exv10w25



 







Exhibit 10.25




ARADIGM CORPORATION

2005 Equity Incentive Plan




Restricted Stock Bonus Agreement




     Pursuant to the Restricted Stock Bonus Grant Notice (“Grant Notice”) and this Restricted
Stock Bonus Agreement (collectively, the “Award”) and in consideration of your past services,
Aradigm Corporation (the “Company”) has awarded you a stock bonus under its 2005 Equity Incentive
Plan (the “Plan”) for the number of shares of the Company’s Common Stock subject to the Award as
indicated in the Grant Notice. Defined terms not explicitly defined in this Restricted Stock Bonus
Agreement but defined in the Plan shall have the same definitions as in the Plan.



     The details of your Award are as follows:



     1. Vesting. Subject to the limitations contained herein, your Award will vest as
provided in the Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.



     2. Number of Shares. The number of shares subject to your Award may be adjusted from
time to time for Capitalization Adjustments, as provided in the Plan.



     3. Securities Law Compliance. You may not be issued any shares under your Award
unless the shares are either (a) then registered under the Securities Act or (b) the Company has
determined that such issuance would be exempt from the registration requirements of the Securities
Act. Your Award must also comply with other applicable laws and regulations governing the Award,
and you will not receive such shares if the Company determines that such receipt would not be in
material compliance with such laws and regulations.



     4. Right of Reacquisition.



          (a) To the extent provided in the Company’s bylaws, as amended from time to time, the Company
shall have the right to reacquire all or any part of the shares received pursuant to your Award (a
“Reacquisition Right”).




          (b) To the extent a Reacquisition Right is not provided in the Company’s bylaws, as amended
from time to time, the Company shall have a Reacquisition Right as to the shares you received
pursuant to your Award that have not as yet vested in accordance with the Vesting Schedule on the
Grant Notice (“Unvested Shares”) on the following terms and conditions:




               (i) The Company, shall simultaneously with termination of your Continuous Service
automatically reacquire for no consideration all of the Unvested Shares, unless the Company agrees
to waive its Reacquisition Right as to some or all of the Unvested Shares. Any such waiver shall
be exercised by the Company by written notice to you or your representative (with a copy to the
Escrow Holder as defined below) within ninety (90) days after



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the termination of your Continuous Service, and the Escrow Holder may then release to you the
number of Unvested Shares not being reacquired by the Company. If the Company does not waive its
Reacquisition Right as to all of the Unvested Shares, then upon such termination of your Continuous
Service, the Escrow Holder shall transfer to the Company the number of shares the Company is
reacquiring.




                    (ii) The Company initially shall have the right to reacquire Unvested Shares for no monetary
consideration (that is, for $0.00); provided, however, that the Company’s right to reacquire
Unvested Shares for no monetary consideration shall lapse at a minimum rate of twenty percent (20%)
of the total number of shares subject to your Award per year over five (5) years from the Date of
Grant.




                    (iii) The shares issued under your Award shall be held in escrow pursuant to the terms of the
Joint Escrow Instructions attached to the Grant Notice as Attachment IV. You agree to execute two
(2) Assignment Separate From Certificate forms (with date and number of shares blank) substantially
in the form attached to the Grant Notice as Attachment III and deliver the same, along with the
certificate or certificates evidencing the shares, for use by the escrow agent pursuant to the
terms of the Joint Escrow Instructions.




                    (iv) Subject to the provisions of your Award, you shall, during the term of your Award,
exercise all rights and privileges of a shareholder of the Company with respect to the shares
deposited in escrow. You 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.




                    (v) If, from time to time, there is any stock dividend, stock split or other change in the
character or amount of any of the outstanding stock of the corporation the stock of which is
subject to the provisions of your Award, then in such event any and all new, substituted or
additional securities to which you is entitled by reason of your ownership of the shares acquired
under your Award shall be immediately subject to the Reacquisition Right with the same force and
effect as the shares subject to this Reacquisition Right immediately before such event.




     5. Restrictive Legends. The shares issued under your Award shall be endorsed with
appropriate legends determined by the Company.



     6. Award not a Service Contract. Your Award is not an employment or service
contract, and nothing in your Award shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or on the part of the
Company or an Affiliate to continue your employment. In addition, nothing in your Award shall
obligate the Company or an Affiliate, their respective shareholders, boards of directors, Officers
or Employees to continue any relationship that you might have as a Director or Consultant for the
Company or an Affiliate.



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     7. Withholding Obligations.




          (a) At the time your Award is made, or at any time thereafter as requested by the Company, you
hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree
to make adequate provision for any sums required to satisfy the federal, state, local and foreign
tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with
your Award.




          (b) Unless the tax withholding obligations of the Company and/or any Affiliate are satisfied,
the Company shall have no obligation to issue a certificate for such shares or release such shares
from any escrow provided for herein.




     8. Tax Consequences. The acquisition and vesting of the shares may have adverse tax
consequences to you that 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 your Award. YOU ACKNOWLEDGE THAT IT IS YOUR OWN RESPONSIBILITY, AND NOT THE
COMPANY’S, TO FILE A TIMELY ELECTION UNDER CODE SECTION 83(B), EVEN IF YOU REQUEST THE COMPANY TO
MAKE THE FILING ON YOUR BEHALF.



     9. Notices. Any notices provided for in your Award or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.



     10. Miscellaneous.



          (a) The rights and obligations of the Company under your Award shall be transferable to any
one or more persons or entities, and all covenants and agreements hereunder shall inure to the
benefit of, and be enforceable by the Company’s successors and assigns. Your rights and obligations
under your Award may only be assigned with the prior written consent of the Company.




          (b) You agree upon request to execute any further documents or instruments necessary or
desirable in the sole determination of the Company to carry out the purposes or intent of your
Award.




          (c) You acknowledge and agree that you have reviewed your Award in its entirety, have had an
opportunity to obtain the advice of counsel prior to executing and accepting your Award and fully
understand all provisions of your Award.




     11. Governing Plan Document. Your Award is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your Award, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your Award
and those of the Plan, the provisions of the Plan shall control.




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Joint Escrow Instructions




February __, 2006




Corporate Secretary

Aradigm Corporation

3929 Point Eden Way

Hayward, CA 94545




Dear Sir/Madam:




     As Escrow Agent for both Aradigm Corporation, a California corporation (the “Company”), and
the undersigned recipient of stock of the Company (“Recipient”), you are hereby authorized and
directed to hold the documents delivered to you pursuant to the terms of that certain Restricted
Stock Bonus Grant Notice (the “Grant Notice”), dated February ___, 2006 to which a copy of these
Joint Escrow Instructions is attached as Attachment IV, and pursuant to the terms of that certain
Restricted Stock Bonus Agreement (“Agreement”), which is Attachment I to the Grant Notice, in
accordance with the following instructions:



     1. In the event Recipient ceases to render services to the Company or an affiliate of the
Company during the vesting period set forth in the Grant Notice, the Company or its assignee will
give to Recipient and you a written notice specifying that the shares of stock shall be transferred
to the Company. Recipient and the Company hereby irrevocably authorize and direct you to close the
transaction contemplated by such notice in accordance with the terms of said notice.



     2. At the closing you are directed (a) to date any stock assignments necessary for the
transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver
same, together with the certificate evidencing the shares of stock to be transferred, to the
Company.



     3. Recipient irrevocably authorizes the Company to deposit with you any certificates
evidencing shares of stock to be held by you hereunder and any additions and substitutions to said
shares as specified in the Grant Notice. Recipient does hereby irrevocably constitute and appoint
you as Recipient’s attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities and other property all documents of assignment and/or transfer and all stock
certificates necessary or appropriate to make all securities negotiable and complete any
transaction herein contemplated.



     4. This escrow shall terminate upon vesting of the shares or upon the earlier return of the
shares to the Company.



     5. If at the time of termination of this escrow you should have in your possession any
documents, securities, or other property belonging to Recipient, you shall deliver all of same to
any pledgee entitled thereto or, if none, to Recipient and shall be discharged of all further
obligations hereunder.



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     6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed
by all of the parties hereto.



     7. You shall be obligated only for the performance of such duties as are specifically set
forth herein and may rely and shall be protected in relying or refraining from acting on any
instrument reasonably believed by you to be genuine and to have been signed or presented by the
proper party or parties or their assignees. You shall not be personally liable for any act you may
do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Recipient while acting in
good faith and any act done or omitted by you pursuant to the advice of your own attorneys shall be
conclusive evidence of such good faith.



     8. You are hereby expressly authorized to disregard any and all warnings given by any of the
parties hereto or by any other person or corporation, excepting only orders or process of courts of
law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of
any court. In case you obey or comply with any such order, judgment or decree of any court, you
shall not be liable to any of the parties hereto or to any other person, firm or corporation by
reason of such compliance, notwithstanding any such order, judgment or decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered without
jurisdiction.



     9. You shall not be liable in any respect on account of the identity, authority or rights of
the parties executing or delivering or purporting to execute or deliver the Grant Notice or any
documents or papers deposited or called for hereunder.



     10. You shall not be liable for the outlawing of any rights under any statute of limitations
with respect to these Joint Escrow Instructions or any documents deposited with you.



     11. You shall be entitled to employ such legal counsel, including but not limited to Cooley
Godward LLP, and other experts as you may deem necessary properly to advise you in connection with
your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel
reasonable compensation therefor.



     12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be
Secretary of the Company or if you shall resign by written notice to each party. In the event of
any such termination, the Company may appoint any officer or assistant officer of the Company as
successor Escrow Agent and Recipient hereby confirms the appointment of such successor or
successors as his attorney-in-fact and agent to the full extent of your appointment.



     13. If you reasonably require other or further instruments in connection with these Joint
Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments.



     14. It is understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the securities, you may (but are not obligated to)
retain in your possession without liability to anyone all or any part of said securities until such
dispute shall have been settled either by mutual written agreement of the parties concerned or by a
final order, decree or judgment of a court of competent jurisdiction after the time for



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appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever
to institute or defend any such proceedings.




     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 any United States Post Box, by
registered or certified mail with postage and fees prepaid, addressed to each of the other parties
hereunto entitled at the following addresses, or at such other addresses as a party may designate
by ten (10) days’ written notice to each of the other parties hereto:



	 	 	 	 	 	 	 
	 

	 	Company:
	 	Aradigm Corporation

3929 Point Eden Way

Hayward, CA 94545

Attn: Chief Financial Officer	 	 
	 

	 	Recipient:
	 	 
 

	 	 
	 

	 	 
	 	 
 

	 	 
	 

	 	 
	 	 
 

	 	 
	 

	 	 
	 	 
 

	 	 
	 

	 	Escrow Agent:
	 	Aradigm Corporation

3929 Point Eden Way

Hayward, CA 94545

Attn: Corporate Secretary	 	 






     16. By signing these Joint Escrow Instructions you become a party hereto only for the purpose
of said Joint Escrow Instructions; you do not become a party to the Grant Notice.



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     17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and
their respective successors and permitted assigns. It is understood and agreed that references to
“you” or “your” herein refer to the original Escrow Agent and to any and all successor Escrow
Agents. It is understood and agreed that the Company may at any time or from time to time assign
its rights under the Grant Notice and these Joint Escrow Instructions in whole or in part.



	 	 	 	 	 
	 	Very truly yours,





Aradigm Corporation

 	 
	 	By:  	 	 
	 	 	 	 
	 	 	Recipient
	 	 	 	 
	 
	 	Name:	 	 
	 



Escrow Agent:



________________________





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Assignment Separate From Certificate





     For Value Received and pursuant to that certain Restricted Stock Bonus Grant
Notice and Restricted Stock Bonus Agreement (the “Award”), ____________________hereby sells, assigns and transfers unto
Aradigm Corporation, a California corporation (“Assignee”)
____________________ (___________)
shares of the common stock of the Assignee, standing in the undersigned’s name on the books of said
corporation represented by Certificate No. ___herewith and do hereby irrevocably constitute and
appoint _____________ as attorney-in-fact to transfer the said stock on the books of the
within named Company with full power of substitution in the premises. This Assignment may be used
only in accordance with and subject to the terms and conditions of the Award, in connection with
the reacquisition of shares of Common Stock of the Corporation issued to the undersigned pursuant
to the Award, and only to the extent that such shares remain subject to the Corporation’s
Reacquisition Right under the Award.



     Dated: ___________________



	 	 	 	 	 
	 	Signature: _________________________

 	 
	 	 	 
	 	 	 
	 	 	 
	 




     [Instruction: 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 Reacquisition Right set forth
in the Award without requiring additional signatures on your part.]