REDEEMABLE COMMON STOCK Sample Clauses

REDEEMABLE COMMON STOCK. In November 1996, the Company signed certain collaborative development and licensing agreements with Genentech, Inc, including one under which Genentech purchased 829,171 shares of redeemable common stock for $8.3 million to fund development of products to treat Xxxxxxxxx'x disease. The Agreement also provided that Genentech had the right, at its discretion, to terminate the Xxxxxxxxx'x program at specified milestones in the program, and that if the program were terminated, Genentech had the right to require the Company to repurchase from Genentech the shares of the Company's common stock having a value equal to the amount by which the $8.3 million exceeded the expenses incurred by the Company in connection with such studies by more than $1 million, based upon the share price paid by Genentech. Accordingly, the common stock is classified as redeemable common stock until such time as the related funds are expended. At December 31, 1998, $3,051,000 had been spent on the collaboration with Genentech and, accordingly, the Company has reclassified those common shares and related value to stockholders' equity. On May 21, 1998, Genentech exercised its right to terminate the collaboration and negotiations ensued with respect to the amount of redeemable common stock to be redeemed in accordance with the agreement and the method of such redemption. In March 2000, the Company reached a settlement of this matter with Genentech. Under the settlement agreement, Genentech released the Company from any obligation to redeem any shares of the Company's Common Stock held by Genentech. Accordingly, the Company will reclassify the amount currently recorded as Redeemable Common Stock ($5,248,000) to Stockholders' Equity in March 2000. The Company and Genentech also agreed that all of the agreements between them were terminated and that neither had any claim to the intellectual property of the other.

REDEEMABLE COMMON STOCK. During 1997, the majority stockholder of TTI sold 10% of the common stock of TTI to an outside investor for $4,000,000. Under the terms of a stockholders' agreement, the investor has a redemption option that became exercisable on April 15, 2000. The redemption option allows the investor to require either the majority stockholder or TTI to purchase all or any part of the shares held by the investor at the then current fair market value as determined by an independent appraiser. The redemption option terminates in the event TTI receives an offer to purchase all of the outstanding common stock for at least $100,000,000 which the majority stockholder elects to accept but which the investor elects not to accept. In accordance with accounting principles generally accepted in the United States, the carrying value of the redeemable common stock has been increased based on changes in the fair market value of the common stock of TTI and has been shown as a liability. Accordingly, during the years ended December 31, 1998, 1999 and 2000, TTI recorded a charge to accumulated deficit of $1,332,000, $4,945,000 and $43,274,000, respectively, for the increase in the value of the redeemable common stock. For purposes of these financial statements, the estimated value of the redeemable common stock held by the investor of $50,500,000 at December 31, 2000 is based upon the value of the TTI common stock in the acquisition discussed in Note 2 using the closing sale price of Sonus common stock on December 31, 2000. Upon consummation of the acquisition, the redemption feature of this common stock terminated.