Document:

2001 Stock Plan

 Exhibit 10.1 

 
  
 KALOBIOS PHARMACEUTICALS, INC. 
 2001 STOCK PLAN 
 ADOPTED
ON MAY 31, 2001 
 (AS AMENDED ON
JANUARY 26, 2005, JANUARY 9, 2007, JULY 17, 2007, OCTOBER 9, 2007, 
 SEPTEMBER 16, 2008 AND JANUARY 26, 2011) 
  

 
  
  

 TABLE OF CONTENTS 

 

					
	 	  	Page No.	 
	 SECTION 1. ESTABLISHMENT AND PURPOSE
	  	 	1	  
		
	 SECTION 2. ADMINISTRATION
	  	 	1	  
		
	 (a) Committees of the Board of Directors
	  	 	1	  
	 (b) Authority of the Board of Directors
	  	 	1	  
		
	 SECTION 3. ELIGIBILITY
	  	 	1	  
		
	 (a) General Rule
	  	 	1	  
	 (b) Ten-Percent Stockholders
	  	 	1	  
		
	 SECTION 4. STOCK SUBJECT TO PLAN
	  	 	2	  
		
	 (a) Basic Limitation
	  	 	2	  
	 (b) Additional Shares
	  	 	2	  
		
	 SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES
	  	 	2	  
		
	 (a) Stock Purchase Agreement
	  	 	2	  
	 (b) Duration of Offers and Nontransferability of Rights
	  	 	2	  
	 (c) Purchase Price
	  	 	2	  
	 (d) Withholding Taxes
	  	 	2	  
	 (e) Restrictions on Transfer of Shares
	  	 	3	  
		
	 SECTION 6. TERMS AND CONDITIONS OF OPTIONS
	  	 	3	  
		
	 (a) Stock Option Agreement
	  	 	3	  
	 (b) Number of Shares
	  	 	3	  
	 (c) Exercise Price
	  	 	3	  
	 (d) Exercisability
	  	 	3	  
	 (e) Accelerated Exercisability
	  	 	3	  
	 (f) Basic Term
	  	 	3	  
	 (g) Termination of Service (Except by Death)
	  	 	3	  
	 (h) Leaves of Absence
	  	 	4	  
	 (i) Death of Optionee
	  	 	4	  
	 (j) Restrictions on Transfer of Shares
	  	 	5	  
	 (k) Transferability of Options
	  	 	5	  
	 (l) Withholding Taxes
	  	 	5	  
	 (m) No Rights as a Stockholder
	  	 	5	  
	 (n) Modification, Extension and Assumption of options
	  	 	5	  

  
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	 SECTION 7. PAYMENT FOR SHARES
	  	 	5	  
		
	 (a) General Rule
	  	 	5	  
	 (b) Surrender of Stock
	  	 	5	  
	 (c) Services Rendered
	  	 	6	  
	 (d) Promissory Note
	  	 	6	  
	 (e) Exercise/Sale
	  	 	6	  
	 (f) Exercise/Pledge
	  	 	6	  
		
	 SECTION 8. ADJUSTMENT OF SHARES
	  	 	6	  
		
	 (a) General
	  	 	6	  
	 (b) Mergers and Consolidations
	  	 	6	  
	 (c) Reservation of Rights
	  	 	7	  
		
	 SECTION 9. SECURITIES LAW REQUIREMENTS
	  	 	7	  
		
	 SECTION 10. NO RETENTION RIGHTS
	  	 	7	  
		
	 SECTION 11. DURATION AND AMENDMENTS
	  	 	7	  
		
	 (a) Term of the Plan
	  	 	7	  
	 (b) Right to Amend or Terminate the Plan
	  	 	8	  
	 (c) Effect of Amendment or Termination
	  	 	8	  
		
	 SECTION 12. DEFINITIONS
	  	 	8	  

  
 ii 

 KALOBIOS PHARMACEUTICALS, INC.
2001 STOCK PLAN 
 SECTION 1. ESTABLISHMENT AND PURPOSE. 

The purpose of the Plan is to offer selected persons an opportunity to acquire a proprietary interest in the success of the Company, or to
increase such interest, by purchasing Shares of the Company’s Stock. The Plan provides both for the direct award or sale of Shares and for the grant of Options to purchase Shares. Options granted under the Plan may include Nonstatutory Options
as well as ISOs intended to qualify under Section 422 of the Code. 
 Capitalized terms are defined in Section 12.

 SECTION 2. ADMINISTRATION. 
 (a) Committees of the Board of Directors. The Plan may be administered by one or more Committees. Each Committee shall consist of two or more members of the Board of Directors who have been
appointed by the Board of Directors. Each Committee shall have such authority and be responsible for such functions as the Board of Directors has assigned to it. If no Committee has been appointed, the entire Board of Directors shall administer the
Plan. Any reference to the Board of Directors in the Plan shall be construed as a reference to the Committee (if any) to whom the Board of Directors has assigned a particular function. 

(b) Authority of the Board of Directors. Subject to the provisions of the Plan, the Board of Directors shall have full authority
and discretion to take any actions it deems necessary or advisable for the administration of the Plan. All decisions, interpretations and other actions of the Board of Directors shall be final and binding on all Purchasers, all Optionees and all
persons deriving their rights from a Purchaser or Optionee. 
 SECTION 3. ELIGIBILITY. 

(a) General Rule. Only Employees, Outside Directors and Consultants shall be eligible for the grant of Nonstatutory Options or the
direct award or sale of Shares. Only Employees shall be eligible for the grant of ISOs. 
 (b) Ten-Percent Stockholders.
A person who owns more than 10% of the total combined voting power of all classes of outstanding stock of the Company, its Parent or any of its Subsidiaries shall not be eligible for the grant of an ISO unless (i) the Exercise Price is at least
110% of the Fair Market Value of a Share on the date of grant and (ii) such ISO by its terms is not exercisable after the expiration of five years from the date of grant. For purposes of this Subsection (b), in determining stock ownership, the
attribution rules of Section 424(d) of the Code shall be applied. 

  
 1 

 SECTION 4. STOCK SUBJECT TO PLAN. 

(a) Basic Limitation. The aggregate number of Shares that may be issued under the Plan (upon exercise of
Options or other rights to acquire Shares) shall not exceed 12,138,3711 Shares, subject to adjustment pursuant to Section 8. All of these Shares may be issued upon the exercise of ISOs. The number of Shares that are subject to Options or other rights outstanding at any time
under the Plan shall not exceed the number of Shares that then remain available for issuance under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the
Plan. Shares offered under the Plan may be authorized but unissued Shares or treasury Shares. 
 (b) Additional Shares.
In the event that any outstanding Option or other right for any reason expires or is canceled or otherwise terminated, the Shares allocable to the unexercised portion of such Option or other right shall again be available for the purposes of the
Plan. In the event that Shares issued under the Plan are reacquired by the Company, such Shares shall again be available for the purposes of the Plan. 
 SECTION 5. TERMS AND CONDITIONS OF AWARDS OR SALES. 
 (a) Stock Purchase
Agreement. Each award or sale of Shares under the Plan (other than upon exercise of an Option) shall be evidenced by a Stock Purchase Agreement between the Purchaser and the Company. Such award or sale shall be subject to all applicable terms
and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of Directors deems appropriate for inclusion in a Stock Purchase Agreement. The provisions of the various
Stock Purchase Agreements entered into under the Plan need not be identical. 
 (b) Duration of Offers and Nontransferability
of Rights. Any right to acquire Shares under the Plan (other than an Option) shall automatically expire if not exercised by the Purchaser within 30 days after the grant of such right was communicated to the Purchaser by the Company. Such right
shall not be transferable and shall be exercisable only by the Purchaser to whom such right was granted. 
 (c) Purchase
Price. The Board of Directors shall determine the Purchase Price of Shares to be offered under the Plan at its sole discretion. The Purchase Price shall be payable in a form described in Section 7. 

(d) Withholding Taxes. As a condition to the purchase of Shares, the Purchaser shall make such arrangements as the Board of
Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such purchase. 

	

	 	

  

	1	 Reflects the 0.3333-for-1 reverse stock split on May 13, 2004, the 2,371,751-Share increase approved by the Board of Directors on January 26, 2005, the 1,750,000-Share increase approved by the
Board of Directors on January 9, 2007, the 1,500,000-Share increase approved by the Board of Directors on July 17, 2007, the 2,800,000-Share increase approved by the Board of Directors on September 16, 2008 and the 3,250,000-Share
increase approved by the Board of Directors on January 26, 2011. 

  
 2 

 (e) Restrictions on Transfer of Shares. Any Shares awarded or sold under the Plan
shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Purchase
Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. 
 SECTION 6. TERMS AND CONDITIONS
OF OPTIONS. 
 (a) Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option
Agreement between the Optionee and the Company. The Option shall be subject to all applicable terms and conditions of the Plan and may be subject to any other terms and conditions which are not inconsistent with the Plan and which the Board of
Directors deems appropriate for inclusion in a Stock Option Agreement. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. 
 (b) Number of Shares. Each Stock Option Agreement shall specify the number of Shares that are subject to the Option and shall provide for the adjustment of such number in accordance with
Section 8. The Stock Option Agreement shall also specify whether the Option is an ISO or a Nonstatutory Option. 
 (c)
Exercise Price. Each Stock Option Agreement shall specify the Exercise Price. The Exercise Price of any Option shall not be less than 100% of the Fair Market Value of a Share on the date of grant, and in the case of an ISO a higher percentage
may be required by Section 3(b). Subject to the preceding sentence, the Exercise Price under any Option shall be determined by the Board of Directors at its sole discretion. The Exercise Price shall be payable in a form described in Section 7.

 (d) Exercisability. Each Stock Option Agreement shall specify the date when all or any installment of the Option is to
become exercisable. The Board of Directors shall determine the exercisability provisions of any Stock Option Agreement at its sole discretion. 
 (e) Accelerated Exercisability. Unless the applicable Stock Option Agreement provides otherwise, all of an Optionee’s Options shall become exercisable in full if (i) the Company is
subject to a Change in Control before the Optionee’s Service terminates, (ii) such Options do not remain outstanding, (iii) such Options are not assumed by the surviving corporation or its parent and (iv) the surviving corporation or
its parent does not substitute options with substantially the same terms for such Options. 
 (f) Basic Term. The Stock
Option Agreement shall specify the term of the Option. The term shall not exceed 10 years from the date of grant, and in the case of an ISO a shorter term may be required by Section 3(b). Subject to the preceding sentence, the Board of
Directors at its sole discretion shall determine when an Option is to expire. 
 (g) Termination of Service (Except by
Death). If an Optionee’s Service terminates for any reason other than the Optionee’s death, then the Optionee’s Options shall expire on the earliest of the following occasions: 

  
 3 

 (i) The expiration date determined pursuant to Subsection (f) above;

 (ii) The date three months after the termination of the Optionee’s Service for any reason other than
Disability, or such later date as the Board of Directors may determine; or 
 (iii) The date six months after the
termination of the Optionee’s Service by reason of Disability, or such later date as the Board of Directors may determine. 
 The Optionee
may exercise all or part of the Optionee’s Options at any time before the expiration of such Options under the preceding sentence, but only to the extent that such Options had become exercisable before the Optionee’s Service terminated (or
became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination). The balance of such Options shall lapse when the Optionee’s
Service terminates. In the event that the Optionee dies after the termination of the Optionee’s Service but before the expiration of the Optionee’s Options, all or part of such Options may be exercised (prior to expiration) by the
executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had become exercisable
before the Optionee’s Service terminated (or became exercisable as a result of the termination) and the underlying Shares had vested before the Optionee’s Service terminated (or vested as a result of the termination). 

(h) Leaves of Absence. For purposes of Subsection (g) above, Service shall be deemed to continue while the Optionee is on a
bona fide leave of absence, if such leave was approved by the Company in writing and if continued crediting of Service for this purpose is expressly required by the terms of such leave or by applicable law (as determined by the Company). 

(i) Death of Optionee. If an Optionee dies while the Optionee is in Service, then the Optionee’s Options shall expire on the
earlier of the following dates: 
 (i) The expiration date determined pursuant to Subsection (f) above; or

 (ii) The date 12 months after the Optionee’s death, or such later date as the Board of Directors may
determine. 
 All or part of the Optionee’s Options may be exercised at any time before the expiration of such Options under the preceding
sentence by the executors or administrators of the Optionee’s estate or by any person who has acquired such Options directly from the Optionee by beneficiary designation, bequest or inheritance, but only to the extent that such Options had
become exercisable before the Optionee’s death (or became exercisable as a result of the death) and the underlying Shares had vested before the Optionee’s death (or vested as a result of the Optionee’s death). The balance of such
Options shall lapse when the Optionee dies. 

  
 4 

 (j) Restrictions on Transfer of Shares. Any Shares issued upon exercise of an Option
shall be subject to such special forfeiture conditions, rights of repurchase, rights of first refusal and other transfer restrictions as the Board of Directors may determine. Such restrictions shall be set forth in the applicable Stock Option
Agreement and shall apply in addition to any restrictions that may apply to holders of Shares generally. 
 (k)
Transferability of Options. An Option shall be transferable by the Optionee only by (i) a beneficiary designation, (ii) a will or (iii) the laws of descent and distribution, except as provided in the next sentence. If the
applicable Stock Option Agreement so provides, a Nonstatutory Option shall also be transferable by gift or domestic relations order to a Family Member of the Optionee. An ISO may be exercised during the lifetime of the Optionee only by the Optionee
or by the Optionee’s guardian or legal representative. 
 (l) Withholding Taxes. As a condition to the exercise of
an Option, the Optionee shall make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with such exercise. The Optionee shall
also make such arrangements as the Board of Directors may require for the satisfaction of any federal, state, local or foreign withholding tax obligations that may arise in connection with the disposition of Shares acquired by exercising an Option.

 (m) No Rights as a Stockholder. An Optionee, or a transferee of an Optionee, shall have no rights as a stockholder
with respect to any Shares covered by the Optionee’s Option until such person becomes entitled to receive such Shares by filing a notice of exercise and paying the Exercise Price pursuant to the terms of such Option. 

(n) Modification, Extension and Assumption of Options. Within the limitations of the Plan, the Board of Directors may modify,
extend or assume outstanding Options or may accept the cancellation of outstanding Options (whether granted by the Company or another issuer) in return for the grant of new Options for the same or a different number of Shares and at the same or a
different Exercise Price. The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, impair the Optionee’s rights or increase the Optionee’s obligations under such Option. 

SECTION 7. PAYMENT FOR SHARES. 
 (a) General Rule. The entire Purchase Price or Exercise Price of Shares issued under the Plan shall be payable in cash or cash equivalents at the time when such Shares are purchased, except as
otherwise provided in this Section 7. 
 (b) Surrender of Stock. To the extent that a Stock Option Agreement so provides,
all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, Shares that are already owned by the Optionee. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at
their Fair Market Value on the date when the Option is exercised. The Optionee shall not surrender, or attest to the ownership of, Shares in payment of the Exercise Price if such action would cause the Company to recognize compensation expense (or
additional compensation expense) with respect to the Option for financial reporting purposes. 

  
 5 

 (c) Services Rendered. At the discretion of the Board of Directors, Shares may be
awarded under the Plan in consideration of services rendered to the Company, a Parent or a Subsidiary prior to the award. 
 (d)
Promissory Note. To the extent that a Stock Option Agreement or Stock Purchase Agreement so provides, all or a portion of the Exercise Price or Purchase Price (as the case may be) of Shares issued under the Plan may be paid with a
full-recourse promissory note. However, the par value of the Shares, if newly issued, shall be paid in cash or cash equivalents. The Shares shall be pledged as security for payment of the principal amount of the promissory note and interest thereon.
The interest rate payable under the terms of the promissory note shall not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the Code. Subject to the foregoing, the Board of Directors (at its sole
discretion) shall specify the term, interest rate, amortization requirements (if any) and other provisions of such note. 
 (e)
Exercise/Sale. To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities
broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. 

(f) Exercise/Pledge. To the extent that a Stock Option Agreement so provides, and if Stock is publicly traded, payment may be made
all or in part by the delivery (on a form prescribed by the Company) of an irrevocable direction to pledge Shares to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part of the loan proceeds to
the Company in payment of all or part of the Exercise Price and any withholding taxes. 
 SECTION 8. ADJUSTMENT OF SHARES. 

(a) General. In the event of a subdivision of the outstanding Stock, a declaration of a dividend payable in Shares, a declaration
of an extraordinary dividend payable in a form other than Shares in an amount that has a material effect on the Fair Market Value of the Stock, a combination or consolidation of the outstanding Stock into a lesser number of Shares, a
recapitalization, a spin-off, a reclassification or a similar occurrence, the Board of Directors shall make appropriate adjustments in one or more of (i) the number of Shares available for future grants under Section 4, (ii) the
number of Shares covered by each outstanding Option or (iii) the Exercise Price under each outstanding Option. 
 (b)
Mergers and Consolidations. In the event that the Company is a party to a merger or consolidation, outstanding Options shall be subject to the agreement of merger or consolidation. Such agreement shall provide for: 

(i) The continuation of such outstanding Options by the Company (if the Company is the surviving corporation); 

  
 6 

 (ii) The assumption of the Plan and such outstanding Options by the
surviving corporation or its parent; 
 (iii) The substitution by the surviving corporation or its parent of
options with substantially the same terms for such outstanding Options; 
 (iv) The full exercisability of such
outstanding Options and full vesting of the Shares subject to such Options, followed by the cancellation of such Options; or 
 (v) The settlement of the full value of such outstanding Options (whether or not then exercisable) in cash or cash equivalents, followed by the cancellation of such Options. 

(c) Reservation of Rights. Except as provided in this Section 8, an Optionee or Purchaser shall have no rights by reason of
(i) any subdivision or consolidation of shares of stock of any class, (ii) the payment of any dividend or (iii) any other increase or decrease in the number of shares of stock of any class. Any issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or Exercise Price of Shares subject to an Option. The grant of an Option
pursuant to the Plan shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets. 
 SECTION 9. SECURITIES LAW REQUIREMENTS. 

Shares shall not be issued under the Plan unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable
requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market
on which the Company’s securities may then be traded. 
 SECTION 10. NO RETENTION RIGHTS. 

Nothing in the Plan or in any right or Option granted under the Plan shall confer upon the Purchaser or Optionee any right to continue in
Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary employing or retaining the Purchaser or Optionee) or of the Purchaser or Optionee, which rights are
hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause. 
 SECTION 11.
DURATION AND AMENDMENTS. 
 (a) Term of the Plan. The Plan, as set forth herein, shall become effective on the date of
its adoption by the Board of Directors, subject to the approval of the Company’s 

  
 7 

 stockholders. If the stockholders fail to approve the Plan (or the most recent increase in the number of
Shares reserved under Section 4) within 12 months after its adoption by the Board of Directors, then any grants of Options or sales or awards of Shares that have already occurred under the Plan (or in reliance on such increase) shall be
rescinded, and no additional grants, sales or awards shall be made thereafter under the Plan. The Plan shall terminate automatically 10 years after the later of (i) its adoption by the Board of Directors or (ii) the most recent increase in
the number of Shares reserved under Section 4 that was approved by the Company’s stockholders. The Plan may be terminated on any earlier date pursuant to Subsection (b) below. 

(b) Right to Amend or Terminate the Plan. The Board of Directors may amend, suspend or terminate the Plan at any time and for any
reason; provided, however, that any amendment of the Plan which increases the number of Shares available for issuance under the Plan (except as provided in Section 8), or which materially changes the class of persons who are eligible for the
grant of ISOs, shall be subject to the approval of the Company’s stockholders. Stockholder approval shall not be required for any other amendment of the Plan. 
 (c) Effect of Amendment or Termination. No Shares shall be issued or sold under the Plan after the termination thereof, except upon exercise of an Option granted prior to such termination. The
termination of the Plan, or any amendment thereof, shall not affect any Share previously issued or any Option previously granted under the Plan. 
 SECTION 12. DEFINITIONS. 
 (a) “Board of Directors” shall
mean the Board of Directors of the Company, as constituted from time to time. 
 (b) “Change in Control” shall
mean: 
 (i) The consummation of a merger or consolidation of the Company with or into another entity or any
other corporate reorganization, if persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the
voting power of the outstanding securities of each of (A) the continuing or surviving entity and (B) any direct or indirect parent corporation of such continuing or surviving entity; or 

(ii) The sale, transfer or other disposition of all or substantially all of the Company’s assets. 

(c) A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation
or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction 

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

  
 8 

 (e) “Committee” shall mean a committee of the Board of Directors, as
described in Section 2(a). 
 (f) “Company” shall mean KaloBios Pharmaceuticals, Inc., a Delaware corporation.

 (g) “Consultant” shall mean a person who performs bona fide services for the Company, a Parent or a
Subsidiary as a consultant or advisor, excluding Employees and Outside Directors. 
 (h) “Disability” shall
mean that the Optionee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. 
 (i) “Employee” shall mean any individual who is a common-law employee of the Company, a Parent or a Subsidiary. 
 (j) “Exercise Price” shall mean the amount for which one Share may be purchased upon exercise of an Option, as specified by the Board of Directors in the applicable Stock Option
Agreement. 
 (k) “Fair Market Value” shall mean the fair market value of a Share, as determined by the Board
of Directors in accordance with applicable law. Such determination shall be conclusive and binding on all persons. 
 (l)
“Family Member” shall mean (i) any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law, including adoptive relationships, (ii) any person sharing the Optionee’s household (other than a tenant or employee), (iii) a trust in which persons described in Clause (i) or (ii) have more than 50% of the
beneficial interest, (iv) a foundation in which persons described in Clause (i) or (ii) or the Optionee control the management of assets and (v) any other entity in which persons described in Clause (i) or (ii) or the
Optionee own more than 50% of the voting interests. 
 (m) “ISO” shall mean an employee incentive stock option
described in Section 422(b) of the Code. 
 (n) “Nonstatutory Option” shall mean a stock option not
described in Sections 422(b) or 423 (b) of the Code. 
 (o) “Option” shall mean an ISO or Nonstatutory
Option granted under the Plan and entitling the holder to purchase Shares. 
 (p) “Optionee” shall mean a
person who holds an Option. 
 (q) “Outside Director” shall mean a member of the Board of Directors who is not
an Employee. 

  
 9 

 (r) “Parent” shall mean any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date. 
 (s) “Plan” shall mean this KaloBios Pharmaceuticals, Inc. 2001 Stock Plan. 
 (t) “Purchase Price” shall mean the consideration for which one Share may be acquired under the Plan (other than upon exercise of an Option), as specified by the Board of Directors.

 (u) “Purchaser” shall mean a person to whom the Board of Directors has offered the right to acquire Shares
under the Plan (other than upon exercise of an Option). 
 (v) “Service” shall mean service as an Employee,
Outside Director or Consultant. 
 (w) “Share” shall mean one share of Stock, as adjusted in accordance with
Section 8 (if applicable). 
 (x) “Stock” shall mean the Common Stock of the Company, with a par value of
$0.001 per Share. 
 (y) “Stock Option Agreement” shall mean the agreement between the Company and an Optionee
that contains the terms, conditions and restrictions pertaining to the Optionee’s Option. 
 (z) “Stock Purchase
Agreement” shall mean the agreement between the Company and a Purchaser who acquires Shares under the Plan that contains the terms, conditions and restrictions pertaining to the acquisition of such Shares. 

(aa) “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning
with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A
corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. 

  
 102012 Employee Stock Purchase Plan

 Exhibit 10.9 
                                  
                           KALOBIOS PHARMACEUTICALS,
INC. 
 2012 EMPLOYEE STOCK PURCHASE PLAN

 (AS ADOPTED TO BE EFFECTIVE
ON THE IPO DATE) 

 KALOBIOS PHARMACEUTICALS, INC.

 2012 EMPLOYEE STOCK PURCHASE PLAN 

 

	SECTION 1.	PURPOSE OF THE PLAN. 

 The Board adopted the Plan effective as of the IPO Date. The purpose of the Plan is to provide Eligible Employees with an opportunity to increase their proprietary interest in the success of the Company
by purchasing Stock from the Company on favorable terms and to pay for such purchases through payroll deductions. 
  

	SECTION 2.	ADMINISTRATION OF THE PLAN. 

 (a) Committee Composition. The Committee shall administer the Plan. The Committee shall consist exclusively of one or more members of the Board, who shall be appointed by the Board.

 (b) Committee Responsibilities. The Committee shall interpret the Plan and make all other policy decisions
relating to the operation of the Plan. The Committee may adopt such rules, guidelines and forms as it deems appropriate to implement the Plan. The Committee’s determinations under the Plan shall be final and binding on all persons. 

 

	SECTION 3.	 STOCK OFFERED UNDER THE PLAN.1 

 (a) Authorized Shares. The
number of shares of Stock available for purchase under the Plan shall be 600,000 shares of the Company’s Common Stock (subject to adjustment pursuant to Subsection (b) below). Shares of Stock issued pursuant to the Plan may be authorized
but unissued shares or treasury shares. 
 (b) Anti-Dilution Adjustments. In the event that any dividend or other
distribution (whether in the form of cash, Stock or other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Stock or
other securities of the Company, or other similar change in the corporate structure of the Company affecting the Stock and effected without receipt or payment of consideration by the Company occurs, then in order to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available under the Plan, there will be a proportionate adjustment of the number and class of Stock that may be delivered under the Plan, the Purchase Price per share and the number of shares
of Stock covered by each option under the Plan which has not yet been exercised, and the numerical limit of Section 3(a) (but not Section 9(c)). 
 (c) Reorganizations. Any other provision of the Plan notwithstanding, in the event of a Corporate Reorganization, the Plan may be continued or assumed by the surviving corporation or its
parent corporation. If such acquirer refuses to continue or assume the Plan, 
  

	1 	 All Share numbers in the Plan are subject to adjustment as a result of any stock split effective on the IPO Date.

 
then, immediately prior to the effective time of the Corporate Reorganization, any Offering Period then in progress shall terminate, and, a new Purchase Date for each such Offering Period will be
set, immediately prior to the effective time of the Corporate Reorganization. In the event a new Purchase Date is set under this Section 3(c), Participants will be given notice of the new Purchase Date. The Plan shall in no event be construed
to restrict in any way the Company’s right to undertake a dissolution, liquidation, merger, consolidation or other reorganization. 
  

	SECTION 4.	ENROLLMENT AND PARTICIPATION. 

 (a) Offering Periods and Purchase Periods. 
 (i)
Base Offering Periods. The Committee may establish Offering Periods of such frequency and duration as it may from time to time determine as appropriate (the “Base Offering Periods”); provided that a Base Offering
Period shall in no event be longer than 27 months (or such other period as may be imposed under applicable tax law). The Base Offering Periods are intended to qualify under Code Section 423. Unless changed by the Committee, the Plan shall
operate such that two Base Offering Periods, each of six months’ duration and each including a single six-month Purchase Period, will commence on May 1 and November 1 of each year. The Committee may determine that the first Base
Offering Period applicable to the Eligible Employees of a new Participating Company shall commence on any date specified by the Committee. The Committee shall determine when the first Base Offering Period will commence. 

(ii) Additional Offering Periods. At the discretion of the Committee, additional Offering Periods may be conducted
under the Plan (the “Additional Offering Periods”). Such Additional Offering Periods may, but need not, qualify under Code Section 423. The Committee shall determine the commencement and duration of each Additional
Offering Period, and Additional Offering Periods may be consecutive or overlapping. The other terms and conditions of each Additional Offering Period shall be those set forth in this Plan document, with such changes or additional features as the
Committee determines necessary to comply with local law. 
 (iii) Separate Offerings. Each Base Offering
Period and Additional Offering Period conducted under the Plan is intended to constitute a separate “offering” for purposes of Code Section 423. 
 (iv) Equal Rights and Privileges. To the extent an Offering Period is intended to qualify under Code Section 423, all participants in such Offering Period shall have the same rights and
privileges with respect to their participation in such Offering Period in accordance with Code Section 423 and the regulations thereunder except for differences that may be mandated by local law and are consistent with the requirements of Code
Section 423(b)(5). 
 (b) Enrollment. In the case of any individual who qualifies as an Eligible Employee on
the first day of any Offering Period, he or she may elect to become a Participant on such day by filing the prescribed enrollment form with the Company. The enrollment form shall be filed at the prescribed location at least 10 business days (or such
other period as the Committee or its designee may designate) prior to such day. 

  
 2 

 (c) Duration of Participation. Once enrolled in the Plan, a Participant shall
continue to participate in the Plan until he or she: 
 (i) Reaches the end of the Offering Period or Purchase
Period, as applicable, in which his or her employee contributions were discontinued under Section 5(c) or 9(b); 
 (ii) Is deemed to withdraw from the Plan under Subsection (b) above; 
 (iii) Withdraws from the Plan under Section 6(a); or 
 (iv)
Ceases to be an Eligible Employee. 
 A Participant whose employee contributions were discontinued automatically under Section 9(b) shall
automatically resume participation at the beginning of the earliest Offering Period ending in a later calendar year, if he or she then is an Eligible Employee. In all other cases, a former Participant may again become a Participant, if he or she
then is an Eligible Employee, by following the procedure described in Subsection (c) above. 
  

	SECTION 5.	EMPLOYEE CONTRIBUTIONS. 

 (a) Commencement of Payroll Deductions. A Participant may purchase shares of Stock under the Plan solely by means of payroll deductions. Payroll deductions shall commence as soon as
reasonably practicable after the Company has received the prescribed enrollment form. 
 (b) Amount of Payroll
Deductions. An Eligible Employee shall designate on the prescribed enrollment form the portion of his or her Compensation that he or she elects to have withheld for the purchase of Stock. Such portion shall be a whole percentage of the Eligible
Employee’s Compensation, but not less than 1% nor more than 15%. 
 (c) Reducing Withholding Rate or
Discontinuing Payroll Deductions. If a Participant wishes to reduce his or her rate of payroll withholding, such Participant may do so by filing a new enrollment form with the Company at the prescribed location at any time. The new withholding
rate shall be effective as soon as reasonably practicable after the Company has received such form. The new withholding rate may be 0% or any whole percentage of the Participant’s Compensation, but not more than his or her old withholding rate.
No Participant shall make more than two elections under this Subsection (c) during any Purchase Period. (In addition, employee contributions may be discontinued automatically pursuant to Section 9(b).) 

(d) Increasing Withholding Rate. If a Participant wishes to increase his or her rate of payroll withholding, such
Participant may do so by filing a new enrollment form with the Company at the prescribed location at any time. The new withholding rate may be effective on the first day of the next-upcoming Offering Period in which the Participant participates,

  
 3 

 
provided that the Participant has filed the enrollment form with the Company at the prescribed location at least 10 business days (or such other period as the Committee or its designee may
designate) prior to such day. The new withholding rate may be any whole percentage of the Participant’s Compensation, but not less than 1% nor more than 15%. An increase in a Participant’s rate of payroll withholding may not take effect
during an Offering Period. 
  

	SECTION 6.	WITHDRAWAL FROM THE PLAN. 

 (a) Withdrawal. A Participant may elect to withdraw from the Plan (or, if applicable, from an Offering Period) by filing the prescribed form with the Company at the prescribed location at
any time before a Purchase Date. As soon as reasonably practicable thereafter, payroll deductions shall cease and the entire amount credited to the Participant’s Plan Account with respect to such Offering Period shall be refunded to him or her
in cash, without interest. No partial withdrawals from an Offering Period shall be permitted. 
 (b) Re-Enrollment
After Withdrawal. A former Participant who has withdrawn from the Plan shall not be a Participant until he or she re-enrolls in the Plan under Section 4(c). Re-enrollment may be effective only at the commencement of an Offering Period.

  

	SECTION 7.	CHANGE IN EMPLOYMENT STATUS. 

 (a) Termination of Employment. Termination of employment as an Eligible Employee for any reason, including death, shall be treated as an automatic withdrawal from the Plan under
Section 6(a). (A transfer from one Participating Company to another shall not be treated as a termination of employment provided that each Participating Company is then participating in the same Offering Period.) 

(b) Leave of Absence. For purposes of the Plan, employment shall not be deemed to terminate when the Participant goes on a
military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing. Employment, however, shall be deemed to terminate on the first day following three months after the Participant goes on a
leave, unless a contract or statute guarantees his or her right to return to work. Employment shall be deemed to terminate in any event when the approved leave ends, unless the Participant immediately returns to work. 

(c) Death. In the event of the Participant’s death, the amount credited to his or her Plan Account shall be paid to a
beneficiary designated by him or her for this purpose on the prescribed form or, if none, to the Participant’s estate. Such form shall be valid only if it was filed with the Company at the prescribed location before the Participant’s
death. 
  

	SECTION 8.	PLAN ACCOUNTS AND PURCHASE OF SHARES. 

 (a) Plan Accounts. The Company shall maintain a Plan Account on its books in the name of each Participant. Whenever an amount is deducted from the Participant’s Compensation under the
Plan, such amount shall be credited to the Participant’s Plan Account. Amounts credited to Plan Accounts shall not be trust funds and may be commingled with the Company’s general assets and applied to general corporate purposes. No
interest shall be credited to Plan Accounts. 

  
 4 

 (b) Purchase Price. The Purchase Price for each share of Stock
purchased on a Purchase Date shall be the lower of: 
 (i) 85% of the Fair Market Value of such share on the
first day of such Offering Period; or 
 (ii) 85% of the Fair Market Value of such share on the Purchase Date.

 (c) Number of Shares Purchased. On each Purchase Date, each Participant shall be deemed to have elected to
purchase the number of shares of Stock calculated in accordance with this Subsection (c), unless the Participant has previously elected to withdraw from the Offering Period in accordance with Section 6(a). The amount then in the
Participant’s Plan Account shall be divided by the Purchase Price, and the number of shares that results shall be purchased from the Company with the funds in the Participant’s Plan Account. The foregoing number of shares of Stock
purchasable by a Participant are subject to the limitations set forth in Section 9. The Committee may determine with respect to all Participants that any fractional share, as calculated under this Subsection (c), shall be (i) rounded
down to the next lower whole share or (ii) credited as a fractional share. 
 (d) Available Shares
Insufficient. In the event that the aggregate number of shares that all Participants elect to purchase with respect to a particular Purchase Period exceeds (i) the number of shares of Stock that were available under Section 3 above for
sale under the Plan on the first day of the applicable Offering Period, or (ii) the number of shares that were available under Section 3 above for sale under the Plan on the applicable Purchase Date, then the number of shares to which each
Participant is entitled shall be determined by multiplying the number of shares available for issuance by a fraction. The numerator of such fraction is the number of shares that such Participant has elected to purchase, and the denominator of such
fraction is the number of shares that all Participants have elected to purchase. The Company may make a pro rata allocation of the shares available on the first day of an applicable Offering Period pursuant to the preceding sentence, notwithstanding
any authorization of additional shares for issuance under the Plan by the Company’s stockholders subsequent to such date. In the event of a pro-rata allocation under this Section (d), the Committee may determine in its discretion to continue
all Offering Periods then in effect or terminate all Offering Periods then in effect pursuant to Section 14. 

(e) Issuance of Stock. The shares of Stock purchased by a Participant under the Plan may be registered in the name
of such Participant, or jointly in the name of such Participant and his or her spouse as joint tenants with the right of survivorship or as community property (with or without the right of survivorship). The Company may permit or require that shares
be deposited directly with a broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of share transfer. The Company may require that shares be retained with such broker or
agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such shares. (The two preceding sentences shall apply whether or not the Participant is required to pay income tax in the
United States.) 

  
 5 

 (f) Tax Withholding. To the extent required by applicable federal, state,
local or foreign law, a Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to issue any shares of Stock
under the Plan until such obligations, if any, are satisfied. 
 (g) Unused Cash Balances. Subject to the final
sentence of Section 8(c), an amount remaining in the Participant’s Plan Account that represents the Purchase Price for any fractional share shall be carried over in the Participant’s Plan Account to the next Purchase Period. Any
amount remaining in the Participant’s Plan Account that represents the Purchase Price for whole shares that could not be purchased by reason of Subsections (c) or (d) above or Section 9(b) shall be refunded to the Participant in
cash, without interest. 
 (h) Stockholder Approval. Any other provision of the Plan notwithstanding, no shares of
Stock shall be purchased under the Plan unless and until the Company’s stockholders have approved the adoption of the Plan. 
  

	SECTION 9.	PLAN LIMITATIONS. 

(a) Five Percent Limit. Any other provision of the Plan notwithstanding, no Participant shall be granted a right to purchase
Stock under the Plan if such Participant, immediately after his or her election to purchase such Stock, would own stock possessing more than 5% of the total combined voting power or value of all classes of stock of the Company or any parent or
Subsidiary of the Company, determined in accordance with applicable tax law. 
 (b) Dollar Limit. Any other
provision of the Plan notwithstanding, no Participant shall purchase Stock with a Fair Market Value in excess of the following limit: 
 (i) In the case of Stock purchased during an Offering Period that commenced in the current calendar year, the limit shall be equal to (A) $25,000 minus (B) the Fair Market Value of the Stock
that the Participant previously purchased under the Plan in the current calendar year. 
 (ii) In the case of
Stock purchased during an Offering Period that commenced in the immediately preceding calendar year, the limit shall be equal to (A) $50,000 minus (B) the Fair Market Value of the Stock that the Participant previously purchased under the
Plan in the current calendar year and in the immediately preceding calendar year. 
 (iii) In the case of Stock
purchased during an Offering Period that commenced in the second calendar year before the current calendar year, the limit shall be equal to (A) $75,000 minus (B) the Fair Market Value of the Stock that the Participant previously purchased
under the Plan in the current calendar year and in the immediately preceding two calendar years. 

  
 6 

 For all purposes under this Subsection (b), (A) the Fair Market Value of Stock shall be determined
as of the beginning of the Offering Period in which such Stock is purchased; and (B) this Plan shall be aggregated with any other employee stock purchase plans of the Company (or any parent or Subsidiary of the Company) described in Code
Section 423. If a Participant is precluded by this Subsection (b) from purchasing additional Stock under the Plan, then his or her employee contributions shall automatically be discontinued and shall automatically resume at the beginning
of the next Offering Period with a scheduled Purchase Date in the next calendar year, provided that he or she is an Eligible Employee at the beginning of such Offering Period. 
 (c) Purchase Period Share Purchase Limit. Any other provision of the Plan notwithstanding, no Participant shall purchase more than 3,000 shares of Stock with respect to any Purchase Period;
provided that the Committee may, for future Offering Periods, increase or decrease in its absolute discretion, the maximum number of shares of Stock that a Participant may purchase during each Purchase Period. 

 

	SECTION 10.	RIGHTS NOT TRANSFERABLE. 

 The rights of any Participant under the Plan, or any Participant’s interest in any Stock or moneys to which he or she may be entitled under the Plan, shall not be transferable by voluntary or
involuntary assignment or by operation of law, or in any other manner other than by beneficiary designation or the laws of descent and distribution. If a Participant in any manner attempts to transfer, assign or otherwise encumber his or her rights
or interest under the Plan, other than by beneficiary designation or the laws of descent and distribution, then such act shall be treated as an election by the Participant to withdraw from the Plan under Section 6(a). 

 

	SECTION 11.	NO RIGHTS AS AN EMPLOYEE. 

 Nothing in the Plan or in any right granted under the Plan shall confer upon the Participant any right to continue in the employ of a Participating Company for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Participating Companies or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her employment at any time and for any reason, with or without cause.

  

	SECTION 12.	NO RIGHTS AS A STOCKHOLDER. 

 A Participant shall have no rights as a stockholder with respect to any shares of Stock that he or she may have a right to purchase under the Plan until such shares have been purchased on the applicable
Purchase Date. 
  

	SECTION 13.	SECURITIES LAW REQUIREMENTS. 

 Shares of Stock shall not be issued, and the Company shall have no liability for failure to issue shares of Stock, under the Plan unless the issuance and delivery of such shares comply with (or are exempt
from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or
other securities market on which the Company’s securities may then be traded. 

  
 7 

	SECTION 14.	AMENDMENT OR DISCONTINUANCE. 

 (a) General Rule. The Committee, in its sole discretion, may amend, suspend, or terminate the Plan, or any part thereof, at any time and for any reason. If the Plan is terminated, the
Committee, in its discretion, may elect to terminate all outstanding Offering Periods either immediately or upon completion of the purchase of shares of Stock on the next Purchase Date, or may elect to permit Offering Periods to expire in accordance
with their terms (and subject to any adjustment pursuant to Section 3(b) or (c)). If the Offering Periods are terminated prior to expiration, all amounts then credited to Participants’ accounts which have not been used to purchase shares
of Common Stock will be returned to the Participants (without interest thereon, except as otherwise required under local laws) as soon as administratively practicable. 
 (b) Committee’s Discretion. Without stockholder consent and without limiting Section 14(a), the Committee will be entitled to change the Offering Periods, limit the frequency
and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a
Participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of Stock for each Participant properly correspond with amounts withheld from the Participant’s Compensation, and establish such other limitations or procedures as it determines in its sole discretion advisable which
are consistent with the Plan. 
 (c) Accounting Consideration. In the event the Committee determines that the
ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Committee may, in its discretion and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or eliminate such accounting
consequence including, but not limited to: 
 (i) Amending the Plan to conform with the safe harbor definition
under Financial Accounting Standards Board Accounting Standards Codification Topic 718, including with respect to an Offering Period underway at the time; 
 (ii) Altering the Purchase Price for any Offering Period including an Offering Period underway at the time of the change in Purchase Price; 

(iii) Shortening any Offering Period by setting a new Purchase Date, including an Offering Period underway at the time of
the Committee’s action; 
 (iv) Reducing the maximum percentage of Compensation a Participant may elect to
set aside as payroll deductions; and 

  
 8 

 (v) Reducing the maximum number of shares of Stock a Participant may
purchase during any Purchase Period. 
 Such modifications or amendments will not require stockholder approval or the consent of any Plan
Participants. 
 (d) Stockholder Approval. Except as provided in Section 3, any increase in the aggregate
number of shares of Stock that may be issued under the Plan shall be subject to the approval of the Company’s stockholders. In addition, any other amendment of the Plan shall be subject to the approval of the Company’s stockholders to the
extent required under Section 14(e) or by any applicable law or regulation. 
 (e) Plan Termination. The Plan
shall terminate automatically 20 years after its adoption by the Board, unless (i) the Plan is extended by the Board and (ii) the extension is approved within 12 months by a vote of the stockholders of the Company. 

 

	SECTION 15.	DEFINITIONS. 

 (a)
“Board” means the Board of Directors of the Company, as constituted from time to time. 
 (b)
“Code” means the Internal Revenue Code of 1986, as amended. 
 (c) “Committee” means a
committee of the Board, as described in Section 2. 
 (d) “Company” means KaloBios Pharmaceuticals, Inc.,
a Delaware corporation. 
 (e) “Compensation” means (i) the total compensation paid in cash to a
Participant by a Participating Company, including salaries, wages, bonuses, incentive compensation, commissions, overtime pay and shift premiums, plus (ii) any pre-tax contributions made by the Participant under Code Sections 401(k) or
125. “Compensation” shall exclude all non-cash items, moving or relocation allowances, cost-of-living equalization payments, car allowances, tuition reimbursements, imputed income attributable to cars or life insurance, severance pay,
fringe benefits, contributions or benefits received under employee benefit plans, income attributable to equity compensation awards of the Company, and similar items. The Committee shall determine whether a particular item is included in
Compensation. 
 (f) “Corporate Reorganization” means: 

(i) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate
reorganization; or 
 (ii) The sale, transfer or other disposition of all or substantially all of the
Company’s assets or the complete liquidation or dissolution of the Company. 
 (g) “Eligible Employee”
means a common law employee of a Participating Company who is customarily employed for more than five months per calendar year and at least 

  
 9 

 
20 hours per week. The foregoing notwithstanding, an individual shall not be considered an Eligible Employee if his or her participation in the Plan is prohibited by the law of any country that
has jurisdiction over him or her. In addition, the Committee may determine prior to the commencement of an Offering Period not to exclude part-time employees or exclude employees whose customary employment is for fewer hours per week or fewer months
in a calendar year; provided that such terms are applied in an identical manner to all employees of every Participating Company in such Offering Period. 
 (h) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 (i) “Fair Market Value” means the price at which Stock was last sold in the principal U.S. market for the Stock on the applicable date or, if the applicable date was not a trading day, on
the last trading day prior to the applicable date. If Stock is no longer traded on a public U.S. securities market, the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate. The Committee’s
determination shall be conclusive and binding on all persons. 
 (j) “IPO” means the Company’s initial
offering of Stock to the public. 
 (k) “IPO Date” means the effective date of the registration statement filed
by the Company with the Securities and Exchange Commission for its initial offering of Stock to the public. 
 (l)
“Offering Period” means any period, including Base Offering Periods and Additional Offering Periods, with respect to which the right to purchase Stock may be granted under the Plan, as determined pursuant to Section 4(a).

 (m) “Participant” means an Eligible Employee who participates in the Plan, as provided in Section 4.

 (n) “Participating Company” means (i) the Company and (ii) each present or future Subsidiary
designated by the Committee as a Participating Company. 
 (o) “Plan” means this KaloBios Pharmaceuticals,
Inc., 2012 Employee Stock Purchase Plan, as it may be amended from time to time. 
 (p) “Plan Account” means
the account established for each Participant pursuant to Section 8(a). 
 (q) “Purchase Date” means the
last trading day of a Purchase Period. 
 (r) “Purchase Period” means a period within an Offering Period (which
for an Offering Period with only a single Purchase Period would be coterminous with the Offering Period) during which contributions may be made toward the purchase of Stock under the Plan, as determined pursuant to Section 4(a). 

(s) “Purchase Price” means the price at which Participants may purchase Stock under the Plan, as determined pursuant to
Section 8(b). 

  
 10 

 (t) “Stock” means the Common Stock of the Company. 

(u) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the
Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 

  
 11

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