HALOZYME THERAPEUTICS, INC. RESTRICTED STOCK AGREEMENT
EXHIBIT 10.28
HALOZYME THERAPEUTICS, INC.
RESTRICTED STOCK AGREEMENT
RESTRICTED STOCK AGREEMENT
Halozyme Therapeutics, Inc. has granted to the Participant named in the Notice of Grant
of Restricted Stock (the “Grant Notice”) to which this Restricted Stock Agreement (the “Agreement”)
is attached an Award consisting of Shares subject to the terms and conditions set forth in the
Grant Notice and this Agreement. The Award has been granted pursuant to the Halozyme Therapeutics,
Inc. 2006 Stock Plan (the “Plan”), as amended to the Date of Grant, the provisions of which are
incorporated herein by reference. By signing the Grant Notice, the Participant: (a) acknowledges
receipt of and represents that the Participant has read and is familiar with the Grant Notice, this
Agreement, the Plan and a Plan prospectus for the Shares in the form most recently registered with
the Securities and Exchange Commission (the “Plan Prospectus”), (b) accepts the Award subject to
all of the terms and conditions of the Grant Notice, this Agreement and the Plan and (c) agrees to
accept as binding, conclusive and final all decisions or interpretations of the Committee upon any
questions arising under the Grant Notice, this Agreement or the Plan.
1. Definitions and Construction.
1.1 Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings
assigned to such terms in the Grant Notice or the Plan.
1.2 Construction. Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement. Except when otherwise
indicated by the context, the singular shall include the plural and the plural shall include the
singular. Use of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.
2. Administration.
All questions of interpretation concerning the Grant Notice and this Agreement shall be
determined by the Committee. All determinations by the Committee shall be final and binding upon
all persons having an interest in the Award. Any Officer of a Participating Company shall have the
authority to act on behalf of the Company with respect to any matter, right, obligation, or
election which is the responsibility of or which is allocated to the Company herein, provided the
Officer has apparent authority with respect to such matter, right, obligation, or election.
3. The Award.
3.1 Grant and Issuance of Shares. On the Date of Grant, the Participant shall acquire and the
Company shall issue, subject to the provisions of this Agreement, a number of Shares equal to the
Total Number of Shares set forth in the Grant Notice. As a condition to the issuance of the
Shares, the Participant shall execute and deliver to the Company along with the Grant Notice the
Assignment Separate from Certificate duly endorsed (with date and number of shares blank) in the
form attached to the Grant Notice.
3.2 No Monetary Payment Required. The Participant is not required to make any monetary
payment (other than applicable tax withholding, if any) as a condition to receiving the Shares, the
consideration for which shall be past services actually rendered and/or future services to be
rendered to a Participating Company or for its benefit. Notwithstanding the foregoing, if required
by applicable state corporate law, the Participant shall furnish consideration in the form of cash
or past services rendered to a Participating Company or for its benefit having a value not less
than the par value of the Shares issued pursuant to the Award.
3.3 Beneficial Ownership of Shares; Certificate Registration. The Participant hereby
authorizes the Company, in its sole discretion, to deposit the Shares with the Company’s transfer
agent, including any successor transfer agent, to be held in book entry form during the term of the
Escrow pursuant to Section 6. Furthermore, the Participant hereby authorizes the Company, in its
sole discretion, to deposit, following the term of such Escrow, for the benefit of the Participant
with any broker with which the Participant has an account relationship of which the Company has
notice any or all Shares which are no longer subject to such Escrow. Except as provided by the
foregoing, a certificate for the Shares shall be registered in the name of the Participant, or, if
applicable, in the names of the heirs of the Participant.
3.4 Issuance of Shares in Compliance with Law. The issuance of the Shares shall be subject to
compliance with all applicable requirements of federal, state or foreign law with respect to such
securities. No Shares shall be issued hereunder if their issuance would constitute a violation of
any applicable federal, state or foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the Stock may then be listed. The
inability of the Company to obtain from any regulatory body having jurisdiction the authority, if
any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any Shares
shall relieve the Company of any liability in respect of the failure to issue such Shares as to
which such requisite authority shall not have been obtained. As a condition to the issuance of the
Shares, the Company may require the Participant to satisfy any qualifications that may be necessary
or appropriate, to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the Company.
4. Vesting of Shares.
The Shares shall vest and become Vested Shares as provided in the Grant Notice. For purposes
of determining the number of Vested Shares following an Ownership Change Event, credited Service
shall include all Service with any corporation which is a Participating Company at the time the
Service is rendered, whether or not such corporation is a Participating Company both before and
after the Ownership Change Event.
5. Company Reacquisition Right.
5.1 Grant of Company Reacquisition Right. In the event that (a) the Participant’s Service
terminates for any reason or no reason, with or without cause, or (b) the Participant, the
Participant’s legal representative, or other holder of the Shares, attempts to sell, exchange,
transfer, pledge, or otherwise dispose of (other than pursuant to an Ownership Change Event),
including, without limitation, any transfer to a nominee or agent of the Participant, any Shares
which are not Vested Shares (“Unvested Shares”), the Company shall automatically
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reacquire the Unvested Shares, and the Participant shall not be entitled to any payment
therefor (the “Company Reacquisition Right”).
5.2 Ownership Change Event. Upon the occurrence of an Ownership Change Event, any and all
new, substituted or additional securities or other property to which the Participant is entitled by
reason of the Participant’s ownership of Unvested Shares shall be immediately subject to the
Company Reacquisition Right and included in the terms “Shares,” “Stock” and “Unvested Shares” for
all purposes of the Company Reacquisition Right with the same force and effect as the Unvested
Shares immediately prior to the Ownership Change Event. For purposes of determining the number of
Vested Shares following an Ownership Change Event, credited Service shall include all Service with
any corporation which is a Participating Company at the time the Service is rendered, whether or
not such corporation is a Participating Company both before and after the Ownership Change Event.
6. Escrow.
6.1 Appointment of Agent. To ensure that Shares subject to the Company Reacquisition Right
will be available for reacquisition, the Participant and the Company hereby appoint the Secretary
of the Company, or any other person designated by the Company, as their agent and as
attorney-in-fact for the Participant (the “Agent”) to hold any and all Unvested Shares and to sell,
assign and transfer to the Company any such Unvested Shares reacquired by the Company pursuant to
the Company Reacquisition Right. The Participant understands that appointment of the Agent is a
material inducement to make this Agreement and that such appointment is coupled with an interest
and is irrevocable. The Agent shall not be personally liable for any act the Agent may do or omit
to do hereunder as escrow agent, agent for the Company, or attorney in fact for the Participant
while acting in good faith and in the exercise of the Agent’s own good judgment, and any act done
or omitted by the Agent pursuant to the advice of the Agent’s own attorneys shall be conclusive
evidence of such good faith. The Agent may rely upon any letter, notice or other document executed
by any signature purporting to be genuine and may resign at any time.
6.2 Establishment of Escrow. The Participant authorizes the Company to deposit the Unvested
Shares with the Company’s transfer agent to be held in book entry form, as provided in Section 3.3,
and the Participant agrees to deliver to and deposit with the Agent each certificate, if any,
evidencing the Shares and an Assignment Separate from Certificate with respect to such book entry
shares and each such certificate duly endorsed (with date and number of Shares blank) in the form
attached to the Grant Notice, to be held by the Agent under the terms and conditions of this
Section 6 (the “Escrow”). Upon the occurrence of an Ownership Change Event or a change, as
described in Section 8, in the character or amount of any outstanding stock of the corporation the
stock of which is subject to the provisions of this Agreement, any and all new, substituted or
additional securities or other property to which the Participant is entitled by reason of his or
her ownership of the Shares that remain, following such Ownership Change Event or change described
in Section 8, subject to the Company Reacquisition Right shall be immediately subject to the Escrow
to the same extent as the Shares immediately before such event. The Company shall bear the
expenses of the Escrow.
6.3 Delivery of Shares to Participant. The Escrow shall continue with respect to any Shares
for so long as such Shares remain subject to the Company Reacquisition Right. Upon termination of
the Reacquisition Right with respect to Shares, the Company shall
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so notify the Agent and direct the Agent to deliver such number of Shares to the Participant.
As soon as practicable after receipt of such notice, the Agent shall cause to be delivered to the
Participant the Shares specified by such notice, and the Escrow shall terminate with respect to
such Shares.
7. Tax Matters.
7.1 Tax Withholding.
(a) In General. At the time the Grant Notice is executed, or at any time thereafter as
requested by a Participating Company, the Participant hereby authorizes withholding from payroll
and any other amounts payable to the Participant, and otherwise agrees to make adequate provision
for, any sums required to satisfy the federal, state, local and foreign tax withholding obligations
of the Participating Company, if any, which arise in connection with the Award, including, without
limitation, obligations arising upon (a) the transfer of Shares to the Participant, (b) the lapsing
of any restriction with respect to any Shares, (c) the filing of an election to recognize tax
liability, or (d) the transfer by the Participant of any Shares. The Company shall have no
obligation to deliver the Shares or to release any Shares from the Escrow established pursuant to
Section 6 until the tax withholding obligations of the Participating Company have been satisfied by
the Participant.
(b) Assignment of Sale Proceeds; Payment of Tax Withholding by Check. Subject to compliance
with applicable law and the Company’s Xxxxxxx Xxxxxxx Policy, the Participant shall satisfy the
Participating Company’s tax withholding obligations in accordance with procedures established by
the Company providing for delivery by the Participant to the Company or a broker approved by the
Company of properly executed instructions, in a form approved by the Company, providing for the
assignment to the Company of the proceeds of a sale with respect to some or all of the shares
becoming Vested Shares on a Vesting Date as provided in the Grant Notice. Notwithstanding the
foregoing, the Participant may elect to pay by check the amount of the Participating Company’s tax
withholding obligations arising on any Vesting Date by delivering written notice of such election
to the Company on a form specified by the Company for this purpose at least thirty (30) days (or
such other period established by the Company) prior to such Vesting Date. By making such election,
the Participant agrees to deliver a check for the full amount of the required tax withholding to
the applicable Participating Company on or before the third business day following the Vesting
Date. If the Participant elects to pay the required tax withholding by check but fails to make
such payment as required by the preceding sentence, the Company is hereby authorized at its
discretion, to satisfy the tax withholding obligations through any other means authorized by this
Section 7, including by effecting a sale of some or all of the shares becoming Vested Shares on the
Vesting Date, withholding from payroll and any other amounts payable to the Participant or by
withholding shares in accordance with Section 7.1(c).
(c) Withholding in Shares. The Company may, in its discretion, permit or require the
Participant to satisfy all or any portion of a Participating Company’s tax withholding obligations
by deducting a number of whole, Vested Shares otherwise deliverable to the Participant or by the
Participant’s tender to the Company of a number of whole, Vested Shares or vested shares acquired
otherwise than pursuant to the Award having, in any such case, a fair market value, as determined
by the Company as of the date on which the tax withholding obligations arise, not in excess of the
amount of such tax withholding obligations determined by
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the applicable minimum statutory withholding rates. Any adverse consequences to the
Participant resulting from the procedure permitted under this Section, including, without
limitation, tax consequences, shall be the sole responsibility of the Participant.
7.2 Election Under Section 83(b) of the Code.
(a) The Participant understands that Section 83 of the Code taxes as ordinary income the
difference between the amount paid for the Shares, if anything, and the fair market value of the
Shares as of the date on which the Shares are “substantially vested,” within the meaning of Section
83. In this context, “substantially vested” means that the right of the Company to reacquire the
Shares pursuant to the Company Reacquisition Right has lapsed. The Participant understands that he
or she may elect to have his or her taxable income determined at the time he or she acquires the
Shares rather than when and as the Company Reacquisition Right lapses by filing an election under
Section 83(b) of the Code with the Internal Revenue Service no later than thirty (30) days after
the date of acquisition of the Shares. The Participant understands that failure to make a timely
filing under Section 83(b) will result in his or her recognition of ordinary income, as the Company
Reacquisition Right lapses, on the difference between the purchase price, if anything, and the fair
market value of the Shares at the time such restrictions lapse. The Participant further
understands, however, that if Shares with respect to which an election under Section 83(b) has been
made are forfeited to the Company pursuant to its Company Reacquisition Right, such forfeiture will
be treated as a sale on which there is realized a loss equal to the excess (if any) of the amount
paid (if any) by the Participant for the forfeited Shares over the amount realized (if any) upon
their forfeiture. If the Participant has paid nothing for the forfeited Shares and has received no
payment upon their forfeiture, the Participant understands that he or she will be unable to
recognize any loss on the forfeiture of the Shares even though the Participant incurred a tax
liability by making an election under Section 83(b).
(b) The Participant understands that he or she should consult with his or her tax advisor
regarding the advisability of filing with the Internal Revenue Service an election under Section
83(b) of the Code, which must be filed no later than thirty (30) days after the date of the
acquisition of the Shares pursuant to this Agreement. Failure to file an election under Section
83(b), if appropriate, may result in adverse tax consequences to the Participant. The Participant
acknowledges that he or she has been advised to consult with a tax advisor regarding the tax
consequences to the Participant of the acquisition of Shares hereunder. ANY ELECTION UNDER SECTION
83(b) THE PARTICIPANT WISHES TO MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ON WHICH
THE PARTICIPANT ACQUIRES THE SHARES. THIS TIME PERIOD CANNOT BE EXTENDED. THE PARTICIPANT
ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS THE PARTICIPANT’S SOLE
RESPONSIBILITY, EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO FILE SUCH
ELECTION ON HIS OR HER BEHALF.
(c) The Participant will notify the Company in writing if the Participant files an election
pursuant to Section 83(b) of the Code. The Company intends, in the event it does not receive from
the Participant evidence of such filing, to claim a tax deduction for any amount which would
otherwise be taxable to the Participant in the absence of such an election.
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8. Adjustments for Changes in Capital Structure.
Subject to any required action by the stockholders of the Company, in the event of any change
in the Stock effected without receipt of consideration by the Company, whether through merger,
consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend,
stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of
shares, or similar change in the capital structure of the Company, or in the event of payment of a
dividend or distribution to the stockholders of the Company in a form other than Stock (excepting
normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock,
appropriate adjustments shall be made in the number and kind of shares subject to the Award, in
order to prevent dilution or enlargement of the Participant’s rights under the Award. For purposes
of the foregoing, conversion of any convertible securities of the Company shall not be treated as
“effected without receipt of consideration by the Company.” Any fractional share resulting from an
adjustment pursuant to this Section shall be rounded down to the nearest whole number. Such
adjustments shall be determined by the Committee, and its determination shall be final, binding and
conclusive.
9. Rights as a Stockholder, Director, Employee or Consultant.
The Participant shall have no rights as a stockholder with respect to any Shares subject to
the Award until the date of the issuance of the Shares (as evidenced by the appropriate entry on
the books of the Company or of a duly authorized transfer agent of the Company). No adjustment
shall be made for dividends, distributions or other rights for which the record date is prior to
the date the Shares are issued, except as provided in Section 8. Subject the provisions of this
Agreement, the Participant shall exercise all rights and privileges of a stockholder of the Company
with respect to Shares deposited in the Escrow pursuant to Section 6. If the Participant is an
Employee, the Participant understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between a Participating Company and the Participant, the
Participant’s employment is “at will” and is for no specified term. Nothing in this Agreement
shall confer upon the Participant any right to continue in the Service of a Participating Company
or interfere in any way with any right of the Participating Company Group to terminate the
Participant’s Service at any time.
10. Legends.
The Company may at any time place legends referencing the Company Reacquisition Right and any
applicable federal, state or foreign securities law restrictions on all certificates representing
the Shares. The Participant shall, at the request of the Company, promptly present to the Company
any and all certificates representing the Shares in the possession of the Participant in order to
carry out the provisions of this Section. Unless otherwise specified by the Company, legends
placed on such certificates may include, but shall not be limited to, the following:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET FORTH IN AN
AGREEMENT BETWEEN THIS CORPORATION AND THE REGISTERED HOLDER, OR HIS PREDECESSOR IN
INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION.”
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11. Transfers in Violation of Agreement.
No Shares may be sold, exchanged, transferred, assigned, pledged, hypothecated or otherwise
disposed of, including by operation of law, in any manner which violates any of the provisions of
this Agreement and, except pursuant to an Ownership Change Event, until the date on which such
shares become Vested Shares, and any such attempted disposition shall be void. The Company shall
not be required (a) to transfer on its books any Shares which will have been transferred in
violation of any of the provisions set forth in this Agreement or (b) to treat as owner of such
Shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom
such Shares will have been so transferred. In order to enforce its rights under this Section, the
Company shall be authorized to give a stop transfer instruction with respect to the Shares to the
Company’s transfer agent.
12. Miscellaneous Provisions.
12.1 Termination or Amendment. The Committee may terminate or amend the Plan or this
Agreement at any time; provided, however, that no such termination or amendment may adversely
affect the Participant’s rights under this Agreement without the consent of the Participant unless
such termination or amendment is necessary to comply with applicable law or government regulation.
No amendment or addition to this Agreement shall be effective unless in writing.
12.2 Nontransferability of the Award. The right to acquire Shares pursuant to the Award shall
not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment,
pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s
beneficiary, except transfer by will or by the laws of descent and distribution. All rights with
respect to the Award shall be exercisable during the Participant’s lifetime only by the Participant
or the Participant’s guardian or legal representative.
12.3 Further Instruments. The parties hereto agree to execute such further instruments and to
take such further action as may reasonably be necessary to carry out the intent of this Agreement.
12.4 Binding Effect. This Agreement shall inure to the benefit of the successors and assigns
of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the
Participant and the Participant’s heirs, executors, administrators, successors and assigns.
12.5 Delivery of Documents and Notices. Any document relating to participation in the Plan or
any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given (except to the extent that this Agreement provides for effectiveness only upon
actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address,
if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post
Office or foreign postal service, by registered or certified mail, or with a nationally recognized
overnight courier service, with postage and fees prepaid, addressed to the other party at the
address shown below that party’s signature to the Grant Notice or at such other address as such
party may designate in writing from time to time to the other party.
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(a) Description of Electronic Delivery. The Plan documents, which may include but do not
necessarily include: the Plan, the Grant Notice, this Agreement, the Plan Prospectus, and any
reports of the Company provided generally to the Company’s stockholders, may be delivered to the
Participant electronically. In addition, the parties may deliver electronically any notices called
for in connection with the Escrow and the Participant may deliver electronically the Grant Notice
to the Company or to such third party involved in administering the Plan as the Company may
designate from time to time. Such means of electronic delivery may include but do not necessarily
include the delivery of a link to a Company intranet or the internet site of a third party involved
in administering the Plan, the delivery of the document via e-mail or such other means of
electronic delivery specified by the Company.
(b) Consent to Electronic Delivery. The Participant acknowledges that the Participant has
read Section 12.5(a) of this Agreement and consents to the electronic delivery of the Plan
documents, the Grant Notice and notices in connection with the Escrow, as described in Section
12.5(a). The Participant acknowledges that he or she may receive from the Company a paper copy of
any documents delivered electronically at no cost to the Participant by contacting the Company by
telephone or in writing. The Participant further acknowledges that the Participant will be
provided with a paper copy of any documents if the attempted electronic delivery of such documents
fails. Similarly, the Participant understands that the Participant must provide the Company or any
designated third party administrator with a paper copy of any documents if the attempted electronic
delivery of such documents fails. The Participant may revoke his or her consent to the electronic
delivery of documents described in Section 12.5(a) or may change the electronic mail address to
which such documents are to be delivered (if Participant has provided an electronic mail address)
at any time by notifying the Company of such revoked consent or revised e-mail address by
telephone, postal service or electronic mail. Finally, the Participant understands that he or she
is not required to consent to electronic delivery of documents described in Section 12.5(a).
12.6 Integrated Agreement. The Grant Notice, this Agreement and the Plan together with the
Superseding Agreement, if any, shall constitute the entire understanding and agreement of the
Participant and the Participating Company Group with respect to the subject matter contained herein
or therein and supersedes any prior agreements, understandings, restrictions, representations, or
warranties among the Participant and the Participating Company Group with respect to such subject
matter other than those as set forth or provided for herein or therein. To the extent contemplated
herein or therein, the provisions of the Grant Notice and the Agreement shall survive any
settlement of the Award and shall remain in full force and effect.
12.7 Applicable Law. This Agreement shall be governed by the laws of the State of California
as such laws are applied to agreements between California residents entered into and to be
performed entirely within the State of California.
12.8 Counterparts. The Grant Notice may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.
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ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED the undersigned does hereby sell, assign and transfer unto
(
) shares of the Capital Stock
of HALOZYME THERAPEUTICS, INC. standing in the undersigned’s name on the books of said corporation
represented by Certificate No.
herewith and does hereby irrevocably constitute
and appoint
Attorney to transfer the said stock on the books of
said corporation with full power of substitution in the premises.
Dated: |
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| Print Name |
Instructions: Please do not fill in any blanks other than the signature line. The purpose
of this assignment is to enable the Company to exercise its Company Reacquisition Right set forth
in the Restricted Stock Agreement without requiring additional signatures on the part of the
Participant.
