Document:

EXHIBIT
10.21

 

 

 

 

 

 

WJ COMMUNICATIONS,
INC.

401 RIVER OAKS
PARKWAY

SAN JOSE,
CALIFORNIA  95134

 

 

 

Dec.
5, 2002

 

 

Mr. Fred Krupica

121 Calle Palo Colorado

Santa
Barbara, CA 93105

 

Re: Employment Agreement

 

Dear
Mr. Krupica:

 

This letter
agreement (this “Agreement”) sets
forth the terms and conditions of your employment with WJ Communications, Inc.
(the “Company”), effective as of
December 9, 2002  (the “Effective
Date”). You acknowledge that if the Effective Date does not occur on or before
December 11, 2002, the Company shall have no obligation to employ you and this
Agreement shall terminate.

1.                                       Employment and Services. 
The Company shall employ you as Senior Vice President and Chief
Financial Officer of the Company, for the period beginning on the Effective
Date and ending upon termination pursuant to Section 4 below (the “Employment Period”).  During the Employment Period, you shall
render such services to the Company and its affiliates and subsidiaries as the
Chief Executive Officer and the Board of Directors of the Company shall
reasonably designate from time to time, and you shall devote your best efforts
and full time and attention to the business of the Company.

2.                                       Compensation.

a.                                       Annual Base Salary. 
The Company shall pay you an annual base salary (“Annual Base Salary”) of Two Hundred
Thousand Dollars ($200,000) during the Employment Period, subject to annual
review in each year of the Employment Period thereafter (for any partial year
during the Employment Period, the Annual Base Salary shall be prorated based on
the number of days during such year on which you are employed by the
Company).  The first such annual review
will occur during or about December 9, 2003. 
Your Annual Base Salary may be increased in years following the first
year of employment but may not be decreased. 
As used herein, the term “Annual Base Salary” refers to the Annual
Base Salary as so increased.  Such
Annual Base Salary shall be payable in installments in accordance with the
Company’s regular payroll practices.

 

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b.                                      Bonus.  In addition, subject to the
immediately subsequent Section, you will be eligible to receive a bonus,
calculated and paid quarterly, to be paid as soon as practicable after each
fiscal quarter, but not later than one hundred twenty (120) days after the end
of each such fiscal quarter.  In order
to determine the amount of such bonus, the Company shall determine appropriate
business targets and certain individual objectives for you for each fiscal
quarter, and your bonus for each such fiscal quarter shall be based upon the
extent to which the Company and you attain such targets and objectives. Your
maximum quarterly bonus shall be 60% of your Quarterly Base Salary. The
determination of appropriate business targets with respect to each fiscal
quarter shall take place not later than thirty (30) days following the receipt
by the Board of Directors of the Company from the Company’s senior management
of the Company’s operating budget with respect to such fiscal period.

c.                                       Notwithstanding anything herein to the
contrary, there shall be deducted or withheld from all amounts payable to you
under this Agreement amounts for all federal, state, city or other taxes
required by applicable law to be so withheld or deducted and any other amounts
authorized for deduction by or required by law.

3.                                       Options.

 As part of this offer, you will be granted a non-qualified stock
option to purchase 600,000 shares of the new company stock pending completion
of the ongoing transaction proposed by Fox Paine. In this case, the option
grant price will be the final transaction price per share. If the transaction
does not complete, then the option grant will be for WJ Communications Inc.
stock and the grant price will be the price of WJ Communications Inc. common
stock on the day the grant is made in accordance with the 2000 Employee Stock
Incentive Plan. This option to purchase common stock will vest over a four-year
period with 25% vesting on each anniversary of your employment commencement
date which is expected to be December 9, 2002. 
The Option Grant will be in accordance with WJ Communications, Inc. 2000
Employee Stock Incentive Plan and shall be subject to the terms and conditions
set forth in the attached Executive Time Vesting Stock Option Agreement (the “Option Agreement”) to be entered into
between the Company and you simultaneously with entering into this Agreement.
Any of the foregoing and the terms and conditions of the Option Agreement to
the contrary notwithstanding, upon the earlier to occur of (A) the termination
of your employment within six (6) months of the occurrence of a Change in
Control (as defined in the Executive Time Vesting Stock Option Agreement),
which termination is (i) by the Company other than for Cause (as defined
below), or (ii) by you with Good Reason (as defined below), you shall be fully
vested in any then unvested shares under the Option Grant (it being understood
that there shall not be accelerated vesting of the shares under the Option
Grant upon any other termination of your employment).

4.                                       Benefits.

a.                                       On-Going Benefits. During the Employment Period, you shall be
entitled to participate in the Company’s fringe benefit plans for its
executives, subject to and in accordance with applicable eligibility requirements,
such as group medical, dental and vision care insurance, executive medical
reimbursement, tax preparation, 401(k), employee stock purchase program, life
and disability insurance plans and all other benefit plans (other than
severance and equity-based plans or arrangements) generally available to the
Company’s executive officers.  In
addition, the Company will reimburse your reasonable out-of-pocket expenses
incurred in connection with the performance of your duties hereunder,
consistent with Company policy.  You
shall be entitled to take time off in accordance with the Company’s top
management vacation policy.

 

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b.                                      Temporary Living Benefits.

You
will receive a temporary living benefit for up to 30 days temporary living
expenses, the total sum of which shall not exceed $7500. The temporary living
benefit is to assist you finding of suitable housing in the San Jose area and
it is understood that you will maintain a residence in the bay area as a condition
of your employment.

5.                                       Termination and Severance. 
The Employment Period shall terminate on the first to occur of (i)
ninety (90) days following written notice by you to the Company of your
resignation without Good Reason (it being understood that you will continue to
perform your services hereunder during such ninety (90) day period if
requested, but the Company may terminate your services sooner if it so elects),
(ii) thirty (30) days following written notice by you to the Company of your
resignation with Good Reason (it being understood that you will continue to
perform your services hereunder during such thirty (30) day period provided
that the Company does not elect to terminate your employment sooner if it so
elects), (iii) your death or Disability, (iv) a vote of the Board of the
Company directing such termination for Cause, (v) a vote of the Board of the
Company directing such termination without Cause, or (vi) the third (3rd)
anniversary of the Effective Date (the “Scheduled
Expiration Date”); provided, however, that the Scheduled Expiration
Date shall be automatically extended for successive one-year periods unless, at
least ninety (90) days prior to the then-current Scheduled Expiration Date,
either the Company or you shall give written notice to the other of an
intention not to extend the Employment Period. 
In the event of termination of the Employment Period pursuant to clause
(ii) or (v) above, the Company shall pay to you an amount equal to your Annual
Base Salary as in effect immediately prior to the termination of the Employment
Period, such amount to be paid periodically in accordance with the Company’s
regular payroll practices over the twelve (12) month period immediately
following such termination (the “Severance
Benefit”).

Not withstanding the preceding sentence, the Severance Benefit shall be
computed as an amount equal to one hundred fifty percent (150%) of your Annual
Base Salary as in effect immediately prior to the termination of the Employment
Period and shall be paid periodically in accordance with the Company’s regular
payroll practices over the twelve (12) month period immediately following such
termination solely in a circumstance in which there has occurred a Change in
Control (as defined in the Option Agreement) within three (3) months prior to
any termination by you for Good Reason or by the Company without Cause.
Notwithstanding anything in this Agreement to the contrary, in the event that
payment of the Severance Benefit, either alone or together with other payments
(or the value of other benefits) which you have the right to receive from the
Company in connection with a Change in Control, would not be deductible (in
whole or in part) by the Company as a result of the Severance Benefit or other
payments or benefits constituting a “parachute payment” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), the Severance Benefit (or, at your
election, such other payments and/or benefits, or a combination of such other
payments and/or benefit and/or the Severance Benefit) shall be reduced to the
largest amount as will result in no portion of the Severance Benefit (or such
other payments and/or benefits) not being fully deductible by the Company as a
result of Section 280G of the Code.  The
determination of the amount of any such required reduction pursuant to the
foregoing provision, and the valuation of any non-cash benefits for purposes of
such determination, shall be made exclusively by the firm that was acting as
the Company’s auditors prior to the Change in Control (whose fees and expenses
shall be borne by the Company, and such determination shall be conclusive and
binding).

 

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Except as
otherwise set forth in this Section 5 or pursuant to the terms of employee
benefit plans in which you participate pursuant to Section 4, you shall not be
entitled to any compensation or other payment from the Company in connection
with the termination of your employment hereunder.  In addition to the Severance Benefit, under circumstances in
which the Severance Benefit is payable, you shall also remain eligible to
receive group health insurance benefits under the Company’s benefit plans for
one year following the termination of your employment with the Company so long
as such benefit plans permit such continued participation (or for three years
following the termination of your employment with the Company in the event that
the enhanced Severance Benefits are payable in connection with a Change in Control
pursuant to the third sentence of the first paragraph of this Section 5).

For purposes of
this Agreement, the following definitions will apply:  (a) “Good Reason” shall mean the occurrence of
any of the following without your consent which shall remain uncured for a
period of not less than thirty (30) days following your delivery of notice of
such occurrence to the Company (it being understood that your failure to
deliver such notice in a timely manner shall waive your rights to allege Good
Reason):  (i) the transfer of your
principal place of employment to a geographic location more than 50 miles from
the current location of the Company’s principal headquarters, or (ii) any
material breach of this Agreement by the Company which is not cured or which
the Company is not undertaking to cure within thirty (30) days after the
Company has received written notice from you identifying the breach in
reasonable detail; (b) “Cause” shall mean any of the following acts
or circumstances:  (i) willful
destruction by you of Company property having a material value to the Company,
(ii) fraud, embezzlement, theft, or comparable dishonest activity committed by
you against the Company, (iii) your conviction of or entering a plea of guilty
or nolo contendere to any crime constituting a felony or any misdemeanor
involving fraud, dishonesty or moral turpitude, (iv) your breach, neglect,
refusal, or failure to discharge your duties under this Agreement (other than
due to Disability) or any Company policy or your failure to comply with the
lawful directions of the President, CEO or the Board of the Company, in any
such case that is not cured within fifteen (15) days after you have received
written notice thereof from the President, CEO or the Board of the Company, or
(v) a willful and knowing misrepresentation to the President, CEO or the Board
of the Company; and (c) “Disability” shall mean that for a period of
three (3) consecutive months or an aggregate of four (4) months in any twelve
(12) month period you are incapable of substantially fulfilling the duties of
your positions as set forth in Section 1 because of physical, mental or
emotional incapacity, injury, sickness or disease.  With regard to the definition of “Disability” in clause (c)
above, any question as to the existence or extent of the Disability upon which
you and the Company cannot agree shall be determined by a qualified,
independent physician selected by the Company. 
The determination of any such physician shall be final and conclusive
for all purposes; provided, however, that you or your legal representatives
shall have the right to present to such physician such information as to such
Disability as you or they may deem appropriate, including the opinion of your
personal physician.

6.                                       Confidential Information. 
You acknowledge that information obtained by you while employed by the
Company or any affiliate thereof concerning the business or affairs of (i) the
Company, its affiliates and subsidiaries or (ii) any enterprise which is the
subject of an actual or potential transaction (“Potential
Transaction”),considered, evaluated, reviewed or otherwise, made known to Fox
Paine & Company, LLC, the Company, its affiliates or subsidiaries, or you
(“Confidential Information”) is
the property of the Company. You shall not, without the prior written consent
of the Board of the Company, disclose to any person or use for your own account
any Confidential Information except (i) in the normal course of performance of
your duties hereunder, (ii) to the extent necessary to comply with applicable
laws (provided that you shall give the Company prompt notice [providing a
reasonable time for the Company to seek a protective order] prior to any such
disclosure), or (iii) to the extent that such information becomes generally
known to and available for use by the public other than as a result of your
acts or omissions to act.  Upon
termination of your employment or at the request of the 

 

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President, CEO or the Board of
the Company at any time, you shall deliver to the President, CEO or the Board
all documents containing Confidential Information or relating to the business
or affairs of the Company, its affiliates and subsidiaries that you may then
possess or have under your control.

7.                                       Non-Solicitation.

a.                                       Non-Solicitation.  As
a means reasonably designed to protect the Company’s Confidential Information,
you agree that, for a period of twelve (12) months from the conclusion of the
Employment Period, you will not directly, indirectly or as an agent on behalf
of or in conjunction with any person, firm, partnership, corporation or other
entity, (i) hire, solicit, or encourage the resignation of or in any other
manner seek to engage or employ any person who is then, or during the
Employment Period had been, an employee of the Company, whether or not for
compensation and whether or not as an officer, consultant, adviser, independent
sales representative, independent contractor or participant, or (ii) contact,
solicit, service or otherwise have any dealings with a direct competitor of the
Company related to the sale, manufacture, distribution, marketing or provision
of products, components, equipment, hardware, other technology or services (of
any sort) in the wireless communications industry or any other industry or
business or prospective industry or business in which the Company participates
or contemplates participating in as of such conclusion, with any person or
entity with whom the Company has a current or known prospective business
relationship or who is or was at any time during his employment with the
Company (including any predecessor or successor entity) a customer, vendor or
client or strategic alliance partner of the Company, provided in each case
described in clause (ii) that such activity by you does or could reasonable be
expected to have material adverse effect on the relationship between the
Company and any such third party.

b.                                      Scope of Restriction. 
If, at the time of enforcement of this Section 7, a court shall hold
that the duration, scope or area restrictions stated herein are unreasonable
under circumstances then existing, the parties hereto agree that the maximum
duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area.

c.                                       Works Made For Hire. 
You agree that all intellectual property rights, developments, designs,
computer software, inventions, applications and improvements, including but not
limited to trade names, assumed names, service names, service marks, trademarks,
logos, patents, copyrights, licenses, formulas, trade secrets and technology,
whether in design, methods, processes, formulae, machines or devices and all
other applications (collectively, “Inventions”),
whether made, created, invented, devised, acquired, succeeded to (whether by
devise, estate, testamentary disposition or otherwise), or developed for the
Company by you during the Employment Period or prior to the date of this
Agreement, other than Inventions made, created, invented, devised or developed
by you (i) on your own personal time, (ii) without the use of the Company’s
equipment, supplies, facilities and resources and (iii) which are not related
to the sale, manufacture, distribution, marketing development or provision of
products, components, equipment, hardware, other technology or services (of any
sort) in the wireless communications industry (collectively, “Unrelated Inventions”), are works made for
hire and shall be the exclusive property of the Company without separate
compensation to you.  You will, at the
request and expense of the Company made at any time, execute and deliver to the
Company or its nominee such applications and instruments as may be desirable
and appropriate for obtaining for the Company or its nominee, patents,
copyrights, trademarks, know-how and other intellectual property protection of
the United States and all other countries for vesting in the Company or its
nominee, all of your claim, right, title and interest in said Inventions and
for maintaining, enforcing and funding the same, and to otherwise vest in or
evidence the Company’s or its nominee’s exclusive ownership of all of the
rights referred to herein. In the event that, for whatever reason, the results
of your

 

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past or future work for the Company should
not be deemed to be works made for hire, you agree to assign, and you hereby do
assign, to the Company or its nominee all claim, right, title and interest, in
any country, to each and every of the inventions that is the result of work
done in the course of your past or future employment by the Company, or that
you create or develop, or that you acquire by whatever means that was created
or developed, in whole or in part by using the Company’s equipment, supplies,
resources or facilities.  Each and every
such assignment is and shall be in consideration of this Agreement with the
Company, and no further consideration therefore is or shall be provided to you
by the Company.  You hereby waive
enforcement of any moral or legal rights which might limit the Company’s rights
to exploit any of the foregoing materials in any manner.

d.                                      Equitable Relief. 
You acknowledge that the provisions contained in Sections 6 and 7 of
this Agreement are reasonable and necessary to protect the legitimate interests
of the Company, that any breach or threatened breach of such provisions will
result in irreparable injury to the Company and that the remedy at law for such
breach or threatened breach would be inadequate.  Accordingly, in the event of the breach by you of any of the
provisions of Sections 6 and 7 of this Agreement, the Company, in addition and
as a supplement to such other rights and remedies as may exist in its favor,
may apply to any court of law or equity having jurisdiction to enforce this
Agreement, and/or may apply for and have the right to injunctive relief against
any act that would violate any of the provisions of this Agreement (without
being required to post a bond).  You
further agree that injunctive relief may be sought and obtained for any breach
or threatened breach of Section 6 or Section 7 without a showing of irreparable
injury, in order to prevent any such breach or threatened breach.  Such right to obtain injunctive relief may
be exercised, at the option of the Company, concurrently with, prior to, after,
or in lieu of, the exercise of any other rights or remedies that the Company
may have as a result of any such breach or threatened breach.

8.                                       Survival.  Any termination of your
employment or of this Agreement shall have no effect on the continuing
operation of Sections 5, 6, or 7 for the periods specified therein.

9.                                       Waiver of Claims.  As
a condition to your receipt of any termination or severance benefits pursuant
to Section 5 hereof, you will agree, as of the date of such termination, to
waive, discharge and release any and all claims, demands and causes of action,
whether known or unknown, against the Company, its affiliates and subsidiaries,
and their respective current and former directors, officers, employers,
attorneys and agents arising out of, connected with or incidental to your
employment or other dealings with the Company, its affiliates or subsidiaries,
which you or anyone acting on your behalf might otherwise have had or asserted
and any claim to any compensation or benefits from your employment with the
Company or its affiliates (other than employee benefits to be provided pursuant
to the terms of Section 5 hereof or of any employee benefit plans as set forth
in Section 4 hereof). Notwithstanding anything contained herein to the
contrary, no termination or severance payments shall be made under this
Agreement or otherwise until such time as you have delivered an executed
release of claims and any applicable revocation periods under state or federal
law have expired.  The Company agrees,
as further consideration for your waiver, to concurrently execute a waiver of
unknown claims against you on terms and conditions substantially identical to
the waiver provided by you (it being understood that the Company may
specifically reserve claims identified in writing by the Company at the time
that such waiver is provided).

10.                                 Governing Law. 
This Agreement and all questions concerning the construction, validity
and interpretation of this Agreement shall be governed by and determined in
accordance with the internal law, and not the law of conflicts, of the State of
California.

 

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11.                                 Notices.  All demands, notices and
communications hereunder shall be in writing and shall be deemed to have been
duly given, if mailed, by registered or certified mail, return receipt
requested, or, if by other means, when received by the other party at the
address set forth herein, or such other address as may hereafter be furnished to
the other party by like notice. Notice or communication hereunder shall be
deemed to have been received on the date delivered to or received at the
premises of the addressee if delivered other than by mail, and in the case of
mail, three days after the depositing of the same in the United States mail as
above stated (or, in the case of registered or certified mail, by the date
noted on the return receipt).  Notices
shall be addressed as follows:

 

	
   

  	
  If to the Executive:

  	
   

  
	
   

  	
   

  	
  Mr. Fred Krupica

  
	
   

  	
   

  	
  121 Calle Palo Colorado

  
	
   

  	
   

  	
  Santa Barbara, CA 93105

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the Company:

  	
  WJ Communications, Inc.

  
	
   

  	
   

  	
  401 River Oaks Parkway

  
	
   

  	
   

  	
  San Jose, CA  95134

  
	
   

  	
   

  	
  Attention:  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  Shumaker, Loop & Kendrick, LLP

  
	
   

  	
   

  	
  101 E. Kennedy Boulevard, Suite 2800

  
	
   

  	
   

  	
  Tampa, Florida 33602

  
	
   

  	
   

  	
  Attention:  Darrell C. Smith,
  Esq.

  

 

Either party may change the address to which said
notices are to be sent or given by written notice of such change to the other
parties in the manner set forth above.

 

12.                                 Separability Clause. 
Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.

13.                                 Successors and Assigns; Assignment of
Agreement.  This Agreement shall bind and inure to the
benefit of and be enforceable by the parties hereto and the respective
successors and assigns of the parties hereto. 
As used in this Agreement, “Company” shall

 

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mean the Company as hereinbefore
defined and any successors to its businesses and/or assets as aforesaid which
assume and agree to perform this Agreement by operation of law, or otherwise.  This Agreement is personal to you and
without the prior written consent of the Company shall not be assignable by you
otherwise than by will or the laws of descent and distribution

14.                                 Waiver.  The failure of any party to
insist upon strict performance of a covenant hereunder or of any obligation
hereunder, irrespective of the length of time for which such failure continues,
shall not be a waiver of such party’s right to demand strict compliance in the
future. No consent or waiver, express or implied, to or of any breach or
default in the performance of any obligation hereunder, shall constitute a
consent or waiver to or of any other breach or default in the performance of
the same or any other obligation hereunder. 
No term or provision of this Agreement may be waived unless such waiver
is in writing and signed by the party against whom such waiver is sought to be
enforced.

15.                                 Entire Agreement. 
This Agreement constitutes the entire Agreement between the parties
hereto with respect to the subject matter contemplated herein and supersedes
all prior agreements, whether written or oral, between the parties, relating to
the subject matter hereof.  This
Agreement shall not be modified except in writing executed by all parties
hereto.

16.                                 Captions.  Titles or captions of Sections
and paragraphs contained in this Agreement are inserted only as a matter of
convenience and for reference, and in no way define, limit, extend or describe
the scope of this Agreement or the intent of any provision hereof.

17.                                 Counterparts. 
For the purpose of facilitating proving this Agreement, and for other
purposes, this Agreement may be executed simultaneously in any number of
counterparts.  Each counterpart shall be
deemed to be an original, and all such counterparts shall constitute one and
the same instrument.

18.                                 Arbitration. 
Any dispute, controversy or claim arising under or in connection with
this Agreement, or the alleged breach hereof, shall be settled exclusively by
private and confidential arbitration conducted by the American Arbitration
Association in accordance with the Rules of the Commercial Panel of the
American Arbitration Association then in effect (and not the Employment Dispute
Resolution Rules).  Judgment upon the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof.  Any arbitration
held hereunder shall take place in Palo Alto, California.  In addition, any dispute, controversy or
claim arising under or in connection with your rights or obligations pursuant
to any stock option or other equity arrangements between you and the Company,
shall be settled exclusively as provided for by the terms of the applicable
Company plans.

19.                                 Legal Fees.  In the event of any dispute
hereunder or the enforcement of any right hereunder that requires recourse to
arbitration or litigation, the prevailing party therein shall be entitled, in
addition to other remedies, to recover legal fees and costs from the
non-prevailing party, as determined by the arbitrator(s) or the court.

20.                                 Certain Conditions to Employment. 
Notwithstanding anything herein to the contrary, your employment and the
Company’s obligations hereunder are conditioned upon your successful passage of
a drug and alcohol screening test, the Company’s verification of your past
employment and educational experience and the Company’s satisfaction in its
sole discretion as to the results of any criminal background investigation or
reference inquiry performed by it.

 

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Please execute a
copy of this letter Agreement in the space below and return it to the
undersigned at the address set forth above to confirm your understanding and
acceptance of the agreements contained herein.

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WJ COMMUNICATIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By :

  	
  /s/ MICHAEL R. FARESE, Ph.D

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:               Michael R. Farese, Ph.D

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:                     President and CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted and agreed to:

  	
   

  	
  By: 

  	
  /s/ FRED J. KRUPICA

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:               Mr. Fred Krupica

  
	
   

  	
   

  	
   

  

 

 

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Annex 1

 

REPRESENTATIONS AND WARRANTIES

(In the event that you receive WJ
Communications stock)

 

In connection with
the purchase and sale of WJ Communications Stock hereunder, you represent and
warrant to the Company that:

(a)                                  The
WJ Communications Stock to be acquired by you pursuant to this Agreement shall
be acquired for your own account and not with a view to, or intention of,
distribution thereof in violation of the Securities Act, or any applicable
state securities laws, and the WJ Communications Stock shall not be disposed of
in contravention of the Securities Act or any applicable state securities laws.

(b)                                 You
are an officer of the Company, are sophisticated in financial matters and are
able to evaluate the risks and benefits of the investment in the WJ
Communications Stock.  You are an
“accredited investor”, as defined in Regulation D promulgated under the
Securities Act.

(c)                                  To
the extent that any of the securities being purchased by you are not subject to
an effective registration statement, you are able to bear the economic risk of
your investment in such WJ Communications Stock for an indefinite period of
time and you understand that such securities cannot be sold unless subsequently
registered under the Securities Act or an exemption from such registration is
available.

(d)                                 You
have had an opportunity to ask questions and receive answers concerning the
terms and conditions of the offering of WJ Communications Stock and have had
full access to such other information concerning the Company as you have
requested.  You have reviewed, or have
had an opportunity to review, a copy of the Stockholders’ Agreement.

(e)                                  This
Agreement constitutes a legal, valid and binding obligation of yours,
enforceable in accordance with its terms, and the execution, delivery and
performance of this Agreement by you does not and shall not conflict with,
violate or cause a breach of any agreement, contract or instrument to which you
are a party or any judgment, order or decree to which you are subject.

(f)                                    You
are not a party to or bound by any employment agreement, noncompete agreement
or confidentiality agreement with any person or entity other than the Company.

(g)                                 You
have consulted with independent legal counsel regarding your rights and
obligations under this Agreement and you fully understand the terms and
conditions contained herein.  You have
obtained advice from persons other than the Company and its counsel regarding
the tax effects of the transaction contemplated hereby.Exhibit
10.2

 

ABGENIX,
INC.

1996 INCENTIVE STOCK PLAN

(Amended
and Restated as of April 27, 2000)

1.             Purposes of the Plan.  The purposes of this Stock Plan are:

•                  to attract and retain the best available personnel for positions of
substantial responsibility,

•                  to provide additional incentive to Employees, Directors and
Consultants, and

•                  to promote the success of the Company’s business.

Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant.  Stock Purchase Rights may also
be granted under the Plan.

2.             Definitions.  As used herein, the following definitions
shall apply:

(a)           “Administrator”
means the Board or any of its Committees as shall be administering the Plan, in
accordance with Section 4 of the Plan.

(b)           “Applicable
Laws” means the requirements relating to the administration of stock option
plans under U. S. state corporate laws, U.S. federal and state securities laws,
the Code, any stock exchange or quotation system on which the Common Stock is
listed or quoted and the applicable laws of any foreign country or jurisdiction
where Options or Stock Purchase Rights are, or will be, granted under the Plan.

(c)           “Board”
means the Board of Directors of the Company.

(d)           “Code”
means the Internal Revenue Code of 1986, as amended.

(e)           “Committee”  means a committee of Directors appointed by
the Board in accordance with Section 4 of the Plan.

(f)            “Common
Stock” means the common stock of the Company.

(g)           “Company”
means Abgenix, Inc., a Delaware corporation.

(h)           “Consultant”
means any person, including an advisor, engaged by the Company or a Parent or
Subsidiary to render services to such entity.

(i)            “Director”
means a member of the Board.

 

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(j)            “Disability”
means total and permanent disability as defined in Section 22(e)(3) of the
Code.

(k)           “Employee”
means any person, including Officers and Directors, employed by the Company or
any Parent or Subsidiary of the Company. 
A Service Provider shall not cease to be an Employee in the case of
(i) any leave of absence approved by the Company or (ii) transfers
between locations of the Company or between the Company, its Parent, any
Subsidiary, or any successor.  For
purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract.  If reemployment upon
expiration of a leave of absence approved by the Company is not so guaranteed,
on the 181st day of such leave any Incentive Stock Option held by the Optionee
shall cease to be treated as an Incentive Stock Option and shall be treated for
tax purposes as a Nonstatutory Stock Option. 
Neither service as a Director nor payment of a director’s fee by the
Company shall be sufficient to constitute “employment” by the Company.

(l)            “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

(m)          “Fair
Market Value” means, as of any date, the value of Common Stock determined
as follows:

(i)    If the
Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq
SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;

(ii)   If the
Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share of Common Stock shall
be the mean between the high bid and low asked prices for the Common Stock on
the last market trading day prior to the day of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems
reliable; or

(iii)  In the
absence of an established market for the Common Stock, the Fair Market Value
shall be determined in good faith by the Administrator.

(n)           “Incentive
Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

(o)           “Nonstatutory
Stock Option” means an Option not intended to qualify as an Incentive Stock
Option.

 

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(p)           “Notice
of Grant” means a written or electronic notice evidencing certain terms and
conditions of an individual Option or Stock Purchase Right grant.  The Notice of Grant is part of the Option
Agreement.

(q)           “Officer”
means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

(r)            “Option”
means a stock option granted pursuant to the Plan.

(s)           “Option
Agreement” means an agreement between the Company and an Optionee
evidencing the terms and conditions of an individual Option grant.  The Option Agreement is subject to the terms
and conditions of the Plan.

(t)            “Option
Exchange Program” means a program whereby outstanding Options are
surrendered in exchange for Options with a lower exercise price.

(u)           “Optioned Stock”
means the Common Stock subject to an Option or Stock Purchase Right.

(v)           “Optionee”
means the holder of an outstanding Option or Stock Purchase Right granted under
the Plan.

(w)          “Parent”
means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code.

(x)            “Plan”
means this Stock Plan.

(y)           “Restricted
Stock” means shares of Common Stock acquired pursuant to a grant of Stock
Purchase Rights under Section 11 of the Plan.

(z)            “Restricted
Stock Purchase Agreement” means a written agreement between the Company and
the Optionee evidencing the terms and restrictions applying to stock purchased
under a Stock Purchase Right.  The
Restricted Stock Purchase Agreement is subject to the terms and conditions of
the Plan and the Notice of Grant.

(aa)         “Rule 16b-3”
means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.

(bb)         “Section 16(b)
“ means Section 16(b) of the Exchange Act.

(cc)         “Service
Provider” means an Employee, Director or Consultant.

(dd)         “Share”
means a share of the Common Stock, as adjusted in accordance with
Section 13 of the Plan.

 

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(ee)         “Stock
Purchase Right” means the right to purchase Common Stock pursuant to
Section 11 of the Plan, as evidenced by a Notice of Grant.

(ff)           “Subsidiary”
means a “subsidiary corporation”, whether now or hereafter existing, as defined
in Section 424(f) of the Code.

3.             Stock Subject to the Plan.  Subject to the provisions of Section 13
of the Plan, the maximum aggregate number of Shares which may be optioned and
sold under the Plan is _________ Shares. 
The Shares may be authorized, but unissued, or reacquired Common Stock.

If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall
become available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been
issued under the Plan, whether upon exercise of an Option or Right, shall not
be returned to the Plan and shall not become available for future distribution
under the Plan, except that if Shares of Restricted Stock are repurchased by
the Company at their original purchase price, such Shares shall become
available for future grant under the Plan.

4.             Administration of the Plan.

(a)           Procedure.

(i)    Multiple
Administrative Bodies.  The Plan may
be administered by different Committees with respect to different groups of
Service Providers.

(ii)   Section 162(m).
To the extent that the Administrator determines it to be desirable to qualify
Options granted hereunder as “performance-based compensation” within the
meaning of Section 162(m) of the Code, the Plan shall be administered by a
Committee of two or more “outside directors” within the meaning of
Section 162(m) of the Code.

(iii)  Rule 16b-3.  To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the requirements for
exemption under Rule 16b-3.

(iv)   Other
Administration.  Other than as
provided above, the Plan shall be administered by (A) the Board or
(B) a Committee, which committee shall be constituted to satisfy
Applicable Laws.

(b)           Powers of the Administrator.  Subject to the provisions of the Plan, and
in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:

(i)    to
determine the Fair Market Value;

 

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(ii)          to select the Service Providers to
whom Options and Stock Purchase Rights may be granted hereunder;

(iii)         to determine the number of shares of
Common Stock to be covered by each Option and Stock Purchase Right granted
hereunder;

(iv)        to approve forms of agreement for use
under the Plan;

(v)         to determine the terms and conditions,
not inconsistent with the terms of the Plan, of any Option or Stock Purchase
Right granted hereunder.  Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options or Stock Purchase Rights may be exercised (which may be
based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Option
or Stock Purchase Right or the shares of Common Stock relating thereto, based
in each case on such factors as the Administrator, in its sole discretion,
shall determine;

(vi)        [reserved];

(vii)       to institute an Option Exchange Program;

(viii)      to construe and interpret the terms of the
Plan and awards granted pursuant to the Plan;

(ix)         to prescribe, amend and rescind rules
and regulations relating to the Plan, including rules and regulations relating
to sub-plans established for the purpose of qualifying for preferred tax
treatment under foreign tax laws;

(x)          to modify or amend each Option or
Stock Purchase Right (subject to Section 15(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period of
Options longer than is otherwise provided for in the Plan, provided however,
the Board shall not have the power to reprice Options or Stock Purchase Rights
once granted, except for adjustments resulting from a stock split, reverse
stock split or similar change to the outstanding capital stock;

(xi)         to allow Optionees to satisfy
withholding tax obligations by electing to have the Company withhold from the
Shares to be issued upon exercise of an Option or Stock Purchase Right that
number of Shares having a Fair Market Value equal to the amount required to be
withheld.  The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined.  All
elections by an Optionee to have Shares withheld for this purpose shall be made
in such form and under such conditions as the Administrator may deem necessary
or advisable;

 

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(xii)        to authorize any person to execute on
behalf of the Company any instrument required to effect the grant of an Option
or Stock Purchase Right previously granted by the Administrator;

(xiii)       to make all other determinations deemed
necessary or advisable for administering the Plan.

(c)           Effect of Administrator’s Decision.  The Administrator’s decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options or Stock Purchase Rights.

5.             Eligibility.  Nonstatutory Stock Options and Stock
Purchase Rights may be granted to Service Providers.  Incentive Stock Options may be granted only to Employees.

6.             Limitations.

(a)           Each
Option shall be designated in the Option Agreement as either an Incentive Stock
Option or a Nonstatutory Stock Option. 
However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by the Optionee during any calendar
year (under all plans of the Company and any Parent or Subsidiary) exceeds
$100,000, such Options shall be treated as Nonstatutory Stock Options.  For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in which they
were granted.  The Fair Market Value of
the Shares shall be determined as of the time the Option with respect to such
Shares is granted.

(b)           Neither
the Plan nor any Option or Stock Purchase Right shall confer upon an Optionee
any right with respect to continuing the Optionee’s relationship as a Service
Provider with the Company, nor shall they interfere in any way with the
Optionee’s right or the Company’s right to terminate such relationship at any
time, with or without cause.

(c)           The
following limitations shall apply to grants of Options:

(i)    No Service
Provider shall be granted, in any fiscal year of the Company, Options to
purchase more than 750,000 Shares.

(ii)   In
connection with his or her initial service, a Service Provider may be granted
Options to purchase up to an additional 500,000 Shares which shall not count
against the limit set forth in subsection (i) above.

(iii)  The
foregoing limitations shall be adjusted proportionately in connection with any
change in the Company’s capitalization as described in Section 13.

(iv)    If an Option is cancelled in the same fiscal
year of the Company in which it was granted (other than in connection with a
transaction described in Section 13), the 

 

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cancelled
Option will be counted against the limits set forth in subsections (i) and (ii)
above.  For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.

7.             Term of Plan.  Subject to Section 19 of the Plan, the
Plan shall become effective upon its adoption by the Board.  It shall continue in effect for a term of
ten (10) years unless terminated earlier under Section 15 of the Plan.

8.             Term
of Option.  The term of each Option
shall be stated in the Option Agreement. 
In the case of an Incentive Stock Option, the term shall be
ten (10) years from the date of grant or such shorter term as may be
provided in the Option Agreement.  Moreover,
in the case of an Incentive Stock Option granted to an Optionee who, at the
time the Incentive Stock Option is granted, owns stock representing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any Parent or Subsidiary, the term of the Incentive Stock Option
shall be five (5) years from the date of grant or such shorter term as may be
provided in the Option Agreement.

9.             Option
Exercise Price and Consideration.

(a)           Exercise
Price.  The per share exercise price
for the Shares to be issued pursuant to exercise of an Option shall be
determined by the Administrator, subject to the following:

(i)    In the
case of an Incentive Stock Option

(A)     granted
to an Employee who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant.

(B)      granted
to any Employee other than an Employee described in paragraph (A)
immediately above, the per Share exercise price shall be no less than 100% of
the Fair Market Value per Share on the date of grant.

(ii)       In the case of a Nonstatutory Stock
Option, the per Share exercise price shall be determined by the
Administrator.  In the case of a
Nonstatutory Stock Option intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the per
Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.

(iii)  Notwithstanding
the foregoing, Options may be granted with a per Share exercise price of less
than 100% of the Fair Market Value per Share on the date of grant pursuant to a
merger or other corporate transaction.

 

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(b)           Waiting
Period and Exercise Dates.  At the
time an Option is granted, the Administrator shall fix the period within which
the Option may be exercised and shall determine any conditions which must be
satisfied before the Option may be exercised.

(c)           Form
of Consideration.  The Administrator
shall determine the acceptable form of consideration for exercising an Option,
including the method of payment.  In the
case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant.  Such consideration may consist entirely of:

(i)           cash;

(ii)          check;

(iii)         promissory note;

(iv)        other Shares which (A) in the case
of Shares acquired upon exercise of an option, have been owned by the Optionee
for more than six months on the date of surrender, and (B) have a Fair
Market Value on the date of surrender equal to the aggregate exercise price of
the Shares as to which said Option shall be exercised;

(v)         consideration received by the Company
under a cashless exercise program implemented by the Company in connection with
the Plan;

(vi)        a reduction in the amount of any Company
liability to the Optionee, including any liability attributable to the
Optionee’s participation in any Company-sponsored deferred compensation program
or arrangement;

(vii)       any combination of the foregoing methods
of payment; or

(viii)      such other consideration and method of
payment for the issuance of Shares to the extent permitted by Applicable Laws.

10.           Exercise of Option.

(a)           Procedure for Exercise;
Rights as a Stockholder. Any Option granted hereunder shall be exercisable
according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Option Agreement.  Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence.  An Option may not be exercised
for a fraction of a Share.

An Option shall be deemed exercised when the Company receives: (i)
written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised.  Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan.  Shares issued upon exercise of an Option shall 

 

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be issued in the name of the Optionee or, if requested
by the Optionee, in the name of the Optionee and his or her spouse.  Until the Shares are issued (as evidenced by
the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. 
The Company shall issue (or cause to be issued) such Shares promptly
after the Option is exercised.  No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Shares are issued, except as provided in
Section 13 of the Plan.

Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

(b)           Termination of
Relationship as a Service Provider. 
If an Optionee ceases to be a Service Provider, other than upon the
Optionee’s death or Disability, the Optionee may exercise his or her Option
within such period of time as is specified in the Option Agreement to the
extent that the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement).  In the absence of a
specified time in the Option Agreement, the Option shall remain exercisable for
three (3) months following the Optionee’s termination.  If, on the date of termination, the Optionee
is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option shall revert to the Plan.  If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

(c)           Disability
of Optionee.  If an Optionee ceases
to be a Service Provider as a result of the Optionee’s Disability, the Optionee
may exercise his or her Option within such period of time as is specified in
the Option Agreement to the extent the Option is vested on the date of
termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). 
In the absence of a specified time in the Option Agreement, the Option
shall remain exercisable for twelve (12) months following the Optionee’s
termination.  If, on the date of termination,
the Optionee is not vested as to his or her entire Option, the Shares covered
by the unvested portion of the Option shall revert to the Plan.  If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

(d)           Death of Optionee.  If an Optionee dies while a Service
Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement (but in no event later than the expiration of
the term of such Option as set forth in the Notice of Grant), by the Optionee’s
estate or by a person who acquires the right to exercise the Option by bequest
or inheritance, but only to the extent that the Option is vested on the date of
death.  In the absence of a specified
time in the Option Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee’s termination.  If, at the time of death, the Optionee is not vested as to his or

 

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her
entire Option, the Shares covered by the unvested portion of the Option shall
immediately revert to the Plan.  The
Option may be exercised by the executor or administrator of the Optionee’s
estate or, if none, by the person(s) entitled to exercise the Option under the
Optionee’s will or the laws of descent or distribution.  If the Option is not so exercised within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.

(e)           Buyout
Provisions.  The Administrator may
at any time offer to buy out for a payment in cash or Shares an Option
previously granted based on such terms and conditions as the Administrator
shall establish and communicate to the Optionee at the time that such offer is
made.

11.           Stock
Purchase Rights.

(a)           Rights
to Purchase.  Stock Purchase Rights
may be issued either alone, in addition to, or in tandem with other awards
granted under the Plan and/or cash awards made outside of the Plan.  After the Administrator determines that it
will offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing or electronically, by means of a Notice of Grant, of the terms,
conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid,
and the time within which the offeree must accept such offer.  The offer shall be accepted by execution of
a Restricted Stock Purchase Agreement in the form determined by the
Administrator.

(b)           Repurchase
Option.  Unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary termination
of the purchaser’s service with the Company for any reason (including death or
Disability).  The purchase price for
Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be
the original price paid by the purchaser and may be paid by cancellation of any
indebtedness of the purchaser to the Company. 
The repurchase option shall lapse at a rate determined by the
Administrator.

(c)           Other
Provisions.  The Restricted Stock
Purchase Agreement shall contain such other terms, provisions and conditions
not inconsistent with the Plan as may be determined by the Administrator in its
sole discretion.

(d)           Rights
as a Stockholder.  Once the Stock
Purchase Right is exercised, the purchaser shall have the rights equivalent to
those of a stockholder, and shall be a stockholder when his or her purchase is
entered upon the records of the duly authorized transfer agent of the
Company.  No adjustment will be made for
a dividend or other right for which the record date is prior to the date the
Stock Purchase Right is exercised, except as provided in Section 13 of the
Plan.

12.           Non-Transferability of Options
and Stock Purchase Rights.  Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right
may not be sold, pledged, assigned, hypothecated, transferred, or disposed of
in any manner other than by will or by the laws of descent or distribution and
may be exercised, during the lifetime of the Optionee, only by the
Optionee.  If the Administrator makes an
Option or Stock Purchase Right transferable, such Option 

 

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or Stock
Purchase Right shall contain such additional terms and conditions as the
Administrator deems appropriate.

13.           Adjustments Upon Changes in Capitalization,
Dissolution, Merger or Asset Sale.

(a)           Changes
in Capitalization.  Subject to any
required action by the stockholders of the Company, the number of shares of
Common Stock covered by each outstanding Option and Stock Purchase Right, and
the number of shares of Common Stock which have been authorized for issuance
under the Plan but as to which no Options or Stock Purchase Rights have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option or Stock Purchase Right, as well as the price per share
of Common Stock covered by each such outstanding Option or Stock Purchase
Right, shall be proportionately adjusted for any increase or decrease in the
number of issued shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been “effected without receipt of
consideration.”  Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive.  Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option or Stock Purchase Right.

(b)           Dissolution
or Liquidation.  In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall
notify each Optionee as soon as practicable prior to the effective date of such
proposed transaction.  The Administrator
in its discretion may provide for an Optionee to have the right to exercise his
or her Option until ten (10) days prior to such transaction as to all of the
Optioned Stock covered thereby, including Shares as to which the Option would
not otherwise be exercisable.  In
addition, the Administrator may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Option or Stock Purchase
Right shall lapse as to all such Shares, provided the proposed dissolution or
liquidation takes place at the time and in the manner contemplated.  To the extent it has not been previously
exercised, an Option or Stock Purchase Right will terminate immediately prior
to the consummation of such proposed action.

(c)           Merger
or Asset Sale.  In the event of a
merger of the Company with or into another corporation, or the sale of
substantially all of the assets of the Company, each outstanding Option and
Stock Purchase Right shall be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation.  In the event
that the successor corporation refuses to assume or substitute for the Option
or Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or
exercisable.  If an Option or Stock
Purchase Right becomes fully vested and exercisable in lieu of 

 

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assumption
or substitution in the event of a merger or sale of assets, the Administrator
shall notify the Optionee in writing or electronically that the Option or Stock
Purchase Right shall be fully vested and exercisable for a period of fifteen
(15) days from the date of such notice, and the Option or Stock Purchase Right
shall terminate upon the expiration of such period.  For the purposes of this paragraph, the Option or Stock Purchase
Right shall be considered assumed if, following the merger or sale of assets,
the option or right confers the right to purchase or receive, for each Share of
Optioned Stock subject to the Option or Stock Purchase Right immediately prior to
the merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets is
not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option or Stock
Purchase Right, for each Share of Optioned Stock subject to the Option or Stock
Purchase Right, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.

14.           Date
of Grant.  The date of grant of an
Option or Stock Purchase Right shall be, for all purposes, the date on which
the Administrator makes the determination granting such Option or Stock
Purchase Right, or such other later date as is determined by the Administrator.  Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such
grant.

15.           Amendment and Termination of the Plan.

(a)           Amendment
and Termination.  The Board may at
any time amend, alter, suspend or terminate the Plan.

(b)           Stockholder
Approval.  The Company shall obtain
stockholder approval of any Plan amendment to the extent necessary and
desirable to comply with Applicable Laws.

(c)           Effect of Amendment or Termination.  No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Optionee, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company.  Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with
respect to Options granted under the Plan prior to the date of such
termination.

16.           Conditions Upon Issuance of Shares.

(a)           Legal
Compliance.  Shares shall not be
issued pursuant to the exercise of an Option or Stock Purchase Right unless the
exercise of such Option or Stock Purchase Right and the 

 

-12-

 

issuance
and delivery of such Shares shall comply with Applicable Laws and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.

(b)           Investment
Representations.  As a condition to
the exercise of an Option or Stock Purchase Right, the Company may require the
person exercising such Option or Stock Purchase Right to represent and warrant
at the time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required.

17.           Inability
to Obtain Authority.  The inability
of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, 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.

18.           Reservation of Shares.  The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

19.           Stockholder
Approval.  The Plan shall be subject
to approval by the stockholders of the Company within twelve (12) months after
the date the Plan is adopted.  Such
stockholder approval shall be obtained in the manner and to the degree required
under Applicable Laws.

 

-13-

 

 

ABGENIX,
INC.

1996 INCENTIVE STOCK PLAN

(Amended
and Restated as of April 27, 2000)

 

STOCK OPTION AGREEMENT

 

Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Option Agreement.

I. NOTICE
OF STOCK OPTION GRANT

[Optionee’s Name and Address]

You have been granted an option to purchase Common Stock of the
Company, subject to the terms and conditions of the Plan and this Option
Agreement, as follows:

	
   

  	
   

  	
   

  
	
  Grant Number

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date of Grant

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Vesting Commencement
  Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exercise Price per
  Share

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Number of Shares
  Granted

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Exercise Price

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
  Incentive Stock Option

  
	
   

  	
   

  	
   

  
	
   

  	
  Nonstatutory Stock
  Option

  	
   

  
	
   

  	
   

  	
   

  
	
  Term/Expiration Date:

  	
   

  	
   

  
																			

Vesting Schedule:

This Option may be exercised, in whole or in part, in accordance with
the following schedule:

[25% of the Shares subject to the Option shall vest twelve months after
the Vesting Commencement Date, and 1/48 of the Shares subject to the Option
shall vest each month thereafter, subject to the Optionee continuing to be a
Service Provider on such dates.]

 

-1-

 

Termination Period:

This Option may be exercised for (30/60/90) days after Optionee ceases
to be a Service Provider.  Upon the
death or Disability of the Optionee, this Option may be exercised for one year
after Optionee ceases to be a Service Provider.  In no event shall this Option be exercised later than the
Term/Expiration Date as provided above.

II. AGREEMENT

1.             Grant
of Option.  The Plan Administrator
of the Company hereby grants to the Optionee named in the Notice of Grant
attached as Part I of this Agreement (the “Optionee”) an option (the “Option”)
to purchase the number of Shares, as set forth in the Notice of Grant, at the
exercise price per share set forth in the Notice of Grant (the “Exercise
Price”), subject to the terms and conditions of the Plan, which is incorporated
herein by reference.  Subject to
Section 15(c) of the Plan, in the event of a conflict between the terms
and conditions of the Plan and the terms and conditions of this Option
Agreement, the terms and conditions of the Plan shall prevail.

If designated in the Notice of Grant as an Incentive Stock Option
(“ISO”), this Option is intended to qualify as an Incentive Stock Option under
Section 422 of the Code.  However,
if this Option is intended to be an Incentive Stock Option, to the extent that
it exceeds the $100,000 rule of Code Section 422(d) it shall be treated as
a Nonstatutory Stock Option (“NSO”).

2.             Exercise
of Option.

a)              Right
to Exercise.  This Option is
exercisable during its term in accordance with the Vesting Schedule set out in
the Notice of Grant and the applicable provisions of the Plan and this Option
Agreement.

b)            Method
of Exercise.  This Option is
exercisable by delivery of an exercise notice, in the form attached as
Exhibit A (the “Exercise Notice”), which shall state the election to
exercise the Option, the number of Shares in respect of which the Option is
being exercised (the “Exercised Shares”), and such other representations and
agreements as may be required by the Company pursuant to the provisions of the
Plan.  The Exercise Notice shall be
completed by the Optionee and delivered to the Secretary of the Company.  The Exercise Notice shall be accompanied by
payment of the aggregate Exercise Price as to all Exercised Shares.  This Option shall be deemed to be exercised
upon receipt by the Company of such fully executed Exercise Notice accompanied
by such aggregate Exercise Price.

No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with Applicable Laws.  Assuming such compliance, for income tax
purposes the Exercised Shares shall be considered transferred to the Optionee
on the date the Option is exercised with respect to such Exercised Shares.

 

-2-

 

3.             Method
of Payment.  Payment of the
aggregate Exercise Price shall be by any of the following, or a combination
thereof, at the election of the Optionee:

c)             cash;
or

d)            check;
or

e)             consideration
received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan; or

f)             surrender
of other Shares which (i) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six (6) months on the
date of surrender, and (ii) have a Fair Market Value on the
date of surrender equal to the aggregate Exercise Price of the Exercised
Shares; or

g)            with
the Administrator’s consent, delivery of Optionee’s promissory note (the
“Note”) in the form attached hereto as Exhibit C, in the amount of the
aggregate Exercise Price of the Exercised Shares together with the execution
and delivery by the Optionee of the Security Agreement attached hereto as Exhibit B.  The Note shall bear interest at the
“applicable federal rate” prescribed under the Code and its regulations at time
of purchase, and shall be secured by a pledge of the Shares purchased by the
Note pursuant to the Security Agreement.

4.             Non-Transferability
of Option.  This Option may not be
transferred in any manner otherwise than by will or by the laws of descent or
distribution and may be exercised during the lifetime of Optionee only by the
Optionee.  The terms of the Plan and
this Option Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Optionee.

5.             Term
of Option.  This Option may be
exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option Agreement.

6.             Tax
Consequences.  Some of the federal
tax consequences relating to this Option, as of the date of this Option, are
set forth below.  THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO
CHANGE.  THE OPTIONEE SHOULD CONSULT A
TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

h)            Exercising
the Option.

i)      Nonstatutory Stock Option.  The Optionee may incur regular federal income tax liability upon
exercise of a NSO.  The Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the Fair Market Value of the Exercised
Shares on the date of exercise over their aggregate Exercise 

 

-3-

 

Price.  If the
Optionee is an Employee or a former Employee, the Company will be required to
withhold from his or her compensation or collect from Optionee and pay to the
applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

ii)         Incentive
Stock Option.  If this Option
qualifies as an ISO, the Optionee will have no regular federal income tax
liability upon its exercise, although the excess, if any, of the Fair Market
Value of the Exercised Shares on the date of exercise over their aggregate
Exercise Price will be treated as an adjustment to alternative minimum taxable
income for federal tax purposes and may subject the Optionee to alternative
minimum tax in the year of exercise.  In
the event that the Optionee ceases to be an Employee but remains a Service
Provider, any Incentive Stock Option of the Optionee that remains unexercised
shall cease to qualify as an Incentive Stock Option and will be treated for tax
purposes as a Nonstatutory Stock Option on the date three (3) months and one
(1) day following such change of status.

i)              Disposition
of Shares.

i)      NSO.  If the
Optionee holds NSO Shares for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes.

ii)         ISO.  If the Optionee holds ISO Shares for at
least one year after exercise and two years after the grant date, any gain
realized on disposition of the Shares will be treated as long-term capital gain
for federal income tax purposes.  If the
Optionee disposes of ISO Shares within one year after exercise or two years
after the grant date, any gain realized on such disposition will be treated as
compensation income (taxable at ordinary income rates) to the extent of the
excess, if any, of the lesser of (A) the difference between the Fair Market
Value of the Shares acquired on the date of exercise and the aggregate Exercise
Price, or (B) the difference between the sale price of such Shares and the
aggregate Exercise Price.  Any additional
gain will be taxed as capital gain, short-term or long-term depending on the
period that the ISO Shares were held.

j)              Notice
of Disqualifying Disposition of ISO Shares.  If the Optionee sells or otherwise disposes of any of the Shares
acquired pursuant to an ISO on or before the later of (i) two years after
the grant date, or (ii) one year after the exercise date, the Optionee
shall immediately notify the Company in writing of such disposition.  The Optionee agrees that he or she may be
subject to income tax withholding by the Company on the compensation 

 

-4-

 

income
recognized from such early disposition of ISO Shares by payment in cash or out
of the current earnings paid to the Optionee.

7.             Entire
Agreement; Governing Law.  The Plan
is incorporated herein by reference. 
The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Company and
Optionee.  This agreement is governed by
the internal substantive laws, but not the choice of law rules, of California.

8.             NO
GUARANTEE OF CONTINUED SERVICE. 
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER
AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER).  OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN
DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE
OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

By your signature and the signature of the Company’s representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement.  Optionee has reviewed the Plan and this
Option Agreement in their entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Option Agreement and fully understands all
provisions of the Plan and Option Agreement. 
Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions relating
to the Plan and Option Agreement. 
Optionee further agrees to notify the Company upon any change in the
residence address indicated below.

	
   

  	
   

  
	
   

  	
  OPTIONEE:

  	
   

  	
  ABGENIX, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  	
  By

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Print Name

  	
   

  	
  Title

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Residence Address

  	
   

  
	
   

  	
   

  	
   

  	
   

  
					

 

-5-

 

CONSENT OF SPOUSE

 

The undersigned spouse of Optionee has read and hereby approves the
terms and conditions of the Plan and this Option Agreement.  In consideration of the Company’s granting
his or her spouse the right to purchase Shares as set forth in the Plan and
this Option Agreement, the undersigned hereby agrees to be irrevocably bound by
the terms and conditions of the Plan and this Option Agreement and further
agrees that any community property interest shall be similarly bound.  The undersigned hereby appoints the
undersigned’s spouse as attorney-in-fact for the undersigned with respect to
any amendment or exercise of rights under the Plan or this Option Agreement.

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Spouse of Optionee

  	
   

  

 

-6-

 

 EXHIBIT A

 

ABGENIX, INC.

1996 INCENTIVE
STOCK PLAN

(Amended and Restated as of April 27, 2000)

 

 EXERCISE NOTICE

Abgenix, Inc.

7601 Dumbarton Circle

Fremont, CA 
94555

Attention: 
Secretary

1.             Exercise
of Option.  Effective as of today,
________________, 199__, the undersigned (“Purchaser”) hereby elects to
purchase ______________ shares (the “Shares”) of the Common Stock of Abgenix,
Inc. (the “Company”) under and pursuant to the 1996 Incentive Stock Plan, as
Amended and Restated as of April 27, 2000 (the “Plan”) and the Stock Option
Agreement dated, 19___ (the “Option Agreement”).  The purchase price for the Shares shall be $_______, as required
by the Option Agreement.

2.             Delivery
of Payment.  Purchaser herewith
delivers to the Company the full purchase price for the Shares.

3.             Representations
of Purchaser.  Purchaser acknowledges
that Purchaser has received, read and understood the Plan and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.

4.             Rights
as Stockholder.  Until the issuance
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the Shares, no right to vote or
receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of the Option.  The Shares so acquired shall be issued to
the Optionee as soon as practicable after exercise of the Option.  No adjustment will be made for a dividend or
other right for which the record date is prior to the date of issuance, except
as provided in Section 13 of the Plan.

5.             Tax
Consultation.  Purchaser understands
that Purchaser may suffer adverse tax consequences as a result of Purchaser’s
purchase or disposition of the Shares. 
Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with 

-1-

 

the
purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.

6.             Entire
Agreement; Governing Law.  The Plan
and Option Agreement are incorporated herein by reference.  This Agreement, the Plan and the Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Purchaser with respect to the subject matter
hereof, and may not be modified adversely to the Purchaser’s interest except by
means of a writing signed by the Company and Purchaser.  This agreement is governed by the internal
substantive laws, but not the choice of law rules, of the State of California.

	
   

  
	
   

  	
  Submitted by:

  	
   

  	
  Accepted by:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PURCHASER:

  	
   

  	
  ABGENIX, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  	
  By

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Print Name

  	
   

  	
  Its

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address: 

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Abgenix, Inc.

  
	
   

  	
   

  	
   

  	
  7601 Dumbarton Circle

  
	
   

  	
   

  	
   

  	
  Fremont, CA  94555

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date Received

  	
   

  	
   

  

 

-2-

 

EXHIBIT B

SECURITY AGREEMENT

This Security Agreement is made as of __________, 19___ between
Abgenix, Inc., a Delaware corporation (“Pledgee”), and
_________________________ (“Pledgor”).

Recitals

Pursuant to Pledgor’s election to purchase Shares under the Option
Agreement dated ________ (the “Option”), between Pledgor and Pledgee under
Pledgee’s 1996 Incentive Stock Plan, as Amended and Restated as of April 27,
2000, and Pledgor’s election under the terms of the Option to pay for such
shares with his promissory note (the “Note”), Pledgor has purchased _________
shares of Pledgee’s Common Stock (the “Shares”) at a price of $________ per
share, for a total purchase price of $__________.  The Note and the obligations thereunder are as set forth in
Exhibit C to the Option.

NOW, THEREFORE, it is agreed as follows:

1.             Creation
and Description of Security Interest. 
In consideration of the transfer of the Shares to Pledgor under the
Option Agreement, Pledgor, pursuant to the California Commercial Code, hereby
pledges all of such Shares (herein sometimes referred to as the “Collateral”)
represented by certificate number ______, duly endorsed in blank or with
executed stock powers, and herewith delivers said certificate to the Secretary
of Pledgee (“Pledgeholder”), who shall hold said certificate subject to the
terms and conditions of this Security Agreement.

The pledged stock (together with an executed blank stock assignment for
use in transferring all or a portion of the Shares to Pledgee if, as and when
required pursuant to this Security Agreement) shall be held by the Pledgeholder
as security for the repayment of the Note, and any extensions or renewals
thereof, to be executed by Pledgor pursuant to the terms of the Option, and the
Pledgeholder shall not encumber or dispose of such Shares except in accordance
with the provisions of this Security Agreement.

2.             Pledgor’s
Representations and Covenants.  To
induce Pledgee to enter into this Security Agreement, Pledgor represents and
covenants to Pledgee, its successors and assigns, as follows:

(b)           Payment
of Indebtedness.  Pledgor will pay
the principal sum of the Note secured hereby, together with interest thereon,
at the time and in the manner provided in the Note.

(c)           Encumbrances.  The Shares are free of all other
encumbrances, defenses and liens, and Pledgor will not further encumber the
Shares without the prior written consent of Pledgee.

 

-1-

 

(d)           Margin
Regulations.  In the event that
Pledgee’s Common Stock is now or later becomes margin-listed by the Federal
Reserve Board and Pledgee is classified as a “lender” within the meaning of the
regulations under Part 207 of Title 12 of the Code of Federal
Regulations (“Regulation G”), Pledgor agrees to cooperate with Pledgee in
making any amendments to the Note or providing any additional collateral as may
be necessary to comply with such regulations.

3.             Voting
Rights.  During the term of this
pledge and so long as all payments of principal and interest are made as they
become due under the terms of the Note, Pledgor shall have the right to vote
all of the Shares pledged hereunder.

4.             Stock
Adjustments.  In the event that
during the term of the pledge any stock dividend, reclassification,
readjustment or other changes are declared or made in the capital structure of
Pledgee, all new, substituted and additional shares or other securities issued
by reason of any such change shall be delivered to and held by the Pledgee
under the terms of this Security Agreement in the same manner as the Shares
originally pledged hereunder.  In the
event of substitution of such securities, Pledgor, Pledgee and Pledgeholder
shall cooperate and execute such documents as are reasonable so as to provide
for the substitution of such Collateral and, upon such substitution, references
to “Shares” in this Security Agreement shall include the substituted shares of
capital stock of Pledgor as a result thereof.

5.             Options
and Rights.  In the event that,
during the term of this pledge, subscription Options or other rights or options
shall be issued in connection with the pledged Shares, such rights, Options and
options shall be the property of Pledgor and, if exercised by Pledgor, all new
stock or other securities so acquired by Pledgor as it relates to the pledged
Shares then held by Pledgeholder shall be immediately delivered to
Pledgeholder, to be held under the terms of this Security Agreement in the same
manner as the Shares pledged.

6.             Default.  Pledgor shall be deemed to be in default of
the Note and of this Security Agreement in the event:

(e)           Payment
of principal or interest on the Note shall be delinquent for a period of 10
days or more; or

(f)            Pledgor
fails to perform any of the covenants set forth in the Option or contained in
this Security Agreement for a period of 10 days after written notice thereof
from Pledgee.

In the case of an event of Default, as set forth above, Pledgee shall have
the right to accelerate payment of the Note upon notice to Pledgor, and Pledgee
shall thereafter be entitled to pursue its remedies under the [state]
Commercial Code.

7.             Release
of Collateral.  Subject to any
applicable contrary rules under Regulation G, there shall be released from
this pledge a portion of the pledged Shares held by Pledgeholder hereunder upon
payments of the principal of the Note. 
The number of the pledged Shares which shall be 

 

-2-

 

released
shall be that number of full Shares which bears the same proportion to the
initial number of Shares pledged hereunder as the payment of principal bears to
the initial full principal amount of the Note.

8.             Withdrawal
or Substitution of Collateral.  Pledgor shall not sell, withdraw, pledge, substitute or otherwise
dispose of all or any part of the Collateral without the prior written consent
of Pledgee.

9.             Term.  The within pledge of Shares shall continue
until the payment of all indebtedness secured hereby, at which time the
remaining pledged stock shall be promptly delivered to Pledgor, subject to the
provisions for prior release of a portion of the Collateral as provided in
paragraph 7 above.

10.           Insolvency.  Pledgor agrees that if a bankruptcy or insolvency
proceeding is instituted by or against it, or if a receiver is appointed for
the property of Pledgor, or if Pledgor makes an assignment for the benefit of
creditors, the entire amount unpaid on the Note shall become immediately due
and payable, and Pledgee may proceed as provided in the case of default.

11.           Pledgeholder
Liability.  In the absence of
willful or gross negligence, Pledgeholder shall not be liable to any party for
any of his acts, or omissions to act, as Pledgeholder.

12.           Invalidity
of Particular Provisions.  Pledgor
and Pledgee agree that the enforceability or invalidity of any provision or
provisions of this Security Agreement shall not render any other provision or
provisions herein contained unenforceable or invalid.

13.           Successors
or Assigns.  Pledgor and Pledgee
agree that all of the terms of this Security Agreement shall be binding on
their respective successors and assigns, and that the term “Pledgor” and the
term “Pledgee” as used herein shall be deemed to include, for all purposes, the
respective designees, successors, assigns, heirs, executors and administrators.

14.           Governing
Law.  This Security Agreement shall
be interpreted and governed under the internal substantive laws, but not the
choice of law rules, of California.

 

-3-

 

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	
   

  	
   

  	
   

  
	
   

  	
  “PLEDGOR”

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “PLEDGEE” Abgenix,
  Inc.,

  	
   

  
	
   

  	
  a Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “PLEDGEHOLDER”

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Secretary of

  	
   

  
	
   

  	
  Abgenix, Inc.

  	
   

  
					

-4-

 

EXHIBIT C

NOTE

$_______________Fremont, California

______________,
19___

FOR VALUE RECEIVED, _______________ promises to pay to Abgenix, Inc., a
Delaware corporation (the “Company”), or order, the principal sum of
_______________________ ($_____________), together with interest on the unpaid
principal hereof from the date hereof at the rate of _______________ percent
(____%) per annum, compounded semiannually.

Principal and interest shall be due and payable on __________,
19___.   Payment of principal and
interest shall be made in lawful money of the United States of America.

The undersigned may at any time prepay all or any portion of the
principal or interest owing hereunder.

This Note is subject to the terms of the Option, dated as of
________________.  This Note is secured
in part by a pledge of the Company’s Common Stock under the terms of a Security
Agreement of even date herewith and is subject to all the provisions thereof.

The holder of this Note shall have full recourse against the
undersigned, and shall not be required to proceed against the collateral
securing this Note in the event of default.

In the event the undersigned shall cease to be an employee, director or
consultant of the Company for any reason, this Note shall, at the option of the
Company, be accelerated, and the whole unpaid balance on this Note of principal
and accrued interest shall be immediately due and payable.

Should any action be instituted for the collection of this Note, the
reasonable costs and attorneys’ fees therein of the holder shall be paid by the
undersigned.

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

 

-1-

 

 

ABGENIX,
INC.

1996 INCENTIVE STOCK PLAN

(Amended
and Restated as of April 27, 2000)

NOTICE OF GRANT OF STOCK PURCHASE
RIGHT

Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Notice of Grant.

[Grantee’s Name and Address]

You have been granted the right to purchase Common Stock of the
Company, subject to the Company’s Repurchase Option and your ongoing status as
a Service Provider (as described in the Plan and the attached Restricted Stock
Purchase Agreement), as follows:

	
   

  	
   

  	
   

  
	
   

  	
  Grant Number

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date of Grant

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Price Per Share  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Total Number of Shares
  Subject

  to This Stock Purchase
  Right_____________________

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Expiration Date:

  	
   

  	
   

  
								

YOU MUST EXERCISE THIS STOCK PURCHASE RIGHT BEFORE THE EXPIRATION DATE
OR IT WILL TERMINATE AND YOU WILL HAVE NO FURTHER RIGHT TO PURCHASE THE
SHARES.  By your signature and the
signature of the Company’s representative below, you and the Company agree that
this Stock Purchase Right is granted under and governed by the terms and
conditions of the 1996 Incentive Stock Plan, as Amended and Restated as of
April 27, 2000, and the Restricted Stock Purchase Agreement, attached hereto as
Exhibit A-1, both of which are made a part of this document.  You further agree to execute the attached
Restricted Stock Purchase Agreement as a condition to purchasing any shares
under this Stock Purchase Right.

 

	
   

  	
  GRANTEE:

  	
   

  	
  ABGENIX, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Print Name

  	
   

  	
  Title

  	
   

  

 

 

-1-

 

EXHIBIT
A-1

 

ABGENIX, INC.

1996 INCENTIVE
STOCK PLAN

(Amended and Restated as of April 27, 2000)

RESTRICTED STOCK
PURCHASE AGREEMENT

Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Restricted Stock Purchase Agreement.

WHEREAS the Purchaser named in the Notice of Grant, (the “Purchaser”)
is an  Service Provider, and the
Purchaser’s continued participation is considered by the Company to be
important for the Company’s continued growth; and

WHEREAS in order to give the Purchaser an opportunity to acquire an
equity interest in the Company as an incentive for the Purchaser to participate
in the affairs of the Company, the Administrator has granted to the Purchaser a
Stock Purchase Right subject to the terms and conditions of the Plan and the
Notice of Grant, which are incorporated herein by reference, and pursuant to
this Restricted Stock Purchase Agreement (the “Agreement”).

NOW THEREFORE, the parties agree as follows:

1.             Sale
of Stock.  The Company hereby agrees
to sell to the Purchaser and the Purchaser hereby agrees to purchase shares of
the Company’s Common Stock (the “Shares”), at the per Share purchase price and
as otherwise described in the Notice of Grant.

2.             Payment
of Purchase Price.  The purchase
price for the Shares may be paid by delivery to the Company at the time of
execution of this Agreement of cash, a check, or some combination thereof.

3.             Repurchase
Option.

(g)           In
the event the Purchaser ceases to be a Service Provider for any or no reason
(including death or disability) before all of the Shares are released from the
Company’s Repurchase Option (see Section 4), the Company shall, upon the
date of such termination (as reasonably fixed and determined by the Company)
have an irrevocable, exclusive option (the “Repurchase Option”) for a period of
sixty (60) days from such date to repurchase up to that number of shares which
constitute the Unreleased Shares (as defined in Section 4) at the original
purchase price per share (the “Repurchase Price”).  The Repurchase Option shall be exercised by the Company by
delivering written notice to the Purchaser or the Purchaser’s executor (with a
copy to the Escrow Holder) AND, at the Company’s option, (i) by delivering
to the Purchaser or the Purchaser’s executor a check in the 

-1-

 

amount
of the aggregate Repurchase Price, or (ii) by cancelling an amount of the
Purchaser’s indebtedness to the Company equal to the aggregate Repurchase
Price, or (iii) by a combination of (i) and (ii) so that the combined
payment and cancellation of indebtedness equals the aggregate Repurchase Price.  Upon delivery of such notice and the payment
of the aggregate Repurchase Price, the Company shall become the legal and
beneficial owner of the Shares being repurchased and all rights and interests
therein or relating thereto, and the Company shall have the right to retain and
transfer to its own name the number of Shares being repurchased by the Company.

(h)           Whenever
the Company shall have the right to repurchase Shares hereunder, the Company
may designate and assign one or more employees, officers, directors or
stockholders of the Company or other persons or organizations to exercise all
or a part of the Company’s purchase rights under this Agreement and purchase
all or a part of such Shares.  If the
Fair Market Value of the Shares to be repurchased on the date of such
designation or assignment (the “Repurchase FMV”) exceeds the aggregate
Repurchase Price of such Shares, then each such designee or assignee shall pay
the Company cash equal to the difference between the Repurchase FMV and the
aggregate Repurchase Price of such Shares.

4.             Release
of Shares From Repurchase Option.

(i)            _______________________  percent (______%) of the Shares shall be
released from the Company’s Repurchase Option    [one year] after the Date of Grant and __________________
percent (______%) of the Shares [at the end of each month thereafter],
provided that the Purchaser does not cease to be a Service Provider prior to
the date of any such release.

(j)            Any
of the Shares that have not yet been released from the Repurchase Option are
referred to herein as “Unreleased Shares.”

(k)           The
Shares that have been released from the Repurchase Option shall be delivered to
the Purchaser at the Purchaser’s request (see Section 6).

5.             Restriction
on Transfer.  Except for the escrow
described in Section 6 or the transfer of the Shares to the Company or its
assignees contemplated by this Agreement, none of the Shares or any beneficial
interest therein shall be transferred, encumbered or otherwise disposed of in
any way until such Shares are released from the Company’s Repurchase Option in
accordance with the provisions of this Agreement, other than by will or the
laws of descent and distribution.

6.             Escrow
of Shares.

(l)            To
ensure the availability for delivery of the Purchaser’s Unreleased Shares upon
repurchase by the Company pursuant to the Repurchase Option, the Purchaser
shall, upon execution of this Agreement, deliver and deposit with an escrow
holder designated by the Company (the “Escrow Holder”) the share certificates
representing the Unreleased Shares, together with the stock assignment duly
endorsed in blank, attached hereto as Exhibit A-2.  The Unreleased Shares and 

-2-

 

stock
assignment shall be held by the Escrow Holder, pursuant to the Joint Escrow
Instructions of the Company and Purchaser attached hereto as Exhibit A-3,
until such time as the Company’s Repurchase Option expires.  As a further condition to the Company’s
obligations under this Agreement, the Company may require the spouse of Purchaser,
if any, to execute and deliver to the Company the Consent of Spouse attached
hereto as Exhibit A-4.

(m)          The
Escrow Holder shall not be liable for any act it may do or omit to do with
respect to holding the Unreleased Shares in escrow while acting in good faith
and in the exercise of its judgment.

(n)           If
the Company or any assignee exercises the Repurchase Option hereunder, the
Escrow Holder, upon receipt of written notice of such exercise from the
proposed transferee, shall take all steps necessary to accomplish such
transfer.

(o)           When
the Repurchase Option has been exercised or expires unexercised or a portion of
the Shares has been released from the Repurchase Option, upon request the
Escrow Holder shall promptly cause a new certificate to be issued for the
released Shares and shall deliver the certificate to the Company or the
Purchaser, as the case may be.

(p)           Subject
to the terms hereof, the Purchaser shall have all the rights of a stockholder
with respect to the Shares while they are held in escrow, including without
limitation, the right to vote the Shares and to receive any cash dividends
declared thereon.  If, from time to time
during the term of the Repurchase Option, there is (i) any stock dividend,
stock split or other change in the Shares, or (ii) any merger or sale of
all or substantially all of the assets or other acquisition of the Company, any
and all new, substituted or additional securities to which the Purchaser is
entitled by reason of the Purchaser’s ownership of the Shares shall be immediately
subject to this escrow, deposited with the Escrow Holder and included
thereafter as “Shares” for purposes of this Agreement and the Repurchase
Option.

7.             Legends.  The share certificate evidencing the Shares,
if any,  issued hereunder shall be endorsed
with the following legend (in addition to any legend required under applicable
state securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE
WITH THE SECRETARY OF THE COMPANY.

8.             Adjustment
for Stock Split.  All references to
the number of Shares and the purchase price of the Shares in this Agreement
shall be appropriately adjusted to reflect any stock split, stock dividend or
other change in the Shares which may be made by the Company after the date of
this Agreement.

-3-

 

9.             Tax
Consequences.  The Purchaser has
reviewed with the Purchaser’s own tax advisors the federal, state, local and
foreign tax consequences of this investment and the transactions contemplated
by this Agreement.  The Purchaser is
relying solely on such advisors and not on any statements or representations of
the Company or any of its agents.  The
Purchaser understands that the Purchaser (and not the Company) shall be
responsible for the Purchaser’s own tax liability that may arise as a result of
the transactions contemplated by this Agreement.  The Purchaser understands that Section 83 of the Internal
Revenue Code of 1986, as amended (the “Code”), taxes as ordinary
income the difference between the purchase price for the Shares and the
Fair Market Value of the Shares as of the date any restrictions on the Shares
lapse.  In this context, “restriction”
includes the right of the Company to buy back the Shares pursuant to the
Repurchase Option.  The Purchaser
understands that the Purchaser may elect to be taxed at the time the Shares are
purchased rather than when and as the Repurchase Option expires by filing an
election under Section 83(b) of the Code with the IRS within 30 days from
the date of purchase.  The form for
making this election is attached as Exhibit A-5 hereto.

THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER’S SOLE
RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER
SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS
REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER’S BEHALF.

10.           General
Provisions.

(q)           This
Agreement shall be governed by the internal substantive laws, but not the
choice of law rules of California.  This
Agreement, subject to the terms and conditions of the Plan and the Notice of
Grant, represents the entire agreement between the parties with respect to the
purchase of the Shares by the Purchaser. 
Subject to Section 15(c) of the Plan, in the event of a conflict
between the terms and conditions of the Plan and the terms and conditions of
this Agreement, the terms and conditions of the Plan shall prevail.  Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Agreement.

(r)            Any
notice, demand or request required or permitted to be given by either the
Company or the Purchaser pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered personally or deposited in the
U.S. mail, First Class with postage prepaid, and addressed to the parties at
the addresses of the parties set forth at the end of this Agreement or such
other address as a party may request by notifying the other in writing.

Any notice to the Escrow Holder shall be sent to the Company’s address
with a copy to the other party hereto.

(s)           The
rights of the Company under this Agreement 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.  The rights and obligations of
the Purchaser under this Agreement may only be assigned with the prior written
consent of the Company.

-4-

 

(t)            Either
party’s failure to enforce any provision of this Agreement shall not in any way
be construed as a waiver of any such provision, nor prevent that party from
thereafter enforcing any other provision of this Agreement.  The rights granted both parties hereunder
are cumulative and shall not constitute a waiver of either party’s right to
assert any other legal remedy available to it.

(u)           The
Purchaser agrees upon request to execute any further documents or instruments
necessary or desirable to carry out the purposes or intent of this Agreement.

(v)           PURCHASER
ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO SECTION 4 HEREOF
IS EARNED ONLY BY CONTINUING SERVICE AS A SERVICE PROVIDER AT THE WILL OF THE
COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED OR PURCHASING SHARES
HEREUNDER).  PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN
EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR
THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH
PURCHASER’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE PURCHASER’S RELATIONSHIP
AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE.

By Purchaser’s signature below, Purchaser represents that he or she is
familiar with the terms and provisions of the Plan, and hereby accepts this
Agreement subject to all of the terms and provisions thereof.  Purchaser has reviewed the Plan and this
Agreement in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Agreement and fully understands all provisions
of this Agreement.  Purchaser agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Administrator upon any questions arising under the Plan or this Agreement.  Purchaser further agrees to notify the
Company upon any change in the residence indicated in the Notice of Grant.

 

	
   

  	
  DATED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PURCHASER:

  	
   

  	
  ABGENIX, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Print Name

  	
   

  	
  Title

  	
   

  
							

-5-

 

EXHIBIT A-2

ASSIGNMENT
SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED I, __________________________, hereby sell, assign
and transfer unto                                                                                     
          
(__________) shares of the Common Stock of Abgenix, Inc. standing in my name of
the books of said corporation represented by Certificate No. _____
herewith and do hereby irrevocably constitute and appoint                                               to transfer the said stock on the books of
the within named corporation with full power of substitution in the premises.

This Stock Assignment may be used only in accordance with the
Restricted Stock Purchase Agreement (the “Agreement”)
between________________________ and the undersigned dated ______________, 19__.

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
  19

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  
						

INSTRUCTIONS: Please do not fill in any blanks other
than the signature line.  The purpose of
this assignment is to enable the Company to exercise the Repurchase Option, as
set forth in the Agreement, without requiring additional signatures on the part
of the Purchaser.

 

-1-

 

EXHIBIT A-3

JOINT ESCROW
INSTRUCTIONS

, 19  

Corporate Secretary

Abgenix, Inc.

7601 Dumbarton Circle

Fremont, CA 
94555

Dear:

As Escrow Agent for both Abgenix, Inc., a Delaware corporation (the
“Company”), and the undersigned purchaser of stock of the Company (the
“Purchaser”), you are hereby authorized and directed to hold the documents
delivered to you pursuant to the terms of that certain Restricted Stock Purchase
Agreement (“Agreement”) between the Company and the undersigned, in accordance
with the following instructions:

1.             In
the event the Company and/or any assignee of the Company (referred to
collectively as the “Company”) exercises the Company’s Repurchase Option set
forth in the Agreement, the Company shall give to Purchaser and you a written
notice specifying the number of shares of stock to be purchased, the purchase
price, and the time for a closing hereunder at the principal office of the
Company.  Purchaser 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 the 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 or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company’s Repurchase Option.

3.             Purchaser
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 defined in the Agreement.  Purchaser does hereby irrevocably constitute
and appoint you as Purchaser’s attorney-in-fact and agent for the term of this
escrow to execute with respect to such securities all documents necessary or
appropriate to make such securities negotiable and to complete any transaction
herein contemplated, including but not limited to the filing with any
applicable state blue sky authority of any required applications for consent
to, or notice of transfer of, the securities. 

-1-

 

Subject
to the provisions of this paragraph 3, Purchaser shall exercise all rights
and privileges of a stockholder of the Company while the stock is held by you.

4.             Upon
written request of the Purchaser, but no more than once per calendar year,
unless the Company’s Repurchase Option has been exercised, you shall deliver to
Purchaser a certificate or certificates representing so many shares of stock as
are not then subject to the Company’s Repurchase Option.  Within 90 days after Purchaser ceases to be
a Service Provider, you shall deliver to Purchaser a certificate or
certificates representing the aggregate number of shares held or issued
pursuant to the Agreement and not purchased by the Company or its assignees
pursuant to exercise of the Company’s Repurchase Option.

5.             If
at the time of termination of this escrow you should have in your possession
any documents, securities, or other property belonging to Purchaser, you shall
deliver all of the same to Purchaser and shall be discharged of all further
obligations hereunder.

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.  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 Purchaser 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, 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, authorities or
rights of the parties executing or delivering or purporting to execute or
deliver the Agreement or any documents or papers deposited or called for
hereunder.

10.           You
shall not be liable for the outlawing of any rights under the 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 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.

-2-

 

12.           Your
responsibilities as Escrow Agent hereunder shall terminate if you shall cease
to be an officer or agent of the Company or if you shall resign by written
notice to each party.  In the event of
any such termination, the Company shall appoint a successor Escrow Agent.

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 held by you
hereunder, you are authorized and directed to retain in your possession without
liability to anyone all or any part of said securities until such disputes
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 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 the United
States Post Office, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties thereunto entitled at the
following addresses or at such other addresses as a party may designate by ten
days’ advance written notice to each of the other parties hereto.

COMPANY:

Abgenix, Inc.

7601 Dumbarton Circle

Fremont, CA 
94555

PURCHASER: 

ESCROW AGENT:

Corporate Secretary

Abgenix, Inc.

7601 Dumbarton Circle

Fremont, CA 
94555

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
Agreement.

17.           This
instrument shall be binding upon and inure to the benefit of the parties
hereto, and their respective successors and permitted assigns.

-3-

 

18.           These
Joint Escrow Instructions shall be governed by, and construed and enforced in
accordance with, the internal substantive laws, but not the choice of law
rules, of the State of California.

Very truly yours,

ABGENIX, INC.

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ESCROW AGENT:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Corporate Secretary

  	
   

  
				

 

 

-4-

 

EXHIBIT
A-4

CONSENT OF SPOUSE

I, ____________________, spouse of ___________________, have read and
approve the foregoing Restricted Stock Purchase Agreement (the
“Agreement”).  In consideration of the
Company’s grant to my spouse of the right to purchase shares of Abgenix, Inc.,
as set forth in the Agreement, I hereby appoint my spouse as my
attorney-in-fact in respect to the exercise of any rights under the Agreement
and agree to be bound by the provisions of the Agreement insofar as I may have
any rights in said Agreement or any shares issued pursuant thereto under the
community property laws or similar laws relating to marital property in effect
in the state of our residence as of the date of the signing of the foregoing
Agreement.

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
  , 19__

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature of Spouse

  	
   

  	
   

  
						

-1-

EXHIBIT A-5

ELECTION UNDER
SECTION 83(b)

OF THE INTERNAL
REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b)
of the Internal Revenue Code of 1986, as amended, to include in taxpayer’s
gross income for the current taxable year the amount of any compensation
taxable to taxpayer in connection with his or her receipt of the property
described below:

1.             The name, address,
taxpayer identification number and taxable year of the undersigned are as
follows:

NAME:                                                                                          TAXPAYER:                         SPOUSE:

ADDRESS:

IDENTIFICATION NO.:                                                              TAXPAYER:                         SPOUSE:

TAXABLE YEAR:

2.             The property with
respect to which the election is made is described as follows:          
shares (the “Shares”) of the Common Stock of Abgenix, Inc. (the “Company”).

3.             The date on which
the property was transferred is:          
   , 19__.

4.             The property is
subject to the following restrictions:

The Shares may be repurchased by the Company, or its assignee, upon
certain events. This right lapses with regard to a portion of the Shares based
on the continued performance of services by the taxpayer over time.

5.             The fair market
value at the time of transfer, determined without regard to any restriction
other than a restriction which by its terms will never lapse, of such property
is:

$_______________.

6.             The amount (if any)
paid for such property is:

$_______________.

The undersigned has submitted a copy of this statement to the person
for whom the services were performed in connection with the undersigned’s
receipt of the above-described property. 
The 

-1-

 

transferee of such property is the person performing
the services in connection with the transfer of said property.

The undersigned understands that the foregoing
election may not be revoked except with the consent of the Commissioner.

	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
  , 19__

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Taxpayer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The undersigned spouse
  of taxpayer joins in this election.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
  , 19__

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Spouse of Taxpayer

  	
   

  	
   

  
						

-2-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00049-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00049-of-00352.parquet"}]]