the Company may take such
action as it deems appropriate to ensure that, if necessary, all applicable federal and state payroll, income or other taxes attributable
to this Award are withheld from any amounts payable by the Company to Participant. If the Company is unable to withhold such federal
and state taxes, for whatever reason, Participant hereby agrees to pay to the Company an amount equal to the amount the Company
would otherwise be required to withhold under federal or state law prior to the transfer of any certificates for the shares of
Stock subject to this Award. Subject to such rules as the Administrator may adopt, the Administrator may, in its sole discretion,
permit Participant to satisfy such withholding tax obligations, in whole or in part, by delivering shares of the Company’s
Common Stock, including shares of Common Stock received pursuant to this Award, having a Fair Market Value, as of the date the
amount of tax to be withheld is determined under applicable tax law, equal to the statutory minimum amount required to be withheld
for tax purposes. In no event may the Participant deliver shares having a Fair Market Value in excess of such statutory minimum
required tax withholding. Participant’s election to deliver shares for purposes of such withholding tax obligations shall
be made on or before the date that triggers such obligations or, if later, the date that the amount of tax to be withheld is determined
under applicable tax law, and shall be irrevocable as of such date if approved by the Administrator. Participant’s request
shall comply with such rules as the Administrator may adopt to assure compliance with Rule 16b-3, if applicable.
g. Nontransferability. No
portion of this Award for which the risks of forfeiture have not lapsed may be assigned or transferred, in whole or in part, other
than by will or by the laws of descent and distribution.
h. 2016 Equity Incentive Plan.
The Award evidenced by this Agreement is granted pursuant to the Plan, a copy of which Plan has been made available to Participant
and is hereby incorporated into this Agreement. This Agreement is subject to and in all respects limited and conditioned as provided
in the Plan. All capitalized terms in this Agreement not defined herein shall have the meanings ascribed to them in the Plan. The
Plan governs this Award and, in the event of any questions as to the construction of this Agreement or in the event of a conflict
between the Plan and this Agreement, the Plan shall govern, except as the Plan otherwise provides.
i. Lockup Period Limitation.
Participant agrees that in the event the Company advises Participant that it plans an underwritten public offering of its Common
Stock in compliance with the Securities Act of 1933, as amended, the Participant will execute any lock-up agreement the Company
and the underwriter(s) deem necessary or appropriate, in their sole discretion, in connection with such public offering.
j. Blue Sky Limitation.
Notwithstanding anything in this Agreement to the contrary, in the event the Company makes any public offering of its securities
and determines, in its sole discretion, that it is necessary to reduce the number of Restricted Stock Awards so as to comply with
any state securities or Blue Sky law limitations with respect thereto, the Board of Directors of the Company shall remove the
risks of forfeiture (in full or in part) to which this Award is subject, provided that the Company gives Participant 15 days’
prior written notice of such removal. Notice shall be deemed given when delivered personally or when deposited in the United States
mail, first class postage prepaid and addressed to Participant at the address of Participant on file with the Company.
k. Affiliates. Participant
agrees that, if Participant is an “affiliate” of the Company or any Affiliate (as defined in applicable legal and accounting
principles) at the time of a Change of Control (as defined in Section 1(f) of the Plan), Participant will comply with all requirements
of Rule 145 of the Securities Act of 1933, as amended, and the requirements of such other applicable legal or accounting principles,
and will execute any documents necessary to ensure such compliance.
l. Stock Legend. The
Administrator may require that the certificates (or, if permitted, book entries) for any shares of Common Stock issued to Participant
(or, in the case of death, Participant’s successors) shall bear an appropriate legend or notation to reflect the restrictions
of Paragraph 3(c) and Paragraphs 3(i) through 3(k) of this Agreement; provided, however, that failure to so endorse any of such
certificates shall not render invalid or inapplicable Paragraph 3(c) or Paragraph 3(i) through 3(k).
m. Scope of Agreement.
This Agreement shall bind and inure to the benefit of the Company and its successors and assigns and of Participant and any successors
of Participant. This Award is expressly subject to all terms and conditions contained in the Plan and in this Agreement, and Participant’s
failure to execute this Agreement shall not relieve Participant from complying with such terms and conditions.
n. Choice of Law.
The law of the state of Delaware shall govern all questions concerning the construction, validity, and interpretation of this Plan,
without regard to that state’s conflict of laws rules.
o. Severability. In the
event that any provision of this Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of this Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision
had not been included.
p. Arbitration. Any dispute
arising out of or relating to this Agreement or the alleged breach of it, or the making of this Agreement, including claims of
fraud in the inducement, shall be discussed between the disputing parties in a good faith effort to arrive at a mutual settlement
of any such controversy. If, notwithstanding, such dispute cannot be resolved, such dispute shall be settled by binding arbitration.
Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitrator shall
be a retired state or federal judge or an attorney who has practiced securities or business litigation for at least 10 years.
If the parties cannot agree on an arbitrator within 20 days, any party may request that the chief judge of the District Court
of [_______] County, select an arbitrator. Arbitration will be conducted pursuant to the provisions of this Agreement, and the
commercial arbitration rules of the American Arbitration Association, unless such rules are inconsistent with the provisions of
this Agreement. Limited civil discovery shall be permitted for the production of documents and taking of depositions. Unresolved
discovery disputes may be brought to the attention of the arbitrator who may dispose of such dispute. The arbitrator shall have
the authority to award any remedy or relief that a court of this state could order or grant; provided, however, that punitive
or exemplary damages shall not be awarded. The arbitrator may award to the prevailing party, if any, as determined by the arbitrator,
all of its costs and fees, including the arbitrator’s fees, administrative fees, travel expenses, out-of-pocket expenses
and reasonable attorneys’ fees. Unless otherwise agreed by the parties, the place of any arbitration proceedings shall be
[___________] County, [_____________].
***Signature Page Follows***
ACCORDINGLY, the parties
hereto have caused this Agreement to be executed on the day and year first above written.
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[Restricted Stock Agreement Signature
Page]
Exhibit 10.5
RESTRICTED STOCK UNIT AGREEMENT
ARNO THERAPEUTICS, INC.
2016 EQUITY INCENTIVE PLAN
THIS AGREEMENT, made
effective as of this day of , 20___, by and between Arno Therapeutics, Inc., a Delaware corporation (the “Company”),
and _____________________ (“Participant”).
W I T N E S S E T H:
WHEREAS, Participant
on the date hereof is an Employee, Director of, or Consultant to the Company or one of its Subsidiaries; and
WHEREAS, the Company
wishes to grant a restricted stock unit award to Participant for shares of the Company’s Common Stock pursuant to the Company’s
2016 Equity Incentive Plan (the “Plan”); and
WHEREAS, the Administrator
of the Plan has authorized the grant of a restricted stock unit award to Participant;
NOW, THEREFORE, in
consideration of the premises and of the mutual covenants herein contained, the parties hereto agree as follows:
1. Grant of Restricted Stock
Unit Award; Term. The Company hereby grants to Participant on the date set forth above a restricted stock unit award (the
“Award”) for ________ (_________) restricted stock units on the terms and conditions set forth herein. Each restricted
stock unit shall entitle the Participant to receive either one share of the Company’s Common Stock or a cash payment in accordance
with Paragraph 3 below.
2. Vesting of Restricted Stock
Units.
a. General. The restricted
stock units subject to this Award shall vest according to the following schedule:
Specified Date or
Achievement
(each, a “Vesting Time”) |
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Number of Units
that Vest |
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| [Exact
time/procedures for certifying achievement should be determined when Award is approved and specified in this Section] |
|
[To be completed] |
b. Termination of Relationship.
If Participant ceases to be [an Employee] [a Consultant] [a Director] of the Company or any Subsidiary at any time during
the term of the Award, for any reason, this Award shall terminate and all restricted stock units subject to this Award that have
not vested shall be forfeited by Participant.
3. Issuance of Shares or Payment.
Upon each Vesting Time, the Company shall cause to be issued and delivered to Participant a stock certificate (or, upon request
and if permitted in the Administrator’s discretion, an entry to be made in the books of the Company or its designated agent)
representing that number of shares of Common Stock which is equivalent to the number of restricted stock units that have vested,
less any shares withheld for payment of taxes as provided in Section 4(e) below, and shall deliver such certificate to Participant.
Until the Vesting Time, Participant shall not be entitled to vote the shares of Common Stock represented by such restricted stock
units, shall not be entitled to receive dividends attributable to such shares of Common Stock, and shall not have any other rights
as a stockholder with respect to such shares.
Alternatively, the
Company may, in its sole discretion, pay Participant a lump sum payment, in cash, equal to the Fair Market Value of that number
of shares of Common Stock which is equivalent to the number of restricted stock units that have vested, subject to the withholding
provisions of Section 4(f) below. Such Fair Market Value shall be determined as of each Vesting Time. If the Company makes such
cash payment, the Participant shall not be entitled to vote the shares of Common Stock represented by such restricted stock units,
shall not be entitled to receive dividends attributable to such shares of Common Stock, and shall not have any other rights as
a stockholder with respect to such shares, whether before or after the Vesting Time.
The Company will issue
shares of Common Stock or make a cash payment pursuant to this Award as soon as practicable following the applicable Vesting Time,
but in no event beyond 2 ½ months after the end of the calendar year in which the Vesting Time occurs.
4. General Provisions.
a. Employment or Other Relationship.
This Agreement shall not confer on Participant any right with respect to continuance of employment or any other relationship by
the Company or any of its Affiliates, nor will it interfere in any way with the right of the Company to terminate such employment
or relationship. Nothing in this Agreement shall be construed as creating an employment or service contract for any specified term
between Participant and the Company or any Affiliate.
b. 280G Limitations.
Notwithstanding anything in the Plan, this Agreement or in any other agreement, plan, contract or understanding entered into from
time to time between Participant and the Company or any of its Subsidiaries to the contrary (except
an agreement that expressly modifies or excludes the application of this Paragraph 4(b)), the vesting of this Award shall
not be accelerated in connection with a Change of Control to the extent that such acceleration, taking into account all other rights,
payments and benefits to which Participant is entitled under any other plan or agreement, would constitute
a "parachute payment" or an "excess parachute payment" for purposes of Code Sections 280G and 4999, or
any successor provisions, and the regulations issued thereunder; provided, however, that the Administrator, in its sole discretion
and in accordance with applicable law, may modify or exclude the application of this Paragraph 4(b).
c. Securities Law Compliance.
Participant shall not transfer or otherwise dispose of the shares of Common Stock received pursuant to this Award until such time
as the Company and its counsel shall have determined that such transfer or other disposition will not violate any state or federal
securities laws. Participant may be required by the Company, as a condition of the effectiveness of this Award, to give any written
assurances that are necessary or desirable in the opinion of the Company and its counsel to ensure the issuance complies with applicable
securities laws, including that all Common Stock subject to this Award shall be held, until such time that such Common Stock is
registered and freely tradable under applicable state and federal securities laws, for Participant’s own account without
a view to any further distribution thereof; that the certificates (or, if permitted, book entries) for such shares shall bear an
appropriate legend or notation to that effect; and that such shares will be not transferred or disposed of except in compliance
with applicable state and federal securities laws.
d. Mergers, Recapitalizations,
Stock Splits, Etc. Except as otherwise specifically provided in any employment, change of control, severance or similar
agreement executed by Participant and the Company, pursuant and subject to Section 15 of the Plan, certain changes in the number
or character of the shares of Common Stock of the Company (through merger, consolidation, exchange, reorganization, divestiture
(including a spin-off), liquidation, recapitalization, stock split, stock dividend or otherwise) shall result in an adjustment,
reduction or enlargement, as appropriate, in Participant’s rights with respect to any unvested restricted stock units subject
to this Award (i.e., Participant shall have such “anti-dilution” rights under the Award with respect to such
events, but shall not have “preemptive ” rights).
e. Shares Reserved.
The Company shall at all times during the term of this Agreement reserve and keep available such number of shares as will be sufficient
to satisfy the requirements of this Agreement.
f. Withholding Taxes.
To permit the Company to comply with all applicable federal and state income tax laws or regulations, the Company may take such
action as it deems appropriate to ensure that, if necessary, all applicable federal and state payroll, income or other taxes attributable
to this Award are withheld from any amounts payable by the Company to Participant. If the Company is unable to withhold such federal
and state taxes, for whatever reason, the Participant hereby agrees to pay to the Company an amount equal to the amount the Company
would otherwise be required to withhold under federal or state law prior to the issuance of any certificates (or, if permitted,
book entries) for the shares of Common Stock subject to this Award. Subject to such rules as the Administrator may adopt, the Administrator
may, in its sole discretion, permit Participant to satisfy such withholding tax obligations, in whole or in part, by delivering
shares of the Company’s Common Stock, including shares of Common Stock received pursuant to this Award, having a Fair Market
Value, as of the date the amount of tax to be withheld is determined under applicable tax law, equal to the statutory minimum amount
required to be withheld for tax purposes. In no event may Participant deliver shares having a Fair Market Value in excess of such
statutory minimum required tax withholding. Participant’s election to deliver shares or to have shares withheld for this
purpose shall be made on or before the date that the amount of tax to be withheld is determined under applicable tax law, and shall
be irrevocable as of such date if approved by the Administrator. Such election shall comply with such rules as the Administrator
may adopt to assure compliance with Rule 16b-3, if applicable.
g. Nontransferability. No
portion of this Award that has not vested may be assigned or transferred, in whole or in part, other than by will or by the laws
of descent and distribution.
h. 2016 Equity Incentive Plan
. The Award evidenced by this Agreement is granted pursuant to the Plan, a copy of which Plan has been made available to Participant
and is hereby incorporated into this Agreement. This Agreement is subject to and in all respects limited and conditioned as provided
in the Plan. All capitalized terms in this Agreement not defined herein shall have the meanings ascribed to them in the Plan. The
Plan governs this Agreement and, in the event of any questions as to the construction of this Agreement or in the event of a conflict
between the Plan and this Agreement, the Plan shall govern, except as the Plan otherwise provides.
i. Lockup Period Limitation.
Participant agrees that in the event the Company advises Participant that it plans an underwritten public offering of its Common
Stock in compliance with the Securities Act of 1933, as amended, Participant will execute any lock-up agreement the Company and
the underwriter(s) deem necessary or appropriate, in their sole discretion, in connection with such public offering.
j. Blue Sky Limitation.
Notwithstanding anything in this Agreement to the contrary, in the event the Company makes any public offering of its securities
and determines, in its sole discretion, that it is necessary to reduce the number of issued but unvested restricted stock units
so as to comply with any state securities or Blue Sky law limitations with respect thereto, the Board of Directors of the Company
shall accelerate the vesting of this restricted stock unit award, provided that the Company gives Participant 15 days’ prior
written notice of such acceleration. Notice shall be deemed given when delivered personally or when deposited in the United States
mail, first class postage prepaid and addressed to Participant at the address of Participant on file with the Company.
k. Affiliates. Participant
agrees that, if Participant is an “affiliate” of the Company or any Affiliate (as defined in applicable legal and accounting
principles) at the time of a Change of Control (as defined in Section 1(f) of the Plan), Participant will comply with all requirements
of Rule 145 of the Securities Act of 1933, as amended, and the requirements of such other applicable legal or accounting principles,
and will execute any documents necessary to ensure such compliance.
l. Stock Legend. The
Administrator may require that the certificates for any shares of Common Stock issued to Participant (or, in the case of death,
Participant’s successors) under this Agreement shall bear an appropriate legend to reflect the restrictions of Paragraph
4(c) and Paragraphs 4(i) through 4(k) of this Agreement; provided, however, that failure to so endorse any of such certificates
shall not render invalid or inapplicable Paragraph 4(c) or Paragraphs 4(i) through 4(k).
m. Scope of Agreement.
This Agreement shall bind and inure to the benefit of the Company and its successors and assigns and Participant and any successor
or successors of Participant permitted by this Agreement. This Award is expressly subject to all terms and conditions contained
in the Plan and in this Agreement, and Participant’s failure to execute this Agreement shall not relieve Participant from
complying with such terms and conditions.
n. Choice of Law.
The law of the state of Delaware shall govern all questions concerning the construction, validity, and interpretation of this Plan,
without regard to that state’s conflict of laws rules.
o. Severability. In the
event that any provision of this Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of this Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision
had not been included.
p. Arbitration. Any
dispute arising out of or relating to this Agreement or the alleged breach of it, or the making of this Agreement, including claims
of fraud in the inducement, shall be discussed between the disputing parties in a good faith effort to arrive at a mutual settlement
of any such controversy. If, notwithstanding, such dispute cannot be resolved, such dispute shall be settled by binding arbitration.
Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitrator shall
be a retired state or federal judge or an attorney who has practiced securities or business litigation for at least 10 years. If
the parties cannot agree on an arbitrator within 20 days, any party may request that the chief judge of the District Court of [_______]
County, select an arbitrator. Arbitration will be conducted pursuant to the provisions of this Agreement, and the commercial arbitration
rules of the American Arbitration Association, unless such rules are inconsistent with the provisions of this Agreement. Limited
civil discovery shall be permitted for the production of documents and taking of depositions. Unresolved discovery disputes may
be brought to the attention of the arbitrator who may dispose of such dispute. The arbitrator shall have the authority to award
any remedy or relief that a court of this state could order or grant; provided, however, that punitive or exemplary damages shall
not be awarded. The arbitrator may award to the prevailing party, if any, as determined by the arbitrator, all of its costs and
fees, including the arbitrator’s fees, administrative fees, travel expenses, out-of-pocket expenses and reasonable attorneys’
fees. Unless otherwise agreed by the parties, the place of any arbitration proceedings shall be [___________] County, [_____________].
ACCORDINGLY, the parties
hereto have caused this Agreement to be executed on the day and year first above written.
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ARNO THERAPEUTICS, INC. |
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Participant |
Arno Therapeutics (CE) (USOTC:ARNI)
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Arno Therapeutics (CE) (USOTC:ARNI)
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