Document:

Exhibit 10.1

 

[Theravance Biopharma Letterhead]

 

May 31, 2017

 

Revised Offer

 

Shehnaaz Suliman, M.D., MPhil, M.B.A.

 

Dear Shehnaaz:

 

Theravance Biopharma US, Inc. (the “Company” or “Theravance Biopharma US”) is pleased to offer you the exempt position of Sr. Vice President, Corporate Development & Strategy, reporting to Rick Winningham.  Your salary on an annualized basis will be $475,000.   In addition, you will be paid a one-time employment bonus of $150,000 less taxes and payable in your first paycheck.  If you choose to leave Theravance Biopharma US within the first two years of your employment, this bonus will be fully repayable to Theravance Biopharma US.  You will be eligible to receive an annual discretionary bonus target of 50% of your annual salary, based on the Company’s performance against its annual goals and a review of your individual performance.  You must be an active employee in good standing at the time the bonus is paid in order to receive the bonus.  The Company’s bonus percentage targets may change from time-to-time at the sole discretion of the Theravance Biopharma, Inc. Board of Directors (or applicable committee thereof).  Performance (i.e., an annual discretionary bonus) and merit reviews will be conducted annually and will be calculated on a prorated basis, based on date of hire.  For 2017 an annual discretionary bonus will not be calculated on prorated basis so long as (i) your start date is no later than August 15, 2017 and (ii) you have remained in continuous service through the date that annual discretionary bonuses are paid.  This offer will expire on Thursday, June 1, 2017.

 

Subject to the approval by the appropriate committee of the Theravance Biopharma, Inc. Board of Directors, you will be granted an option to purchase 170,000 ordinary shares of Theravance Biopharma, Inc. at a per share purchase price equal to the fair market value of one Theravance Biopharma, Inc. ordinary share on the date of grant, which we anticipate will be on or around the first business day of the month following your employment start date.  The number of shares subject to the option and the vesting and exercise details of your option grant will be set forth in your option paperwork, but in general your option will vest monthly over the first four years of your employment, with a one year “cliff” provision that prevents it from being exercised before the first anniversary of the grant date. The option granted to you will be contingent on your execution of Theravance Biopharma, Inc.’s standard form of option agreement and will be subject to all of the terms and conditions contained in the Theravance Biopharma, Inc. 2013 Equity Incentive Plan.

 

Subject to the approval by the appropriate committee of the Theravance Biopharma, Inc. Board of Directors, you will also be granted a restricted share unit (RSU) award for 20,000 ordinary shares of Theravance Biopharma, Inc.  The RSU award will be subject to the terms and conditions applicable to restricted share units awarded under the Theravance Biopharma, Inc. 2013 Equity Incentive Plan and shall be evidenced by the applicable form of RSU agreement as approved by the committee.  The RSU award will vest as follows: 25% of the RSUs will vest on the first Company Vesting Date after the second anniversary of the grant date; 25% of the shares will vest on the first Company Vesting Date after the third anniversary of the grant date; 25% of the shares will vest on the first Company Vesting Date after the fourth anniversary of your Start Date; and 25% of the shares will vest on the first Company Vesting Date after the fifth anniversary of the grant date, provided you remain in continuous service through each such vesting date, and as described in the applicable RSU agreement.  A “Company Vesting Date” means February 20, May 20, August 20 or November 20.

 

 

Subject to the approval by the appropriate committee of the Theravance Biopharma, Inc. Board of Directors, you will also be granted a performance-contingent restricted share unit (RSU) award for 50,000 ordinary shares of Theravance Biopharma, Inc. The RSU award will be subject to the terms and conditions applicable to restricted share units awarded under the applicable Theravance Biopharma, Inc. Equity Incentive Plan and the applicable award agreement.  Vesting of these performance contingent RSUs is subject to the achievement of performance milestones described in the attached Exhibit A by December 31, 2020 and continued employment, both of which must be satisfied in order for the RSUs to vest.  Subject to your continued employment through the applicable vesting date:

 

·                  One-half of the RSU award will vest on the first Company Vesting Date (as defined above) that occurs on or after achievement of any one of the three performance milestones and related certification of achievement by the Compensation Committee of Theravance Biopharma, Inc. (“Compensation Committee”); and

·                  One-half of the RSU award will vest on the first Company Vesting Date that occurs on or after the one (1) year anniversary of achievement of a second performance milestone and related certification of achievement by the Compensation Committee.

 

If Theravance Biopharma, Inc. is subject to a change in control before December 31, 2020 and prior to achievement of the performance milestones, a portion of the RSU award (determined based on the value of the transaction consideration) will vest based on your continued employment through the first and second anniversaries of the change in control and any portion that does not so convert will be forfeited.

 

Theravance Biopharma US provides a comprehensive company-paid benefits package that begins on your first day of employment.  Benefits are provided by Theravance Biopharma US to you and your dependents at a minimal cost.  Included are medical, vision and dental coverage, life insurance, long-term disability insurance and a flexible spending plan.  Additionally, we offer a 401(k) plan and an Employee Stock Purchase Plan.  Additional information will be provided at New Employee Orientation shortly after you begin employment.

 

As a condition of employment, you will be provided a copy of our Company Handbook and will be expected to acknowledge and abide by our policies.  You will also be required to accept and abide by the terms of our Proprietary Information and Inventions Agreement.  Pursuant to that Agreement, you must comply with Theravance Biopharma US’s strict company policy that prohibits any new employee from using or bringing with them from any prior employer any confidential information, trade secrets, proprietary materials or processes of such former employers.  In addition, you will be required to present documents establishing your legal right to work in the United States as required by the government’s Form I-9.

 

While we hope that your employment with the Company will be mutually satisfactory, employment with Theravance Biopharma US is for no specific period of time.  As a result, either you or the Company are free to terminate your employment relationship at any time for any reason, with or without cause.  This is the full and complete agreement between us on this term.  Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures to which you will be subject, may change from time-to-time, the “at-will” nature of your employment may only be changed in an express writing signed by you and a Senior Officer of the Company.

 

This offer is contingent upon the successful completion of your background investigation and referencing.

 

There are two copies of this letter enclosed; if all of the foregoing is satisfactory, please sign and date each copy, and return one copy to me, saving the other copy for yourself.

 

[Remainder of page intentionally left blank.]

 

2

 

We are very excited about the possibility of you joining our team and becoming a part of our company!  We look forward to determining a mutually convenient start date as soon as possible.

 

If you have any questions, please don’t hesitate to contact me at 650-808-6000.  We look forward to your favorable response.

 

Sincerely,

 

	
/s/   Rick E Winningham
    	
 
    
	
 
    	
 
    
	
Rick   E Winningham
    	
 
    
	
Chief   Executive Officer
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Foregoing   terms and conditions hereby accepted:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signed:
    	
/s/ Shehnaaz Suliman
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
May 31, 2017
    	
 
    
	
 
    	
 
    	
 
    
	
Start Date:
    	
July 31, 2017
    	
 
    

 

3

 

Exhibit A

 

Performance Milestones

 

A.            $150 million in Recurring Annual Corporate Revenue (1)

 

B.            First Successful Completion of a BD Transaction (2)

 

C.            Second Successful Completion of a BD Transaction (2)

 

***

 

(1)             “Recurring Annual Corporate Revenue” means achieving annual corporate revenue generated by the Company and its subsidiaries of $150 million or greater in each fiscal year for at least two (2) consecutive fiscal years.  Recurring Annual Corporate Revenue includes net revenue from product sales, royalty revenue, profit sharing with collaboration partners, the 85% economic interest from Theravance Respiratory Company, LLC, and R&D funding/reimbursement classified as revenue.  Recurring Annual Corporate Revenue excludes revenue from up-front payments received under licensing or collaboration agreements (including any premium on share purchases) and milestone payments.  For the avoidance of doubt, loss sharing with collaboration partners and any negative revenue are not included in the determination of Recurring Annual Corporate Revenue.  The amounts for all of the revenue components identified above to be included or excluded in the definition of Recurring Annual Corporate Revenue are the amounts determined under US GAAP that are included in the determination of the income/loss before income taxes as reported in the Company’s Form 10-K.

 

(2)             “Successful Completion of a BD Transaction” means the execution of a definitive agreement for the out-license of a Company-discovered compound which provides for total upfront and potential milestone payments and/or purchases of the Company’s equity securities at or above market prices of at least $250 million in aggregate.

 

4Exhibit 10.2

 

[Form of Notice of Option Grant and Option Agreement under the Company’s Performance Incentive Plan]

 

THERAVANCE BIOPHARMA, INC. PERFORMANCE INCENTIVE PLAN

 

NOTICE OF OPTION GRANT

 

You have been granted the following option to purchase Ordinary Shares of Theravance Biopharma, Inc. (the “Company”):

 

	
Name of Optionee:
    	
«First» «Last»
    
	
 
    	
 
    
	
ID Number:
    	
«ID»
    
	
 
    	
 
    
	
Total Number of Shares:
    	
«Shares»
    
	
 
    	
 
    
	
Type of Option:
    	
Nonstatutory Option
    
	
 
    	
 
    
	
Grant Number:
    	
«Number»
    
	
 
    	
 
    
	
Exercise Price Per   Share:
    	
«Price»
    
	
 
    	
 
    
	
Date of Grant:
    	
«GrantDate»
    
	
 
    	
 
    
	
Vesting Schedule:
    	
This option shall vest   and become exercisable with respect to the first 25% of the Ordinary Shares   subject to this option on «FirstVestDate», subject to your continuous service   as an Employee or Consultant (“Service”) through such date.  This option shall vest and become   exercisable with respect to an additional 1/48th of the Ordinary Shares subject to this   option when you complete each month of continuous Service thereafter.    The option shall be fully vested and exercisable on   «LastVestDate» provided you have remained in continuous Service through   such date.
    
	
 
    	
 
    
	
Expiration Date:
    	
«ExpirationDate».  This option expires earlier if your Service   terminates earlier, as described in the Option Agreement, and may be   terminated sooner in connection with certain corporate transactions as   provided in Article 2.11 of the Plan.
    

 

You and the Company agree that this option is granted under and governed by the terms and conditions of the Option Agreement, which is attached to and made a part of this document, and the Performance Incentive Plan (the “Plan”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in Article II of the Plan.

 

You further agree that the Company may deliver by email all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements).  You also agree that the Company may deliver these documents by posting them on a web site maintained by the Company or by a third party under contract with the Company.  If the Company posts these documents on a web site, it will notify you by email.

 

 

THERAVANCE BIOPHARMA, INC. PERFORMANCE INCENTIVE PLAN

 

OPTION AGREEMENT

 

	
Grant of Option
    	
 
    	
Subject to all of the   terms and conditions set forth in the Notice of Option Grant, this Option   Agreement (the “Agreement”)   and the Plan, the Company has granted you an option to purchase up to the   total number of shares specified in the Notice of Option Grant at the   exercise price indicated in the Notice of Option Grant.
    
	
 
    	
 
    	
 
    
	
Tax Treatment
    	
 
    	
This option is intended   to be a nonstatutory option, as provided in the Notice of Option Grant.
    
	
 
    	
 
    	
 
    
	
Vesting

 
    	
 
    	
This option   vests and becomes exercisable as shown in the Notice of Option Grant.

 

This option   shall vest and become exercisable in full if the Company is subject to a “Change in Control” (as defined in the Plan) before your   Service terminates and this option is not assumed or replaced with a new   award as set forth in Article 2.10(a) of the Plan.  In addition, this option shall vest and   become exercisable in full if the Company is subject to a Change in Control   before your Service terminates, and you are subject to an Involuntary   Termination (as defined below) within 24 months after the Change in Control.

 

For purposes of   this Agreement, “Cause” shall   mean (i) the unauthorized use or disclosure of the confidential   information or trade secrets of the Company, a Parent, a Subsidiary or an   Affiliate, which use causes material harm to the Company, a Parent, a   Subsidiary or an Affiliate, (ii) conviction of a felony under the laws   of the United States or any state thereof, (iii) gross negligence or   (iv) repeated failure to perform lawful assigned duties for thirty days   after receiving written notification from the Board of Directors.

 

For purposes of   this Agreement, “Involuntary Termination”   means the termination of your Service by reason of:

 

(a)          an involuntary   dismissal or discharge by the Company (or Parent, Subsidiary or Affiliate   employing you) for reasons other than for Cause; or

 

(b)          your voluntary   resignation following one of the following that is effected by the Company   (or the Parent, Subsidiary or Affiliate employing you) without your consent   (i) a change in your position with the Company (or Parent, Subsidiary or   Affiliate employing you) which materially reduces your level of   responsibility, (ii) a material reduction in your base
    

 

 

	
 
    	
 
    	
compensation  or (iii) a relocation of your   workplace by more than fifty miles from your workplace immediately prior to   the Change in Control that also materially increases your one-way commute. In order for your resignation under clause   (b) to constitute an “Involuntary Termination,” all of the following   requirements must be satisfied: (1) you must provide notice to the   Company of your intent to resign and assert an Involuntary Termination   pursuant to clause (b) within 90 days of the initial existence of one or   more of the conditions set forth in subclauses (i) through (iii),   (2) the Company (or the Parent, Subsidiary or Affiliate employing   you) will have 30 days from the date   of such notice to remedy the condition and, if it does so, you may withdraw   your resignation or resign without any vesting acceleration, and (3) any   termination of Service under clause (b) must occur within two years of   the initial existence of one or more of the conditions set forth in   subclauses (i) through (iii).    Should the Company (or the Parent, Subsidiary or Affiliate   employing you) remedy the condition   as set forth above and then one or more of the conditions arises again within   two years following the occurrence of a Change in Control, you may assert   clause (b) again subject to all of the conditions set forth herein.

 

For purposes of this   Agreement, “Service” means your service as   an Employee or Consultant.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding   the foregoing, if you   are or become eligible to participate in the Company’s Change in Control   Severance Plan (the “Severance Plan”),   the vesting acceleration provisions in the Severance Plan shall apply instead   of those contained herein.

 

No additional shares will vest or become exercisable after your   Service has terminated for any reason, except as set forth in the   Severance Plan to the extent you are eligible for benefits thereunder.
    
	
 
    	
 
    	
 
    
	
Term
    	
 
    	
This option expires in   any event at the close of business at Company headquarters on the day before   the 10th anniversary of the Date of Grant, as shown   in the Notice of Option Grant.  (This   option will expire earlier if your Service terminates, as described below,   and this option may be terminated sooner as provided in Article 2.11 of   the Plan.)

 

You may exercise this   option, to the extent vested and exercisable, at any time before its   expiration or termination pursuant to this Agreement or the Plan.
    
	
 
    	
 
    	
 
    
	
Termination of Service
    	
 
    	
If your Service   terminates for any reason, this option will expire to the extent it is   unvested as of your termination date and does not vest as a result of your   termination of Service.  The Company   determines when your Service terminates for all purposes of this option.
    

 

3

 

	
Regular Termination
    	
 
    	
If your Service   terminates for any reason except death or total and permanent disability,   then this option, to the extent vested as of your termination date, will   expire at the close of business at Company headquarters on the date three   months after your termination date. 
    
	
 
    	
 
    	
 
    
	
Death/Disability
    	
 
    	
If your Service   terminates because of your death or due to your total and permanent   disability, then this option, to the extent vested as of your termination   date, will expire at the close of business at Company headquarters on the   date 12 months after your termination date.

 

For all purposes   under this Agreement, “total and permanent disability” means that you are   unable to engage in any substantial gainful activity by reason of any   medically determinable physical or mental impairment which can be expected to   result in death or which has lasted, or can be expected to last, for a   continuous period of not less than one year.
    
	
 
    	
 
    	
 
    
	
Leaves of Absence and Part-Time   Work

 

 
    	
 
    	
For purposes of   this option, your Service does not terminate when you go on a military leave,   a sick leave or another bona fide   leave of absence, if the leave was approved by the Company (or Parent,   Subsidiary or Affiliate employing you) in writing.  But your Service terminates when the   approved leave ends, unless you immediately return to active work.

 

If you go on a   leave of absence, then the vesting schedule specified in the Notice of Option   Grant may be adjusted in accordance with the Company’s leave of absence   policy or the terms of your leave.  If   you and the Company (or Parent, Subsidiary or Affiliate employing you) agree   to a reduction in your scheduled work hours, then the Company reserves the   right to modify the rate at which this option vests, so that the rate of   vesting is commensurate with your reduced work schedule.

 

The Company   shall not be required to adjust any vesting schedule pursuant to this   subsection.
    
	
 
    	
 
    	
 
    
	
Restrictions on Exercise
    	
 
    	
The Company will   not permit you to exercise this option if the issuance of shares at that time   would violate any law or regulation.
    
	
 
    	
 
    	
 
    
	
Notice of Exercise
    	
 
    	
When you wish to   exercise this option, you must notify the Company by filing the proper   “Notice of Exercise” form at the address given on the form.  Your notice must specify how many shares   you wish to purchase.  Your notice must   also specify how your shares should be registered.  The notice will be effective when the   Company receives it.

 

However, if you   wish to exercise this option by executing a same-day sale (as described   below), you must follow the instructions of the Company and the broker who   will execute the sale.

 

If someone else   wants to exercise this option after your death, that person must prove to the   Company’s satisfaction that he or she is entitled to do so.
    

 

4

 

	
 
    	
 
    	
In no event may   this option be exercised for any fractional shares.
    
	
 
    	
 
    	
 
    
	
Form of Payment
    	
 
    	
When you submit   your notice of exercise, you must include payment of the option exercise   price for the shares that you are purchasing.    To the extent permitted by applicable law, payment may be made in one   (or a combination of two or more) of the following forms:

 

·                  Your personal check, a cashier’s   check, a money order or by wire transfer.

 

·                  Irrevocable directions to a   securities broker approved by the Company to sell all or part of your option   shares and to deliver to the Company from the sale proceeds an amount   sufficient to pay the option exercise price and any withholding taxes.  (The balance of the sale proceeds, if any,   will be delivered to you.)  The   directions must be given in accordance with the instructions of the Company   and the broker.  This exercise method   is sometimes called a “same-day sale.”

 

·                  With the Company’s consent (which   may be granted by the Compensation Committee of the Board of Directors or, if   applicable, by the Equity Award Committee of the Board of Directors),   irrevocable directions to a securities broker or lender approved by the   Company to pledge option shares as security for a loan and to deliver to the   Company from the loan proceeds an amount sufficient to pay the option   exercise price and any withholding taxes.    The directions must be given in accordance with the instructions of   the Company and the broker or lender.

 

·                  With the Company’s consent (which   may be granted by the Compensation Committee of the Board of Directors or, if   applicable, by the Equity Award Committee of the Board of Directors),   Ordinary Shares that you own, along with any forms needed to effect a   transfer of those shares to the Company.    The value of the shares, determined as of the effective date of the   option exercise, will be applied to the option exercise price.  Instead of surrendering Ordinary Shares,   you may attest to the ownership of those shares on a form provided by the   Company and have the same number of shares subtracted from the option shares   issued to you.

 

·                  With the Company’s consent (which   may be granted by the Compensation Committee of the Board of Directors or, if   applicable, by the Equity Award Committee of the Board of Directors), by   having the Company withhold Ordinary Shares that would otherwise be issued on   exercise of the option.  The value of   the withheld shares, determined as of the effective date of the option   exercise, will be applied to the option exercise price. This exercise method   is sometimes referred to as a “net exercise.”    
    
	
 
    	
 
    	
 
    
	
Withholding
    	
 
    	
You will not be   allowed to exercise this option unless you make
    

 

5

 

	
Taxes and Share Withholding
    	
 
    	
arrangements   acceptable to the Company (and/or the Parent, Subsidiary or Affiliate   employing you) to pay any withholding taxes that may be due as a result of   the option exercise (“Tax Withholding Obligations”).  These arrangements include payment in cash   or via the same-day sale method described above.  With the Company’s consent (which may be   granted by the Compensation Committee of the Board of Directors or, if   applicable, by the Equity Award Committee of the Board of Directors), these   arrangements may also include withholding shares that otherwise would be issued   to you when you exercise this option.    The value of these shares, determined as of the effective date of the   option exercise, will be applied to the Tax Withholding Obligations.
    
	
 
    	
 
    	
 
    
	
Automatic Exercise at End of   Option Term
    	
 
    	
This option, to   the extent then outstanding, will be automatically exercised as to all   then-vested Shares at 9:00 am San Francisco, CA Time on the fourth trading   day preceding the expiration date set forth in the Notice of Option Grant if   the per share exercise price of the option is at least 1% below the Fair   Market Value of an Ordinary Share at such time.

 

In the event of   an automatic exercise, you authorize the Company to instruct the broker whom   it has selected for this purpose to sell a number of Ordinary Shares to be   issued upon exercise of the option necessary to generate cash proceeds to   cover the exercise price for the exercised shares and the Tax Withholding   Obligations in connection with such exercise (the “Exercise Costs”).  Such sales shall be effected at a market   price following the date that the option is exercised.

 

You acknowledge   that the proceeds of any such sale may not be sufficient to satisfy the   Exercise Costs.  To the extent the   proceeds from such sale are insufficient to cover the Exercise Costs, the   Company (or Parent, Subsidiary or Affiliate employing you) may in its   discretion (a) withhold the balance of the Exercise Costs from your   wages or other cash compensation paid to you by the Company (or Parent,   Subsidiary or Affiliate employing you) and/or (b) satisfy the Exercise   Costs by means of a net-exercise arrangement, provided that in the case of   the Tax Withholding Obligations the Company only withholds an amount of   shares not in excess of the amount necessary to satisfy the minimum   withholding amount.  The fair market   value of the withheld shares, determined as of the date of exercise, will be   applied against the Exercise Costs.  If   the Company satisfies the Exercise Costs by means of a net-exercise   arrangement as described above, you are deemed to have been issued the full   number of shares subject to the option so exercised.

 

You acknowledge   that the instruction to the broker to sell in the foregoing section is   intended to comply with the requirements of   Rule 10b5-1(c)(1)(i)(B) under the Securities Exchange Act of 1934   (the “Exchange Act”), and to be interpreted to comply with the requirements   of Rule 10b5-1(c)(1) under the Exchange Act (a “10b5-1 Plan”).  This 10b5-1 Plan is adopted to be effective   as of the first day of the Company’s first open
    

 

6

 

	
 
    	
 
    	
trading window   following the date on which shares subject to this option first become   vested.  This 10b5-1 Plan is being   adopted to permit you to sell a number of shares issued upon exercise of the   option sufficient to pay the Exercise Costs.    You hereby appoint the Company as your agent and attorney-in-fact to   instruct the broker with respect to the number of shares to be sold under   this 10b5-1 Plan.

 

You hereby   authorize the broker to sell the number of Ordinary Shares determined as set   forth above and acknowledge that the broker is under no obligation to arrange   for such sale at any particular price.    You acknowledge that the broker may aggregate your sales with sales   occurring on the same day that are effected on behalf of other Company   employees pursuant to sales of shares vesting under Company options or   restricted share unit awards and your proceeds will be based on a blended   price for all such sales.  You   acknowledge that you will be responsible for all brokerage fees and other   costs of sale, and you agree to indemnify and hold the Company harmless from   any losses, costs, damages or expenses relating to any such sale.  You acknowledge that it may not be possible   to sell Ordinary Shares during the term of this 10b5-1 Plan due to (a) a   legal or contractual restriction applicable to you or to the broker,   (b) a market disruption, (c) rules governing order execution   priority on the Nasdaq Global Market, (d) a sale effected pursuant to   this 10b5-1 Plan that fails to comply (or in the reasonable opinion of the   broker’s counsel is likely not to comply) with Rule 144 under the   Securities Act of 1933, if applicable, or (e) if the Company determines   that sales may not be effected under this 10b5-1 Plan.  You acknowledge that this 10b5-1 Plan is   subject to the terms of any policy adopted now or hereafter by the Company   governing the adoption of 10b5-1 plans.    
    
	
 
    	
 
    	
 
    
	
Restrictions on Resale
    	
 
    	
You agree not to   sell any option shares at a time when applicable laws, Company policies   (including the Company’s Insider Trading Policy, a copy of which can be found   on the Company’s intranet) or an agreement between the Company and its   underwriters prohibit a sale.  This   restriction will apply as long as your Service continues and for such period   of time after the termination of your Service as the Company may specify.
    
	
 
    	
 
    	
 
    
	
Transfer of Option
    	
 
    	
Prior to your   death, only you may exercise this option.    You cannot transfer or assign this option.  For instance, you may not sell this option   or use it as security for a loan.  If   you attempt to do any of these things, this option will immediately become   invalid.  You may, however, dispose of   this option in your will or a beneficiary designation.  A beneficiary designation must be filed   with the Company on the proper form.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Regardless of   any marital property settlement agreement, the Company is not obligated to   honor a notice of exercise from your former spouse, nor is the Company   obligated to recognize your former spouse’s interest in your option in any   other way.
    

 

7

 

	
No Retention Rights
    	
 
    	
Your option or   this Agreement does not give you the right to be retained by the Company, a   Parent, Subsidiary or Affiliate in any capacity.  The Company and its Parents, Subsidiaries   and Affiliates reserve the right to terminate your Service at any time, with   or without cause. 
    
	
 
    	
 
    	
 
    
	
Shareholder Rights
    	
 
    	
You, or your   estate or heirs, have no rights as a shareholder of the Company until this   option has been exercised by giving the required notice to the Company,   paying the exercise price, satisfying any Tax Withholding Obligations and   being registered on the register of members of the Company.  No adjustments are made for dividends or   other rights if the applicable record date occurs before exercise of this   option, except as described in the Plan. 
    
	
 
    	
 
    	
 
    
	
Recoupment Policy
    	
 
    	
This option, and   the shares acquired upon exercise of this option, shall be subject to any   Company recoupment policy in effect from time to time.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
In the event of   a share split, a share dividend or a similar change in the Ordinary Shares,   the number of shares covered by this option and the exercise price per share   may be adjusted pursuant to the Plan.
    
	
 
    	
 
    	
 
    
	
Effect of Significant Corporate   Transactions
    	
 
    	
If the Company   is a party to a merger, consolidation or certain change in control   transactions, then this option will be subject to the applicable provisions   of Article 2.11 of the Plan.
    
	
 
    	
 
    	
 
    
	
Applicable Law
    	
 
    	
This Agreement   will be interpreted and enforced under the laws of the Cayman Islands   (without regard to its choice-of-law provisions).
    
	
 
    	
 
    	
 
    
	
The Plan and Other Agreements
    	
 
    	
The text of the   Plan is incorporated in this Agreement by reference.  A copy of the Plan is available on the Company’s intranet or by   request to the Finance Department.    Capitalized terms not otherwise defined herein shall have the meanings   ascribed to such terms in Article II of the Plan.

 

This Agreement,   the Notice of Option Grant, and the Plan constitute the entire understanding   between you and the Company regarding this option.  Any prior agreements, commitments or   negotiations concerning this option are superseded.  This Agreement may be amended only by   another written agreement between the parties.
    

 

BY ACCEPTING THIS OPTION GRANT, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

 

8

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