Exhibit 99.3
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE
SALE IS SO EXEMPT.
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933.
HALOZYME THERAPEUTICS, INC.
NONSTATUTORY STOCK OPTION AGREEMENT
THIS NONSTATUTORY STOCK OPTION AGREEMENT (the "OPTION AGREEMENT") is made
and entered into as of the Date of Option Grant, by and between Halozyme
Therapeutics, Inc. (the "COMPANY") and Andrew Kim (the "OPTIONEE").
The Company has granted to the Optionee an option to purchase certain
shares of Stock, upon the terms and conditions set forth in this Option
Agreement (the "OPTION"). The Option has not been granted under any stock option
plan of the Company, and any shares issued upon the exercise of the Option shall
not reduce the number of shares available for issuance under any stock option
plan of the Company.
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. Whenever used herein, the following terms shall
have their respective meanings set forth below:
(a) "DATE OF OPTION GRANT" means February 27, 2004.
(b) "NUMBER OF OPTION SHARES" means 125,000 shares of Stock,
as adjusted from time to time pursuant to Section 9.
(c) "EXERCISE PRICE" means $1.25 per share of Stock, as
adjusted from time to time pursuant to Section 9.
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(d) "INITIAL VESTING DATE" means the date occurring one (1)
year after the Date of Option Grant.
(a) "VESTED SHARES" means, on any relevant date, the
number of Option Shares which are vested as determined as follows:
Portion Vested
--------------
Prior to Initial Vesting Date 0
On Initial Vesting Date, provided the
Optionee's Service has not terminated 1/4
prior to such date
Plus:
For each full month of the Optionee's
continuous Service from the Initial
Vesting Date until the Option Shares 1/48
are fully vested, an additional
(e) "BOARD" means the Board of Directors of the Company. If
one or more Committees have been appointed by the Board to administer the
Option, "Board" also means such Committee(s).
(f) "CODE" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder.
(g) "COMMITTEE" means the compensation committee or other
committee of the Board duly appointed to administer this Option Agreement and
having such powers as shall be specified by the Board. Unless the powers of the
Committee have been specifically limited, the Committee shall have all of the
powers of the Board granted herein.
(h) "COMPANY" means Halozyme Therapeutics, Inc. a Nevada
corporation, or any successor corporation thereto.
(i) "OFFICER" means any person designated by the Board as an
officer of the Company.
(j) "OPTION EXPIRATION DATE" means the ten (10) year
anniversary of the Date of Option Grant.
(k) "PARENT CORPORATION" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.
(l) "PARTICIPATING COMPANY" means the Company or any Parent
Corporation or Subsidiary Corporation.
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(m) "PARTICIPATING COMPANY GROUP" means, at any point in time,
all corporations collectively which are then Participating Companies.
(n) "SECURITIES ACT" means the Securities Act of 1933, as
amended.
(o) "STOCK" means the common stock of the Company, as adjusted
from time to time in accordance with Section 9.
(p) "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.
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 Option 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. TAX STATUS OF OPTION.
This Option is intended to be a Nonstatutory Stock Option and shall
not be treated as an Incentive Stock Option within the meaning of Section 422(b)
of the Code.
3. ADMINISTRATION.
All questions of interpretation concerning this Option Agreement
shall be determined by the Board. All determinations by the Board shall be final
and binding upon all persons having an interest in the Option. Any Officer 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.
4. EXERCISE OF THE OPTION.
4.1 RIGHT TO EXERCISE. Except as otherwise provided herein, the
Option shall be exercisable on and after the Initial Vesting Date and prior to
the termination of the Option (as provided in Section 6) in an amount not to
exceed the number of Vested Shares less the number of shares previously acquired
upon exercise of the Option. In no event shall the Option be exercisable for
more shares than the Number of Option Shares, as adjusted pursuant to Section 9.
4.2 METHOD OF EXERCISE. Exercise of the Option shall be by written
notice to the Company which must state the election to exercise the Option, the
number of whole shares of Stock for which the Option is being exercised and such
other representations and agreements as to the Optionee's investment intent with
respect to such shares as may be required pursuant to the provisions of this
Option Agreement. The written notice must be signed by the Optionee and must be
delivered in person, by certified or registered mail, return receipt requested,
by confirmed facsimile transmission, or by such other means as the Company may
permit, to the Chief Financial Officer of the Company, or other authorized
representative of the Participating Company Group, prior to the termination of
the Option as set forth in Section 6, accompanied by
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full payment of the aggregate Exercise Price for the number of shares of Stock
being purchased. The Option shall be deemed to be exercised upon receipt by the
Company of such written notice and the aggregate Exercise Price.
4.3 PAYMENT OF EXERCISE PRICE. Payment of the aggregate Exercise
Price for the number of shares of Stock for which the Option is being exercised
shall be made in cash or by check.
4.4 TAX WITHHOLDING. At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company, the Optionee
hereby authorizes withholding from payroll and any other amounts payable to the
Optionee, 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 Group, if any, which arise in connection with the
Option, including, without limitation, obligations arising upon the exercise, in
whole or in part, of the Option. The Optionee is cautioned that the Option is
not exercisable unless the tax withholding obligations of the Participating
Company Group are satisfied. Accordingly, the Optionee may not be able to
exercise the Option when desired even though the Option is vested, and the
Company shall have no obligation to issue a certificate for such shares.
4.5 CERTIFICATE REGISTRATION. The certificate for the shares as to
which the Option is exercised shall be registered in the name of the Optionee,
or, if applicable, in the names of the heirs of the Optionee.
4.6 RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF SHARES. The
grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. The Option may
not be exercised if the issuance of shares of Stock upon exercise 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. In addition, the Option
may not be exercised unless (i) a registration statement under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (ii) in the opinion of legal
counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT
THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.
ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED
EVEN THOUGH THE OPTION IS VESTED. 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 and sale of any
shares subject to the Option shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of the
Option, the Company may require the Optionee 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.
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4.7 FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares upon the exercise of the Option.
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5. NONTRANSFERABILITY OF THE OPTION.
The Option may be exercised during the lifetime of the Optionee only
by the Optionee or the Optionee's guardian or legal representative and may not
be assigned or transferred in any manner except by will or by the laws of
descent and distribution. Following the death of the Optionee, the Option may be
exercised by the Optionee's legal representative or by any person empowered to
do so under the deceased Optionee's will or under the then applicable laws of
descent and distribution.
6. TERMINATION OF THE OPTION.
The Option shall terminate and may no longer be exercised after the
first to occur of (a) the close of business on the Option Expiration Date, (b)
the close of business on the last date for exercising the Option following
termination of the Optionee's Service as described in Section 7, or (c) a Change
in Control to the extent provided in Section 8.
7. EFFECT OF TERMINATION OF SERVICE.
7.1 OPTION EXERCISABILITY.
(a) DISABILITY. If the Optionee's Service terminates because
of the Disability of the Optionee, the Option, to the extent unexercised and
exercisable on the date on which the Optionee's Service terminated, may be
exercised by the Optionee (or the Optionee's guardian or legal representative)
at any time prior to the expiration of twelve (12) months after the date on
which the Optionee's Service terminated, but in any event no later than the
Option Expiration Date.
(b) DEATH. If the Optionee's Service terminates because of the
death of the Optionee, the Option, to the extent unexercised and exercisable on
the date on which the Optionee's Service terminated, may be exercised by the
Optionee's legal representative or other person who acquired the right to
exercise the Option by reason of the Optionee's death at any time prior to the
expiration of twelve (12) months after the date on which the Optionee's Service
terminated, but in any event no later than the Option Expiration Date. The
Optionee's Service shall be deemed to have terminated on account of death if the
Optionee dies within three (3) months after the Optionee's termination of
Service.
(c) TERMINATION AFTER CHANGE IN CONTROL. If the Optionee's
Service ceases as a result of Termination After Change in Control (as defined
below), (i) the Option, to the extent unexercised and exercisable on the date on
which the Optionee's Service terminated, may be exercised by the Optionee (or
the Optionee's guardian or legal representative) at any time prior to the
expiration of six (6) months after the date on which the Optionee's Service
terminated, but in any event no later than the Option Expiration Date, and (ii)
the Option shall become immediately vested and exercisable in full on which the
Optionee's Service terminated.
(d) OTHER TERMINATION OF SERVICE. If the Optionee's Service
with the Participating Company Group terminates for any reason, except
Disability, death, or Termination After Change in Control, the Option, to the
extent unexercised and exercisable by the Optionee on the date on which the
Optionee's Service terminated, may be exercised by the Optionee at any
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time prior to the expiration of three (3) months (or such other longer period of
time as determined by the Board, in its discretion) after the date on which the
Optionee's Service terminated, but in any event no later than the Option
Expiration Date.
7.2 EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the
foregoing, if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until thirty (30) days after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.
7.3 EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b). Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in Section
7.1 of shares acquired upon the exercise of the Option would subject the
Optionee to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Optionee's termination of Service, or (iii) the Option Expiration
Date.
7.4 CERTAIN DEFINITIONS.
(a) "TERMINATION AFTER CHANGE IN CONTROL" shall mean either of
the following events occurring within twelve (12) months after a Change in
Control:
(i) termination by the Participating Company Group of
the Optionee's Service with the Participating Company Group for any reason other
than for cause (as may be defined in the Optionee's employment agreement or by
reference to applicable law); or
(ii) the Optionee's resignation for Good Reason (as
defined below) from all capacities in which the Optionee is then rendering
Service to the Participating Company Group within a reasonable period of time
following the event constituting Good Reason.
Notwithstanding any provision herein to the contrary, Termination After Change
in Control shall not include any termination of the Optionee's Service with the
Participating Company Group which (1) is for cause (as may be defined in the
Optionee's employment agreement or by reference to applicable law); (2) is a
result of the Optionee's death or disability; (3) is a result of the Optionee's
voluntary termination of Service other than for Good Reason; or (4) occurs prior
to the effectiveness of a Change in Control.
(b) "GOOD REASON" shall mean any one or more of the following:
(i) without the Optionee's express written consent, the
assignment to the Optionee of any duties, or any limitation of the Optionee's
responsibilities, substantially inconsistent with the Optionee's positions,
duties, responsibilities and status with the Participating Company Group
immediately prior to the date of the Change in Control;
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(ii) without the Optionee's express written consent, the
relocation of the principal place of the Optionee's Service to a location that
is more than fifty (50) miles from the Optionee's principal place of Service
immediately prior to the date of the Change in Control, or the imposition of
travel requirements substantially more demanding of the Optionee than such
travel requirements existing immediately prior to the date of the Change in
Control;
(iii) any failure by the Participating Company Group to
pay, or any material reduction by the Participating Company Group of, (1) the
Optionee's base salary in effect immediately prior to the date of the Change in
Control (unless reductions comparable in amount and duration are concurrently
made for all other employees of the Participating Company Group with
responsibilities, organizational level and title comparable to the Optionee's),
or (2) the Optionee's bonus compensation, if any, in effect immediately prior to
the date of the Change in Control (subject to applicable performance
requirements with respect to the actual amount of bonus compensation earned by
the Optionee); or any failure by the Participating Company Group to (1) continue
to provide the Optionee with the opportunity to participate, on terms no less
favorable than those in effect for the benefit of any employee or service
provider group which customarily includes a person holding the employment or
service provider position or a comparable position with the Participating
Company Group then held by the Optionee, in any benefit or compensation plans
and programs, including, but not limited to, the Participating Company Group's
life, disability, health, dental, medical, savings, profit sharing, stock
purchase and retirement plans, if any, in which the Optionee was participating
immediately prior to the date of the Change in Control, or their equivalent, or
(2) provide the Optionee with all other fringe benefits (or their equivalent)
from time to time in effect for the benefit of any employee or service provider
group which customarily includes a person holding the employment or service
provider position or a comparable position with the Participating Company Group
then held by the Optionee.
8. CHANGE IN CONTROL.
8.1 DEFINITIONS.
(a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have
occurred if any of the following occurs with respect to the Company: (i) the
direct or indirect sale or exchange in a single or series of related
transactions by the shareholders of the Company of more than fifty percent (50%)
of the voting stock of the Company; (ii) a merger or consolidation in which the
Company is a party; (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or (iv) a liquidation or
dissolution of the Company.
(b) A "CHANGE IN CONTROL" shall mean an Ownership Change Event
or a series of related Ownership Change Events (collectively, a "TRANSACTION")
wherein the shareholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting securities of the Company or, in the case of a Transaction
described in Section 8.1(a)(iii), the corporation or other business entity to
which the assets of the Company
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were transferred (the "TRANSFEREE"), as the case may be. For purposes of the
preceding sentence, indirect beneficial ownership shall include, without
limitation, an interest resulting from ownership of the voting securities of one
or more corporations or other business entities which own the Company or the
Transferee, as the case may be, either directly or through one or more
subsidiary corporations or other business entities. The Board shall have the
right to determine whether multiple sales or exchanges of the voting securities
of the Company or multiple Ownership Change Events are related, and its
determination shall be final, binding and conclusive.
8.2 EFFECT OF CHANGE IN CONTROL ON OPTION.
(a) ASSUMPTION OF OPTIONS. In the event of a Change in
Control, the surviving, continuing, successor, or purchasing corporation or
other business entity or parent thereof, as the case may be (the "ACQUIROR"),
may, without the consent of the Optionee, either assume the Company's rights and
obligations under outstanding Options or substitute for outstanding Options
substantially equivalent options for the Acquiror's stock. In the event that the
Acquiror elects not to assume or substitute for outstanding Options in
connection with a Change in Control, the exercisability and vesting of each such
outstanding Option held by the Optionee, provided the Optionee's Service has not
terminated prior to such date shall be 100% accelerated, effective as of the
date ten (10) days prior to the date of the Change in Control. Any Options which
are neither assumed by the Acquiror in connection with the Change in Control nor
exercised as of the date of the Change in Control shall terminate and cease to
be outstanding effective as of the date of the Change in Control.
Notwithstanding the foregoing, shares acquired upon exercise of an Option prior
to the Change in Control and any consideration received pursuant to the Change
in Control with respect to such shares shall continue to be subject to all
applicable provisions of this Option Agreement. Furthermore, notwithstanding the
foregoing, if the corporation the stock of which is subject to the outstanding
Options immediately prior to an Ownership Change Event described in Section
8.1(a)(i) constituting a Change in Control is the surviving or continuing
corporation and immediately after such Ownership Change Event less than fifty
percent (50%) of the total combined voting power of its voting stock is held by
another corporation or by other corporations that are members of an affiliated
group within the meaning of Section 1504(a) of the Code without regard to the
provisions of Section 1504(b) of the Code, the outstanding Options shall not
terminate unless the Board otherwise provides in its discretion.
(b) CASH-OUT OF OPTIONS. The Board may, in its sole discretion
and without the consent of the Optionee, determine that, upon the occurrence of
a Change in Control, each or any Option outstanding immediately prior to the
Change in Control shall be canceled in exchange for a payment with respect to
each vested share of Stock subject to such canceled Option in (i) cash, (ii)
stock of the Company or of a corporation or other business entity a party to the
Change in Control, or (iii) other property which, in any such case, shall be in
an amount having a Fair Market Value equal to the Fair Market Value of the
consideration to be paid per share of Stock in the Change in Control over the
exercise price per share under such Option (the "SPREAD"). In the event such
determination is made by the Board, the Spread (reduced by applicable
withholding taxes, if any) shall be paid to the Optionee in respect of his
canceled Options as soon as practicable following the date of the Change in
Control.
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9. ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
In the event of any stock dividend, stock split, reverse stock
split, recapitalization, combination, reclassification, or similar change in the
capital structure of the Company, appropriate adjustments shall be made in the
number, Exercise Price and class of shares of stock subject to the Option. If a
majority of the shares which are of the same class as the shares that are
subject to the Option are exchanged for, converted into, or otherwise become
(whether or not pursuant to an Ownership Change Event) shares of another
corporation (the "NEW SHARES"), the Board may unilaterally amend the Option to
provide that the Option is exercisable for New Shares. In the event of any such
amendment, the Number of Option Shares and the Exercise Price shall be adjusted
in a fair and equitable manner, as determined by the Board, in its sole
discretion. Notwithstanding the foregoing, any fractional share resulting from
an adjustment pursuant to this Section 9 shall be rounded down to the nearest
whole number, and in no event may the Exercise Price be decreased to an amount
less than the par value, if any, of the stock subject to the Option. The
adjustments determined by the Board pursuant to this Section 8 shall be final,
binding and conclusive.
10. RIGHTS AS A SHAREHOLDER.
The Optionee shall have no rights as a shareholder with respect to
any shares covered by the Option until the date of the issuance of a certificate
for the shares for which the Option has been exercised (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 such certificate
is issued, except as provided in Section 9.
11. REPRESENTATIONS AND WARRANTIES.
In connection with the receipt of the Option and any acquisition of
shares upon the exercise thereof (collectively, the "SECURITIES"), the Optionee
hereby agrees, represents and warrants as follows:
11.1 INVESTMENT INTENT. The Optionee is acquiring the Securities
solely for the Optionee's own account for investment and not with a view to or
for sale in connection with any distribution of the Securities or any portion
thereof and not with any present intention of selling, offering to sell or
otherwise disposing of or distributing the Securities or any portion thereof in
any transaction other than a transaction exempt from registration under the
Securities Act. The Optionee further represents that the entire legal and
beneficial interest of the Securities is being acquired, and will be held, for
the account of the Optionee only and neither in whole nor in part for any other
person.
11.2 ABSENCE OF SOLICITATION. The Optionee was not presented with or
solicited by any form of general solicitation or general advertising, including,
but not limited to, any advertisement, article, notice, or other communication
published in any newspaper, magazine, or similar media, or broadcast over
television, radio or similar communications media, or presented at any seminar
or meeting whose attendees have been invited by any general solicitation or
general advertising.
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11.3 RESIDENCE. The Optionee's principal residence is located at the
address indicated beneath the Optionee's signature below.
11.4 INFORMATION CONCERNING THE COMPANY. The Optionee is aware of
the Company's business affairs and financial condition and has acquired
sufficient information about the Company to reach an informed and knowledgeable
decision to acquire the Securities. The Optionee further represents and warrants
that the Optionee has discussed the Company and its plans, operations and
financial condition with its Officers, has received all such information as the
Optionee deems necessary and appropriate to enable the Optionee to evaluate the
financial risk inherent in acquiring the Securities and has received
satisfactory and complete information concerning the business and financial
condition of the Company in response to all inquiries in respect thereof.
11.5 ECONOMIC RISK. The Optionee realizes that his acquisition of
the Securities will be a highly speculative investment and that the Optionee is
able, without impairing his or her financial condition, to hold the Securities
for an indefinite period of time and to suffer a complete loss on the Optionee's
investment.
11.6 CAPACITY TO PROTECT INTERESTS. The Optionee has (i) a
preexisting personal or business relationship with the Company or any of its
Officers, directors, or controlling persons, consisting of personal or business
contacts of a nature and duration to enable the Optionee to be aware of the
character, business acumen and general business and financial circumstances of
the person with whom such relationship exists, or (ii) such knowledge and
experience in financial and business matters as to make the Optionee capable of
evaluating the merits and risks of an investment in the Securities and to
protect the Optionee's own interests in the transaction, or (iii) both such
relationship and such knowledge and experience.
11.7 RESTRICTED SECURITIES. The Optionee understands and
acknowledges that:
(a) The issuance of the Securities to the Optionee has not
been registered under the Securities Act, and the Securities must be held
indefinitely unless a transfer of the Securities is subsequently registered
under the Securities Act or an exemption from such registration is available,
and that the Company is under no obligation to register the Securities;
(b) The Company will make a notation in its records of the
aforementioned restrictions on transfer and legends.
11.8 DISPOSITION UNDER RULE 144. The Optionee understands that any
shares acquired upon exercise of the Option will be restricted securities within
the meaning of Rule 144 promulgated under the Securities Act; that the exemption
from registration under Rule 144 will not be available in any event for at least
one year from the date of acquisition of the shares, and even then will not be
available unless (a) a public trading market then exists for the Common Stock of
the Company, (b) adequate information concerning the Company is then available
to the public, and (c) other terms and conditions of Rule 144 are complied with;
and that any sale of the shares may be made only in limited amounts in
accordance with such terms and conditions. There can be no assurance that the
requirements of Rule 144 will be met, or that the shares will ever be salable.
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11.9 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting
the Optionee's representations and warranties set forth above, the Optionee
further agrees that the Optionee will in no event make any disposition of all or
any portion of any shares which the Optionee acquires upon exercise of the
Option unless:
(a) 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
(b) The Optionee will have notified the Company of the
proposed disposition and furnished the Company with a detailed statement of the
circumstances surrounding the proposed disposition, and either:
(i) The Optionee will have furnished the Company with an
opinion of the Optionee's own counsel to the effect that such disposition will
not require registration of such shares under the Securities Act, and such
opinion of the Optionee's counsel will have been concurred in by counsel for the
Company and the Company will have advised the Optionee of such concurrence; or
(ii) The disposition is made in compliance with Rule 144
or Rule 701 after the Optionee has furnished the Company such detailed statement
and after the Company has had a reasonable opportunity to discuss the matter
with the Optionee.
11.10 RELIANCE BY COMPANY. The Optionee understands that the Option
and any shares acquired upon exercise of the Option have not been qualified
under the Corporate Securities Law of 1968, as amended, of the State of
California by reason of a specific exemption therefrom, which exemption depends
upon, among other things, the bona fide nature of the Optionee's representations
as expressed herein. The Optionee understands that the Company is relying on the
Optionee's representations and warrants that the Company is entitled to rely on
such representations and that such reliance is reasonable.
12. LEGENDS.
The Company may at any time place legends referencing any applicable
federal, state or foreign securities law restrictions on all certificates
representing shares of stock subject to the provisions of this Option Agreement.
The Optionee shall, at the request of the Company, promptly present to the
Company any and all certificates representing shares acquired pursuant to the
Option in the possession of the Optionee 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:
12.1 "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF
COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE
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COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT."
13. LOCK-UP AGREEMENT.
The Optionee hereby agrees that in the event of any underwritten
public offering of stock, including an initial public offering of stock, made by
the Company pursuant to an effective registration statement filed under the
Securities Act, the Optionee shall not offer, sell, contract to sell, pledge,
hypothecate, grant any option to purchase or make any short sale of, or
otherwise dispose of any shares of stock of the Company or any rights to acquire
stock of the Company for such period of time from and after the effective date
of such registration statement as may be established by the underwriter for such
public offering; provided, however, that such period of time shall not exceed
one hundred eighty (180) days from the effective date of the registration
statement to be filed in connection with such public offering. The foregoing
limitation shall not apply to shares registered in the public offering under the
Securities Act.
14. RESTRICTIONS ON TRANSFER OF SHARES.
No shares acquired upon exercise of the Option may be sold,
exchanged, transferred (including, without limitation, any transfer to a nominee
or agent of the Optionee), assigned, pledged, hypothecated or otherwise disposed
of, including by operation of law, in any manner which violates any of the
provisions of this Option Agreement, 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 Option 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.
15. MISCELLANEOUS PROVISIONS.
15.1 BINDING EFFECT. Subject to the restrictions on transfer set
forth herein, this Option Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators,
successors and assigns.
15.2 TERMINATION OR AMENDMENT. The Board may terminate or amend the
Option at any time; provided, however, that except as provided in Section 8.2 in
connection with a Change in Control, no such termination or amendment may
adversely affect the Option or any unexercised portion hereof without the
consent of the Optionee unless such termination or amendment is necessary to
comply with any applicable law or government regulation. No amendment or
addition to this Option Agreement shall be effective unless in writing.
15.3 NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Option Agreement provides for effectiveness only upon actual receipt
of such notice) 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 at the address shown below that party's signature
or at such other address as such party may designate in writing from time to
time to the other party.
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15.4 INTEGRATED AGREEMENT. This Option Agreement constitutes the
entire understanding and agreement of the Optionee and the Participating Company
Group with respect to the subject matter contained herein and supersedes any
prior agreements, understandings, restrictions, representations, or warranties
among the Optionee and the Participating Company Group with respect to such
subject matter other than those as set forth or provided for herein. To the
extent contemplated herein, the provisions of this Option Agreement shall
survive any exercise of the Option and shall remain in full force and effect.
15.5 APPLICABLE LAW. This Option 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.
15.6 COUNTERPARTS. This Option Agreement 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.
HALOZYME THERAPEUTICS, INC.
By:_______________________________________
Title:____________________________________
11588 Sorrento Valley Road, Suite 17
San Diego, CA 92121
The Optionee represents that the Optionee is familiar with the terms and
provisions of this Option Agreement and hereby accepts the Option subject to all
of the terms and provisions thereof. The Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under this Option Agreement.
OPTIONEE
Date:_____________________________ __________________________________________
Optionee Address:
__________________________________________
__________________________________________
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Optionee: __________________________
Date: __________________________
NONSTATUTORY STOCK OPTION
EXERCISE NOTICE
Halozyme Therapeutics, Inc.
11588 Sorrento Valley Road, Suite 17
San Diego, CA 92121
Attention: Chief Financial Officer
Ladies and Gentlemen:
1. Exercise of Option. I was granted a nonstatutory stock option (the
"OPTION") to purchase shares of the common stock of Halozyme Therapeutics, Inc.
(the "COMPANY") on ___________________, 20__, pursuant to a Nonstatutory Stock
Option Agreement (the "OPTION AGREEMENT"). I hereby elect to exercise the Option
as to a total of _______________ shares of the common stock of the Company (the
"SHARES"), all of which _____________ are Vested Shares in accordance with the
Option Agreement.
2. Payments. Enclosed herewith is full payment in the aggregate amount of
$_____________ (representing $_______ per share) for the Shares in the manner
set forth in the Option Agreement.
3. Tax Withholding. I authorize payroll withholding and otherwise will
make adequate provision for federal, state, local and foreign tax withholding
obligations of the Company, if any in connection with the Option.
4. Optionee Information.
My address is:________________________________________________________
________________________________________________________
My Social Security Number is:_________________________________________
3. Binding Effect. I agree that the Shares are being acquired in
accordance with and subject to the terms, provisions and conditions of the
Option Agreement, to all of which I hereby expressly assent. This Agreement
shall inure to the benefit of and be binding upon the my heirs, executors,
administrators, successors and assigns.
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4. Transfer. I understand and acknowledge that the Shares have not been
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
and that consequently the Shares must be held indefinitely unless they are
subsequently registered under the Securities Act, an exemption from such
registration is available, or they are sold in accordance with Rule 144 under
the Securities Act. I further understand and acknowledge that the Company is
under no obligation to register the Shares. I understand that the certificate or
certificates evidencing the Shares will be imprinted with legends which prohibit
the transfer of the Shares unless they are registered or such registration is
not required in the opinion of legal counsel satisfactory to the Company.
I am aware that Rule 144 under the Securities Act, which permits limited
public resale of securities acquired in a nonpublic offering, is not currently
available with respect to the Shares and, in any event, is available only if
certain conditions are satisfied. I understand that any sale of the Shares that
might be made in reliance upon Rule 144 may only be made in limited amounts in
accordance with the terms and conditions of such rule and that a copy of Rule
144 will be delivered to me upon request.
I understand that I am purchasing the Shares pursuant to the terms of my
Option Agreement, a copy of which I have received and carefully read and
understand.
Very truly yours,
__________________________________________
(Signature)
__________________________________________
(Optionee's Name Printed)
Receipt of the above is hereby acknowledged.
Halozyme Therapeutics, Inc.
By:_______________________________
Title:____________________________
Dated:____________________________
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