RESTRICTED STOCK BONUS AGREEMENT
WITH K. XXXXX XXXXX, PH.D.
THIS AGREEMENT is made as of the 16th day of September, 1997, by and
between SUGEN, INC., a Delaware corporation (the "Company"), and K. Xxxxx Xxxxx,
Ph.D. ("Recipient").
WITNESSETH:
WHEREAS, Recipient has provided valuable services to the Company;
WHEREAS, the Company desires to issue, and Recipient desires to receive,
shares of the Company's common stock ("Common Stock") in consideration for past
services rendered to the Company or for its benefit; and
WHEREAS, the issuance of Common stock hereunder is in connection with and
in furtherance of the Company's compensatory benefit program for participation
of the Company's employees, directors, officers, consultants and advisors.
NOW, THEREFORE, IT IS AGREED between the parties as follows:
1. The Company hereby awards to Recipient twenty-five thousand (25,000)
shares of Common Stock (the "Shares"), subject to the following terms and
conditions.
2. Provided that Recipient has continuously rendered services to the
Company or any affiliate of the Company from and after the date of this
Agreement through March 31, 1999, the Shares shall vest in their entirety on
March 31, 1999 (the "Vesting Date"). However, to the extent the Vesting Date
occurs on a date on which the trading of the Shares either (i) would result in
liability to Recipient under Rule 10b-5 as promulgated under the Securities
Exchange Act of 1934, as amended, or (ii) would be prohibited under the
Company's trading window policy designed to prevent violations of Rule 10b-5,
then the Vesting Date shall be delayed until the first date on which Recipient
could trade the Shares without either incurring liability under Rule 10b-5 or
violating the Company's xxxxxxx xxxxxxx window policy.
3. If at any time prior to the Vesting Date, Recipient ceases to render
services to the Company or any affiliate of the Company (the "Separation"), the
Shares shall immediately cease vesting, Recipient shall have no further right in
the Shares and the Shares shall automatically be reacquired by the Company at
the Current Market Price (as hereinafter defined). The Current Market Price of
the Company's Common Stock shall be the closing price (or bid price if there is
no such closing price) of the Company's Common Stock quoted in the
Over-The-Counter Market Summary or the closing price quoted on the Nasdaq
National Market or on the primary national securities exchange on which the
Common Stock is then listed, whichever is applicable, as published in the
Western Edition of The Wall Street Journal (or, if not so reported, as otherwise
reported by the Nasdaq National Market) on the date of Recipient's Separation;
provided, however, that if there is no public market for the Company's Common
Stock, the Current Market Price shall be the fair market value of the Company's
Common Stock as determined by the Company's Board of Directors in good faith.
4. Recipient may satisfy any federal, state or local tax withholding
obligation relating to the acquisition of the Shares by any of the following
means or by a combination of such means: (1) tendering a cash payment, (2)
authorizing the Company to withhold shares from the Shares otherwise issuable to
Recipient as a result of the acquisition of the Shares, or (3) delivering to the
Company owned and unencumbered shares of the Common Stock of the Company.
5. Recipient acknowledges that the Shares to be issued pursuant to this
Agreement have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), and that the Shares are deemed to constitute "restricted
securities" under Rule 144 promulgated under the Securities Act. In this
connection, Recipient warrants and represents to the Company that Recipient is
holding the Shares for Recipient's own account and that Recipient has no present
intention of distributing or selling said stock except as permitted under the
Securities Act. Recipient further warrants and represents that Recipient has
either (i) a preexisting personal or business relationship with the Company or
any of its officers, directors or controlling persons, or (ii) the capacity to
protect his or her own interests in connection with the receipt of the Shares by
virtue of the business or financial expertise of any professional advisors to
Recipient who are unaffiliated with, and who are not compensated by, the Company
or any of its affiliates, directly or indirectly. Recipient further acknowledges
that the exemption from registration under Rule 144 will not be available for at
least two (2) years from the date of acquisition of the Shares, unless at least
one (1) year from the date of acquisition (i) a public trading market then
exists for the Common Stock of the Company, (ii) adequate information concerning
the Company is then available to the public and (iii) other terms and conditions
of Rule 144 are complied with; and that any disposition of the Shares may be
made only in limited amounts in accordance with such terms and conditions.
6. Until the Vesting Date, the Shares shall be issued in book form only and
share certificates shall not be issued. Notwithstanding the foregoing, in the
event that certificates representing the Shares are issued, all such
certificates shall have endorsed thereon the following legends:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE UNVESTED AND
SUBJECT TO FORFEITURE IN ACCORDANCE WITH THE RESTRICTED STOCK BONUS
AGREEMENT BETWEEN THE ISSUER AND THE REGISTERED HOLDER, OR THE PREDECESSOR
IN INTEREST, A COPY OF WHICH IS ON FILE AT THE ISSUER'S PRINCIPAL OFFICE.
ANY TRANSFER OR ATTEMPTED TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS VOID WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF THE
ISSUER."
(b) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"). THEY MAY NOT BE SOLD OR
OFFERED FOR SALE OR OTHERWISE DISTRIBUTED UNLESS THE SECURITIES ARE
REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION THEREFROM IS
AVAILABLE."
7. Recipient agrees that it shall in no event make any disposition of all
or any portion of the Shares unless and until:
(i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with said registration statement; or
(ii) (a) Recipient shall have notified the Company of the proposed
disposition and shall have furnished the Company with a derailed statement of
the circumstances surrounding the proposed disposition, (b) Recipient shall have
furnished the Company with an opinion of its own counsel to the effect that such
disposition will not require registration of the Shares under the Securities
Act, and (c) such opinion of its counsel shall have been concurred in by counsel
for the Company, such concurrence not to be unreasonably withheld, and the
Company shall have advised Recipient of such concurrence.
8. The Company shall not be required (i) to transfer on its books any
Shares which shall have been sold or transferred in violation of any of the
provisions set forth in this Agreement or the terms of the Securities Act, or
(ii) 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 shall have been
so transferred.
9. Subject to the provisions of this Agreement, Recipient shall, during the
term of this Agreement, exercise all rights and privileges of a stockholder of
the Company with respect to the Shares. Recipient shall be deemed to be the
holder of the Shares for purposes of receiving any dividends which may be paid
with respect to such Shares and for purposes of exercising any voting rights
relating to such Shares, even if some or all of such Shares have not yet vested
and been released from the Company's reacquisition right.
10. If any change is made in the Shares subject to this Agreement (through
merger, consolidation, reorganization, recapitalization, stock dividend,
dividend in property other than cash, stock split, liquidating dividend,
combination of shares, exchange of shares, change in corporate structure or
otherwise), this Agreement will be appropriately adjusted in the class(es) of
securities, maximum number of Shares and price per Share subject to this
Agreement.
11. In the event of: (1) a merger or consolidation in which the Company is
not the surviving corporation; (2) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise; (3) any
other capital reorganization in which more than fifty percent (50%) of the
shares of the Company entitled to vote are exchanged; (4) a transaction or group
of related transactions involving the sale of all or substantially all of the
Company's assets; (5) the acquisition by any person, entity or group (excluding
any employee benefit plan, or related trust,
sponsored or maintained by the Company or any subsidiary of the Company) of the
beneficial ownership, directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting power in the
election of members of the board of directors of the Company; or (6) a change in
the composition of the Company's Board of Directors such that, during any period
of two consecutive years, individuals who, at the beginning of such period,
constitute the Board of Directors, together with individuals who are Approved
New Directors (as defined below), cease for any reason to have authority to cast
at least a majority of the votes which all directors on the Board are entitled
to vote; then, to the extent not prohibited by law, the time during the Vesting
Date shall be accelerated prior to such event. For purposes of this Agreement,
an "Approved New Director" shall be a Board member whose election, or the
nomination for election by the Company's stockholders, was approved by a vote of
a majority of the votes entitled to be cast by the directors then still in
office who were directors at the beginning of the period.
12. The acquisition and vesting of the Shares may have adverse tax
consequences to the Recipient which may avoided or mitigated by filing an
election under Section 83(b) of the Internal Revenue Code, as amended (the
"Code"). Such election must be filed within thirty (30) days after the date of
this Agreement. RECIPIENT ACKNOWLEDGES THAT IT IS HIS OWN RESPONSIBILITY, AND
NOT THE COMPANY'S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(B), EVEN IF
RECIPIENT REQUESTS THE COMPANY TO MAKE THE FILING ON HIS OR HER BEHALF.
13. Rights and obligations under this Agreement shall not be impaired by
any amendment of this Agreement unless (i) the Company requests the consent of
Recipient and (ii) Recipient consents in writing.
14. 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.
15. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail with postage and
fees prepaid, addressed to the other party hereto at its address hereinafter
shown below its signature or at such other address as such party may designate
by ten (10) days' advance written notice to the other party hereto.
16. This Agreement shall be governed by the laws of the State of California
without regard to such State's principles of conflict of laws.
17. This Agreement shall inure to the benefit of the successors and assigns
of the Company and, subject to the restrictions on transfer herein set forth,
shall be binding upon Recipient, his or her heirs, executors, administrators,
successors and assigns.
18. This Agreement does not constitute an employment contract nor shall be
deemed to create in any way whatsoever any obligation on Recipient's part to
continue in the employ of the Company or any affiliate of the Company, or to
limit the ability of the Company or any
affiliate of the Company to terminate Recipient's employment with the Company
or affiliate of the Company at any time, for any reason or for no reason.
19. This Agreement constitutes the entire, final and exclusive statement of
the agreement between the parties hereto with respect to the subject matter
hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
RECIPIENT: SUGEN, INC.:
/s/ K. Xxxxx Xxxxx Ph.D By /s/ Xxxxxxx Xxxxx-Freke
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K. Xxxxx Xxxxx Ph.D Xxxxxxx Xxxxx-Freke
Chief Executive Officer and
Address: ------------------ Chairman of the Board of
Directors
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