Exhibit (d)(viii)
LOCK-UP AGREEMENT
This LOCK-UP AGREEMENT (this “Agreement”) is made and entered into as of May 11, 2004, by and among Theravance, Inc., a Delaware corporation (the “Company”), (“Stockholder”), and SmithKline Beecham Corporation, a Pennsylvania corporation (“GSK”). The Company, Stockholder and GSK are individually referred to herein as a “Party” and are collectively referred to herein as the “Parties.” The Company’s Board of Directors is referred to herein as the “Board.”
WITNESSETH:
WHEREAS, the Company and GSK have entered into that certain Class A Common Stock Purchase Agreement dated as of March 30, 2004 (the “Purchase Agreement”), which provides for, among other things, the purchase by GSK of shares of the Company’s Class A Common Stock (the “Class A Stock”);
WHEREAS, the Company and Glaxo Group Limited, a limited liability company organized under the laws of England and Wales (“GGL”) have entered into that certain Strategic Alliance Agreement dated as of March 30, 2004 (the “Alliance Agreement”) pursuant to which, among other things, the Company will grant GGL an option to develop and commercialize certain therapeutic compounds on an exclusive, worldwide basis;
WHEREAS, the Company’s Restated Certificate of Incorporation (the “Restated Certificate”) and that certain Governance Agreement by and between the Company, GGL, GSK and GlaxoSmithKline plc, a public limited company organized under the laws of England and Wales, of even date herewith (the “Governance Agreement”) provides for (i) a redemption of 50% of certain outstanding Common Stock of the Company (the “Call”) or, in the alternative, (ii) the right of certain holders of Common Stock to require the Company to redeem up to 50% of the shares of Common Stock held by such holder (the “Put”); and
WHEREAS, to induce GSK to enter into the Purchase Agreement and the Governance Agreement and to induce GGL to enter into the Alliance Agreement and the Governance Agreement, the Company and Stockholder desire to enter into this Agreement with GSK.
NOW, THEREFORE, in consideration of the foregoing premises and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Restrictions on Sales.
a. For purposes of this Agreement, the term “Stockholder Shares” shall include shares of the Company’s Common Stock (the “Common Stock”) and options to purchase shares of the Company’s Common Stock and the shares issued upon exercise thereof, owned as of the date of this Agreement directly by Stockholder (including holding as a custodian) or with respect to which Stockholder has beneficial ownership within the rules and regulations of the United States Securities and Exchange Commission.
b. Subject to Sections 2 and 3 below, Stockholder hereby agrees on behalf of himself and any transferee or assignee of any Stockholder Shares, during the period beginning from the Effective Date (as such term is defined in the Alliance Agreement) and ending on the Call/Put Termination Date (as such term is defined in the Governance Agreement), not to offer, sell, contract to sell, pledge, grant any option, right or warrant to purchase, sell any option or contract to purchase, purchase any option or contract to sell, make any short sale, otherwise dispose of, directly or indirectly, 50% of the Stockholder Shares (the “Restricted Stockholder Shares”) (or any security that includes, relates to, or derives any significant part of its value from the Stockholder Shares or from the class(es) of shares of which the Stockholder Shares form a part), or enter into any swap or similar agreement that transfers, in whole or in part, the economic risk or benefit of ownership of the Restricted Stockholder Shares, whether any of the foregoing transactions is to be settled by delivery of shares, in cash or otherwise. The foregoing restrictions are expressly agreed to preclude the Stockholder from engaging in any hedging or other transaction that is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Restricted Stockholder Shares (even if such shares would be disposed of by someone other than the Stockholder).
c. For the avoidance of doubt, the Parties hereby acknowledge and agree that, notwithstanding anything to the contrary herein, Stockholder shall be subject to having the Stockholder Shares held by Stockholder redeemed pursuant to the Call provisions of the Restated Certificate and the Governance Agreement. Stockholder hereby agrees, however, not to exercise Stockholder’s Put right pursuant to the Restated Certificate and the Governance Agreement with respect to the Restricted Stockholder Shares.
2. Permitted Transfers. Notwithstanding anything to the contrary in the foregoing, Stockholder may, transfer Restricted Stockholder Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or (iii) with the prior written consent of GSK; provided, however, that the Stockholder Shares will remain subject to any restrictions on transfer set forth in the agreement pursuant to which such Stockholder Shares were originally issued. For purposes of this Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. The undersigned Stockholder also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of Restricted Stockholder Shares except in compliance with the foregoing restrictions.
3. Termination of Restrictions. The obligations of and restrictions upon Stockholder pursuant to this Agreement shall no longer apply in the event of (i) Stockholder’s Involuntary Termination (as such term is defined below) or (ii) a Change in Control (as such term is defined in the Governance Agreement) of the Company approved by a majority of the Independent Directors (as defined in the Governance Agreement) and consummated prior to July 1, 2007 that results in payment or issuance prior to such date of cash or securities with a fair market value prior to such date (as determined in good faith by a majority of the Board) equal to or greater than $12.50 per share of Common Stock (appropriately adjusted to take into account
stock dividends, stock splits, recapitalization and the like). For purposes of this Section 3, “Involuntary Termination” shall mean the termination of Stockholder’s service as an employee, consultant or member of the Board which occurs by reason of: (i) his involuntary dismissal or discharge by the Company for reasons other than Misconduct (as such term is defined below), or (ii) his voluntary resignation following (A) a change in his position with the Company which materially reduces his level of responsibility, (B) a material reduction in his level of compensation (including base salary, fringe benefits and participation in bonus or incentive programs) or (C) a relocation of his place of employment by more than fifty (50) miles, provided and only if such change, reduction or relocation is effected by the Company without the individual’s consent. “Misconduct” shall mean the commission of any material act of fraud, embezzlement or dishonesty by Stockholder, any material unauthorized use or disclosure by such person of confidential information or trade secrets of the Company, or any other intentional material misconduct by such person adversely affecting the business or affairs of the Company.
4. Legend on Share Certificates. Each certificate representing any Restricted Stockholder Shares shall be endorsed by the Company with a legend reading substantially as follows:
“THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A LOCK-UP AGREEMENT (A COPY OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST FROM THE ISSUER), AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID LOCK-UP AGREEMENT.”
If to the Company:
Theravance, Inc.
901 Gateway Boulevard
South San Francisco, CA 94080
Facsimile:
Attn: General Counsel
With a copy to:
Gunderson Dettmer et al.
155 Contitution Drive
Menlo Park, CA 94025
Facsimile:
Attn: Christopher D. Dillon
Jay K. Hachigian
If to Stockholder:
Rick E Winningham
c/o Theravance, Inc.
901 Gateway Boulevard
South San Francisco, CA 94080
Facsimile:
If to GSK:
SmithKline Beecham Corporation
One Franklin Plaza (FP2355)
200 N. 16th Street
Philadelphia, PA 19102
Attn: Company Secretary
Facsimile:
With a copy to:
GlaxoSmithKline
One Franklin Plaza (FP2355)
200 N. 16th Street
Philadelphia, PA 19102
Facsimile:
Attn: Corporate Law
and with a copy to:
GlaxoSmithKline
Greenford Road
Greenford
Middlesex
UB6 0HE
United Kingdom
Attn: Vice President, Worldwide Business Development
Facsimile:
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.
THERAVANCE, INC. | ||
|
| |
|
| |
| By: |
|
| Name: |
|
| Title: |
|
|
| |
|
| |
| SMITHKLINE BEECHAM CORPORATION | |
|
| |
|
| |
| By: |
|
| Name: |
|
| Title: |
|
|
| |
|
| |
| STOCKHOLDER | |
|
| |
|
| |
