FORM OF TARGETED GENETICS CORPORATION STOCK INCENTIVE PLAN RESTRICTED STOCK UNIT AGREEMENT
FORM
OF
TARGETED
GENETICS CORPORATION
STOCK
INCENTIVE PLAN
THIS
RESTRICTED STOCK UNIT AGREEMENT (this "Agreement")
is
entered into between Targeted Genetics Corporation, a Washington corporation
(the "Company"),
and
____________ (the "Grantee")
as of
________ (the "Date
of Grant")
pursuant to the Targeted Genetics Corporation Stock Incentive Plan (the
"Plan").
To
the extent any capitalized terms used in this Agreement are not defined, they
will have the meaning ascribed to them in the Plan.
Grantee
and the Company agree as follows:
1.
Grant
of Restricted Stock Units.
The
Company granted to Grantee, on the Date of Grant, an award of ______Restricted
Stock Units (the "Units")
pursuant to the terms and conditions contained herein and the terms and
conditions of the Plan.
2.
Vesting
of the Units.
(a)
Release
Date.
The
Units will vest in ______ substantially equal installments on each of the first
through _________ annual anniversaries of the Date of Grant (the "Release
Dates");
provided that Grantee has remained in continuous Service through each such
Release Date.
(b)
Termination
of Service.
In the
event that Grantee's Service terminates prior to any Release Date, for any
reason, including a voluntary termination by Grantee or an involuntary
termination by the Company (with or without Cause), any unvested Units will
be
immediately forfeited without consideration. Notwithstanding the preceding
sentence, in the event that Grantee's Service terminates as a result of
Grantee's death, a portion of the number of Units scheduled to vest on the
Release Date which would have next occurred pursuant to Section 2(a) if it
were
not for the Grantee's death (the "Next
Release Date")
will
vest immediately upon such termination as follows: The number of Units that
will
immediately vest is equal to (i) the number of Units subject to vesting on
the
Next Release Date, multiplied by (ii) a fraction (not greater than one), the
numerator of which is the number of whole months during which Grantee was in
continuous Service between the last scheduled Release Date prior to the date
of
death (or, if none, the Date of Grant) and the date of death, and the
denominator of which is the number of whole months between the last scheduled
Release Date prior to the date of death (or, if none, the Date of Grant) and
the
Next Release Date. Any Units that are not vested after giving effect to the
foregoing sentence will be immediately forfeited as of the date of death without
consideration.
(c)
Change
in Control.
Notwithstanding any provision to the contrary, in the event of termination
of
Grantee's Service without Cause or for Good Reason within twelve (12) months
following a Change in Control, any unvested Units, to the extent assumed (or
the
applicable substitute award, if any) shall vest in full. For purposes of this
Section 2(c), "Good
Reason"
means
the occurrence of any of the following events or conditions (without Grantee'
written consent) and the failure of the Company (or its successor) to cure
such
event or condition within Grantee's thirty (30) day written notice:
(i) a
change
in Grantee's status, title, position or responsibilities (including reporting
responsibilities) that, in Grantee's reasonable judgment, represents a
substantial reduction in the status, title, position or responsibilities as
in
effect immediately prior thereto; the assignment to Grantee of any duties or
responsibilities that, in Grantee's reasonable judgment, are materially
inconsistent with such status, title, position or responsibilities; or any
removal of Grantee from or failure to reappoint or reelect Grantee to any of
such positions, except in connection with termination of Grantee's Service
for
Cause or Good Reason, or as a result of Grantee's Disability or
death;
(ii) a
substantial reduction in Grantee's annual base salary;
(iii) a
requirement Grantee be based at any place outside a 35-mile radius of Grantee's
place of Service prior to the Change in Control, except for reasonably required
travel on the Company's (or its successor's) business that is not materially
greater than such travel requirements prior to the Change in
Control;
(iv) a
failure
to (x) continue in effect any material compensation or benefit plan (or the
substantial equivalent thereof) in which Grantee was participating at the time
of the Change in Control, or (y) provide Grantee with compensation and benefits
substantially equivalent (in terms of benefit levels and/or reward
opportunities) to those provided under each material employee benefit plan,
program and practice as in effect immediately prior to the Change in Control;
or
(v) a
material breach by the Company (or its successor) of its obligations to Grantee
under the Plan (or any substantially equivalent plan of the Company's
successor).
3.
Restriction
on Transfer.
This
Agreement, and the Units to be issued pursuant to this Agreement, may not be
transferred, assigned, pledged or otherwise encumbered by Grantee in any manner
whatsoever other than by will or by the laws of descent or distribution, or
pursuant to a domestic relations order if approved or ratified by the Company.
References in this Agreement to Grantee, to the extent relevant in the context,
shall include references to any authorized transferees.
4.
Payout
of Units.
(a)
Status
as a Creditor.
Unless
and until Units have vested in accordance with Section 2 above, Grantee will
have no right to a payout with respect to any Units. Prior to payout of any
vested Units, the vested Units will represent an unfunded and unsecured
obligation of the Company, payable (if at all) only from the general assets
of
the Company. Grantee is an unsecured general creditor of the Company, and
payouts are subject to the claims of the Company's creditors.
(b)
Form
and Timing of Payout.
Units
will automatically be paid out in the form of Shares upon the vesting of the
Units pursuant to Section 2 above; provided that the Company will have no
obligation to issue such Shares unless and until Grantee has satisfied any
applicable tax or other withholding obligations, including those described
in
Section 5 below, and such issuance otherwise complies with all Applicable Laws.
The number of Shares to be issued pursuant to the Units will be determined
using
the Fair Market Value on the Release Date. Fractional Shares will not be issued
upon the vesting of Units. Where a fractional share would be owed to the Grantee
upon the vesting of Units, a cash payment equivalent will be paid in place
of
any such fractional share. The Shares to be issued upon payout will be
automatically issued as soon as practicable to Grantee following each Release
Date; provided that, in any event, no later than the date that is 2 ½ months
from the end of (i) Grantee's tax year that includes the Release Date, or (ii)
the Company's tax year that includes the Release Date. Any distribution or
delivery of Shares to be made to Grantee's estate will be made to the executor
provided the executor furnishes the Company with (i) a written notice of the
executor's status as transferee, and (ii) evidence satisfactory to the Company
to establish the validity of the transfer and compliance with any Applicable
Laws pertaining to such transfer.
5.
Tax
Consequences.
Grantee
understands that Grantee (and not the Company) will be responsible for the
tax
liability that may arise as a result of the transactions contemplated by this
Agreement. Grantee understands that Grantee will recognize ordinary income
in an
amount equal to the Fair Market Value of the Shares received on each payout
date
for such Shares. Grantee further agrees to make arrangements satisfactory to
the
Company for the satisfaction of any applicable income and employment withholding
taxes and any other withholding obligation(s) that arise in connection with
the
Units which, at the sole discretion of the Company, may include, but is not
limited to: (i) having Grantee pay such tax withholding amounts to the Company
in cash within twenty-four (24) hours of the payout date for such Shares, (ii)
withholding such amounts from other compensation due to Grantee, or (iii) having
the Company withhold otherwise deliverable Shares having a Fair Market Value
equal to the minimum amount required to be withheld. Unless otherwise agreed
to
in writing by Grantee and the Company within a reasonable time prior to the
applicable payout date, withholding obligations will be satisfied by having
the
Company withhold such amounts from compensation otherwise due to Grantee as
provided in (ii) above. By signing below, Grantee represents, warrants and
acknowledges that the Company has made no warranties or representations to
Grantee with respect to the income tax consequences of the transactions
contemplated by this Agreement, and Grantee in no manner is relying on the
Company or its representatives for an assessment of such tax consequences.
Grantee further acknowledges that the tax laws and regulations are subject
to
change and that Grantee should consult Grantee's own tax advisor regarding
this
Agreement. Nothing stated herein is intended or written to be used, and cannot
be used, for the purpose of avoiding taxpayer penalties.
6.
Restriction
on Transfer.
Regardless of whether the transfer or issuance of the Shares to be issued
pursuant to this Agreement have been registered under the Securities Act or
have
been registered or qualified under the securities laws of any state, the Company
may impose additional restrictions upon the sale, pledge, or other transfer
of
the Shares (including the placement of appropriate legends on stock certificates
and the issuance of stop-transfer instructions to the Company's transfer agent)
if, in the judgment of the Company and its counsel, such restrictions are
necessary in order to achieve compliance with the provisions of the Securities
Act, the securities laws of any state, or any other Applicable Law. Stock
certificates evidencing the Shares issued pursuant to this Agreement, if any,
may bear such restrictive legends as the Company and its counsel deem necessary
under Applicable Laws or pursuant to this Agreement.
7.
Representations,
Warranties, Covenants, and Acknowledgments.
Grantee
hereby agrees that in the event the Company and its counsel deem it necessary
or
advisable in the exercise of their discretion, the transfer or issuance of
the
Shares issued pursuant to this Agreement may be conditioned upon Grantee making
certain representations, warranties, and acknowledgments relating to compliance
with Applicable Laws.
8.
Voting
and Other Rights.
Subject
to the terms of this Agreement, Grantee shall not have any voting rights or
any
other rights and privileges of a stockholder of the Company unless and until
the
Units are settled in Shares upon vesting.
9.
Authorization
to Release Necessary Personal Information.
Grantee
hereby authorizes and directs Grantee's employer to collect, use and transfer
in
electronic or other form, any personal information (the "Data")
regarding Grantee's employment, the nature and amount of Grantee's compensation
and the facts and conditions of Grantee's participation in the Plan (including,
but not limited to, Grantee's name, home address, telephone number, date of
birth, social security number (or any other social or national identification
number), salary, nationality, job title, number of Shares held and the details
of all Awards or any other entitlement to Shares awarded, cancelled, exercised,
vested, unvested or outstanding) for the purpose of implementing, administering
and managing Grantee's participation in the Plan. Grantee understands that
the
Data may be transferred to the Company or any of its Subsidiaries, or to any
third parties assisting in the implementation, administration and management
of
the Plan, including any requisite transfer to a broker or other third party
assisting with the administration of this Agreement under the Plan or with
whom
Shares acquired pursuant to the Units or cash from the sale of such Shares
may
be deposited. Grantee acknowledges that recipients of the Data may be located
in
different countries, and those countries may have data privacy laws and
protections different from those in the country of Grantee's residence.
Furthermore, Grantee acknowledges and understands that the transfer of the
Data
to the Company or any of its Subsidiaries, or to any third parties is necessary
for Grantee's participation in the Plan. Grantee may at any time withdraw the
consents herein by contacting Grantee's local human resources representative
in
writing. Grantee further acknowledges that withdrawal of consent may affect
Grantee's ability to exercise or realize benefits from the Units, and Grantee's
ability to participate in the Plan.
10.
No
Entitlement or Claims for Compensation.
Grantee's rights, if any, in respect of or in connection with this Agreement,
the Units or any other Award are derived solely from the discretionary decision
of the Company to permit Grantee to participate in the Plan and to benefit
from
a discretionary Award. By accepting this Agreement and the Units, Grantee
expressly acknowledges that there is no obligation on the part of the Company
to
continue the Plan and/or grant any additional Awards to Grantee. This Agreement
and the Units are not intended to be compensation of a continuing or recurring
nature, or part of Grantee's normal or expected compensation, and in no way
represents any portion of Grantee's salary, compensation, or other remuneration
for purposes of pension benefits, severance, redundancy, resignation or any
other purpose.
11.
General
Provisions.
(a)
Neither
the Plan nor this Agreement shall be deemed to give Grantee a right to remain
a
Key Service Provider. The Company and its Parents, Subsidiaries and Affiliates
(as applicable) reserve the right to terminate Grantee's Service at any time,
with or without Cause, and for any reason, subject to Applicable Laws, The
Company's Articles of
Incorporation and
Bylaws and a written employment agreement (if any), and Grantee shall be deemed
irrevocably to have waived any claim to damages or specific performance for
breach of contract or dismissal, compensation for loss of office, tort or
otherwise with respect to the Plan or this Agreement that is forfeited and/or
is
terminated by its terms or to any future Award.
(b)
This
Agreement and the Plan represent the entire agreement and understanding between
the parties as to the subject matter hereof and supersede all prior or
contemporaneous agreements, whether written or oral. In the event of a conflict
between this Agreement and the Plan, the provisions of the Plan will govern.
The
Committee has the power to interpret the Plan and this Agreement. All
interpretations and determinations made by the Committee will be binding upon
Grantee, the Company, and all other interested parties.
(c)
If
any
provision of this Agreement is held to be unenforceable for any reason, it
shall
be adjusted rather than voided, if possible, in order to achieve the intent
of
the parties to the extent possible. In any event, all other provisions of this
Agreement shall be deemed valid and enforceable to the full extent
possible.
(d)
This
Agreement shall be governed by the laws of the State of Washington without
reference to its conflicts of law principles.
(e)
No
waiver, alteration or modification of any of the provisions of this Agreement
will be binding, unless in writing and signed by duly authorized representatives
of the parties hereto. This Agreement will be binding on, and will inure to
the
benefit of, the parties and their respective successors and
assigns.
(f)
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original and all of which together shall constitute one
instrument.
TARGETED
GENETICS CORPORATION
By:
__________________________________
Its:
__________________________________
Date:
_________________________________
GRANTEE
_________________________________
Date:
_________________________________
