Document:

Exhibit 10.54

 

THERAVANCE, INC. 2004 EQUITY INCENTIVE PLAN

 

NOTICE OF RESTRICTED STOCK UNIT AWARD

 

You have been granted the number of restricted stock units indicated below by Theravance, Inc. (the “Company”) on the following terms:

 

Name:                                     «Name»

 

Restricted Stock Unit Award Details:

 

	
Date   of Grant:
    	
«DateGrant»
    
	
Restricted   Stock Units:
    	
«TotalShares»
    

 

Each restricted stock unit (the “restricted stock unit”) represents the right to receive one share of the Company’s Common Stock subject to the terms and conditions contained in the Restricted Stock Unit Agreement (the “Agreement”).

 

Vesting Schedule:

 

Vesting is dependent upon continuous service as an employee or consultant of the Company, a Parent, a Subsidiary or an Affiliate (“Service”) throughout the vesting period.  The units will vest as follows:

 

You and the Company agree that your right to receive the units is granted under and governed by the terms and conditions of the Plan and of the Agreement that is attached to and made a part of this document.  Capitalized terms not defined herein have the meaning ascribed to such terms in the Plan.

 

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

 

You agree to cover the applicable withholding taxes as set forth more fully herein.  In connection with your receipt of the restricted stock units, you are simultaneously entering into a trading arrangement that complies with the requirements of Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934 (a “10b5-1 Plan”).  As of the date of the Agreement, you are not aware of any material nonpublic information concerning the Company or its securities, or, as of the date any sales are effected pursuant to the 10b5-1 Plan, you will not effect such sales on the basis of material nonpublic information about the securities or the Company of which you were aware at the time you entered into the Agreement.

 

 

THERAVANCE, INC. 2004 EQUITY INCENTIVE PLAN:
 RESTRICTED STOCK UNIT AGREEMENT

 

	
Payment   for Shares
    	
 
    	
No   payment is required for the restricted stock units you are receiving.
    
	
 
    	
 
    	
 
    
	
Nature   of Units
    	
 
    	
Your   units are bookkeeping entries. They represent only the Company’s unfunded and   unsecured promise to issue shares of Common Stock on a future date. As a   holder of units, you have no rights other than the rights of a general   creditor of the Company.
    
	
 
    	
 
    	
 
    
	
Settlement   of Units
    	
 
    	
Each   of your units will be settled when it vests (unless you and the Company have   agreed to a later settlement date pursuant to procedures that the Company may   prescribe at its discretion).

 

At   the time of settlement, you will receive one share of the Company’s Common   Stock for each vested unit.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
The   restricted stock units that you are receiving will vest as shown in the Notice   of Restricted Stock Unit Award.

 

In   addition, the restricted stock units will vest in full if the Company is   subject to a Change in Control (as defined in the Plan) before your Service   terminates and you are subject to an Involuntary Termination (as defined   below) within 24 months after the Change in Control. 

 

“Involuntary   Termination” means a termination of your Service by reason of (i) an   involuntary dismissal or discharge by the Company (or Parent, Subsidiary or   Affiliate employing you) for reasons other than Cause or (ii) your   voluntary resignation following one of the following that is effected by the   Company without your consent (A) a change in your position with the   Company (or the Parent, Subsidiary or Affiliate employing you) which   materially reduces your level of responsibility, (B) a material   reduction in your base compensation, or (C) a relocation of your   workplace by more than fifty miles from your workplace immediately prior to   the Change in Control that also materially increases your one-way commute,   provided that in either case a “separation from service” (as defined in the   regulations under Code Section 409A) occurs. In order for your   resignation under clause (ii) to constitute an “Involuntary   Termination,” all of the following requirements must be satisfied:   (1) you must provide notice to the Company of your intent to resign and   assert an Involuntary Termination pursuant to clause (ii) within 90 days   of the initial existence of one or more of the conditions set forth in subclauses   (A) through (C), (2) the Company will have 30 days from the date of   such notice to remedy the condition and, if it does so, you may withdraw your   resignation or resign without any vesting acceleration, and (3)
    

 

 

	
 
    	
 
    	
any   termination of Service under clause (ii) must occur within two years of   the initial existence of one or more of the conditions set forth in   subclauses (A) through (C). Should the Company remedy the condition as   set forth above and then one or more of the conditions arises again within   two years following the occurrence of a Change in Control, you may assert   clause (ii) again subject to all of the conditions set forth herein.

 

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

 

Nothwithstanding   the foregoing, if you become eligible to participate in the Company’s 2009   Change in Control Severance Plan (the “2009 Severance Plan”), the vesting   acceleration provisions in the 2009 Severance Plan shall apply instead of   those contained herein. In addition, the restricted stock units shall be   treated as “shares” for purposes of acceleration of vesting under the 2009   Severance Plan.

 

If   the Company is subject to a Change in Control before your Service terminates,   the restricted stock units will vest in full if not assumed or replaced with   a new award as set forth in Section 10.1 of the Plan.No additional units   vest after your Service has terminated for any reason, except as set forth in   the 2009 Severance Plan to the extent you are eligible for benefits   thereunder. It is intended that vesting in the restricted stock units is   commensurate with a full-time work schedule. For possible adjustments that   may be made by the Company, see the Section below entitled “Leaves of   Absence and Part-Time Work.”
    
	
 
    	
 
    	
 
    
	
Forfeiture
    	
 
    	
If   your Service terminates for any reason then your restricted stock units that   have not vested before the termination date and do not vest as a result of   the termination pursuant to this Agreement or as set forth on the Notice of   Restricted Stock Unit Award, will be forfeited. This means that the   restricted stock units will revert to the Company. You receive no payment for   restricted stock units that are forfeited. The Company determines when your   Service terminates for this purpose.
    
	
 
    	
 
    	
 
    
	
Leaves   of Absence and Part-Time Work
    	
 
    	
For   purposes of this award, your Service does not terminate when you go on a   military leave, a sick leave or another bona fide   leave of absence, if the leave was approved by the Company in writing. If   your leave of absence (other than a military leave) lasts for more than 6   months, then vesting will be suspended on the day that is 6 months and 1 day   after the leave of absence began. Vesting will resume effective as of the second   vesting date after you return from leave of absence provided you have worked   at least one day during that vesting period.
    

 

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In   the case of all leaves, your Service terminates when the approved leave ends,   unless you immediately return to active work.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
If   you and the Company agree to a reduction in your scheduled work hours, then   the Company reserves the right to modify the rate at which the restricted   stock units vest, so that the rate of vesting is commensurate with your   reduced work schedule. Any such adjustment shall be consistent with the   Company’s policies for part-time or reduced work schedules or shall be   pursuant to the terms of an agreement between you and the Company pertaining   to your reduced work schedule.

 

The   Company shall not be required to adjust any vesting schedule pursuant to this   subsection.
    
	
 
    	
 
    	
 
    
	
Stock   Certificates
    	
 
    	
No   shares of Common Stock shall be issued to you prior to the date on which the   restricted stock units vest. After any restricted stock units vest pursuant   to this Agreement, the Company shall promptly cause to be issued in   book-entry form, registered in your name or in the name of your legal   representatives, beneficiaries or heirs, as the case may be, the number of   shares of Common Stock representing your vested restricted stock units. No   fractional shares shall be issued.
    
	
 
    	
 
    	
 
    
	
Section 409A
    	
 
    	
Unless   you and the Company have agreed to a deferred settlement date (pursuant to   procedures that the Company may prescribe at its discretion), settlement of   these restricted stock units is intended to be exempt from the application of   Code Section 409A pursuant to the “short-term deferral exemption” in   Treasury Regulation 1.409A-1(b)(4) and shall be administrated and   interpreted in a manner that complies with such exemption.

 

Notwithstanding   the foregoing, to the extent it is determined that settlement of these   restricted stock units is not exempt from Code Section 409A as a   short-term deferral or otherwise and the Company determines that you are a   “specified employee,” as defined in the regulations under Code   Section 409A, at the time of your “separation from service,” as defined   in those regulations, then any restricted stock units that otherwise would   have been settled during the first six months following your separation from   service will instead be settled on the first business day following the   six-month anniversary of your separation from service, unless the event   triggering vesting is an event other than your separation from service.
    
	
 
    	
 
    	
 
    
	
Stockholder   Rights
    	
 
    	
The   restricted stock units do not entitle you to any of the rights of a   stockholder of Common Stock. Upon settlement of the restricted stock units   into shares of Common Stock, you will obtain full voting and other rights as   a stockholder of the Company.
    
	
 
    	
 
    	
 
    
	
Units   Restricted
    	
 
    	
You   may not sell, transfer, pledge or otherwise dispose of any restricted stock   units or rights under this Agreement other than by will
    

 

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or   by the laws of descent and distribution. Notwithstanding the foregoing, you   may designate a beneficiary or beneficiaries to receive any property   distributable with respect to the restricted stock units upon your death.
    
	
 
    	
 
    	
 
    
	
Withholding   Taxes
    	
 
    	
No   shares will be distributed to you unless you have made arrangements   acceptable to the Company to pay any withholding taxes that may be due as a   result of the settlement of this award. Prior to the relevant taxable event,   you shall pay or make adequate arrangements satisfactory to the Company to   satisfy all withholding obligations for applicable taxes.

 

You   authorize the Company to instruct the broker whom it has selected for this   purpose to sell a number of shares of Common Stock to be issued upon the   vesting of your restricted stock units or a lesser number necessary to meet   tax withholding obligations. Such sales shall be effected at a market price   following the date that the restricted stock units vest (unless you and the   Company have agreed to a later settlement date pursuant to procedures that   the Company may prescribe at its discretion).

 

You   acknowledge that the proceeds of any such sale may not be sufficient to   satisfy your withholding obligations. To the extent the proceeds from such   sale are insufficient to cover the taxes due, the Company may in its   discretion (a) withhold the balance of all applicable taxes legally   payable by you from your wages or other cash compensation paid to you by the   Company and/or (b) withhold in shares of Common Stock, provided that the   Company only withholds an amount of shares not in excess of the amount   necessary to satisfy the minimum withholding amount. The fair market value of   withheld shares, determined as of the date taxes otherwise would have been   withheld in cash, will be applied against the withholding taxes. If the   Company satisfies the obligation for taxes by withholding a number of shares   of Common Stock as described above, you are deemed to have been issued the   full number of shares subject to the award of restricted stock units.
    
	
 
    	
 
    	
 
    
	
Rule 10b5-1   Plan
    	
 
    	
You   acknowledge that the instruction to the broker to sell in the foregoing   section is intended to comply with the requirements of   Rule 10b5-1(c)(1)(i)(B) under the Securities Exchange Act of 1934   (the “Exchange Act”), and to be interpreted to comply with the requirements   of Rule 10b5-1(c)(1) under the Exchange Act (a “10b5-1 Plan”). This   10b5-1 Plan is adopted to be effective as of the first date on which the   restricted stock units vest. This 10b5-1 Plan is being adopted to permit you   to sell a number of shares awarded upon the vesting of restricted stock units   sufficient to pay withholding taxes that become due as a result of this award   or the vesting of the restricted stock units or, if you elect within thirty   days following notification via the broker whom the Company has selected for   this purpose of your restricted
    

 

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stock   unit award, to permit you to sell all of the vested restricted stock units.   You hereby appoint the Company as your agent and attorney-in-fact to instruct   the broker with respect to the number of shares to be sold under this 10b5-1   Plan.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You   hereby authorize the broker to sell the number of shares of Common Stock   determined as set forth above and acknowledge that the broker is under no   obligation to arrange for such sale at any particular price. You acknowledge   that the broker may aggregate your sales with sales occurring on the same day   that are effected on behalf of other Company employees pursuant to sales of   shares vesting under Company options or restricted stock unit awards and your   proceeds will be based on a blended price for all such sales. You acknowledge   that you will be responsible for all brokerage fees and other costs of sale,   and you agree to indemnify and hold the Company harmless from any losses,   costs, damages, or expenses relating to any such sale. You acknowledge that   it may not be possible to sell Common Stock during the term of this 10b5-1   Plan due to (a) a legal or contractual restriction applicable to you or   to the broker, (b) a market disruption, (c) rules governing   order execution priority on the Nasdaq Global Market, (d) a sale   effected pursuant to this 10b5-1 Plan that fails to comply (or in the   reasonable opinion of the broker’s counsel is likely not to comply) with   Rule 144 under the Securities Act of 1933, if applicable, or (e) if   the Company determines that sales may not be effected under this 10b5-1 Plan.   You acknowledge that this 10b5-1 Plan is subject to the terms of any policy   adopted now or hereafter by the Company governing the adoption of 10b5-1   plans.
    
	
 
    	
 
    	
 
    
	
Restrictions   on Issuance
    	
 
    	
The   Company will not issue shares to you if the issuance of shares at that time   would violate any law or regulation.
    
	
 
    	
 
    	
 
    
	
Restrictions   on Resale
    	
 
    	
You   agree not to sell any shares of Common Stock you receive under this Agreement   at a time when applicable laws, regulations, Company trading policies   (including the Company’s Insider Trading Policy, a copy of which can be found   on the Company’s intranet) or an agreement between the Company and its   underwriters prohibit a sale. This restriction will apply as long as your   Service continues and for such period of time after the termination of your   Service as the Company may specify.
    
	
 
    	
 
    	
 
    
	
No   Retention Rights
    	
 
    	
Your   award or this Agreement does not give you the right to be employed or   retained by the Company (or a Parent or Subsidiary) in any capacity. The   Company and its Parent and its Subsidiaries reserve the right to terminate   your Service at any time, with or without cause.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
In   the event of a stock split, a stock dividend or a similar change in Common   Stock, the number of restricted stock units that will vest in
    

 

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any   future installments will be adjusted accordingly.
    
	
 
    	
 
    	
 
    
	
Applicable   Law
    	
 
    	
This   Agreement will be interpreted and enforced with respect to issues of contract   law under the laws of the State of Delaware.
    
	
 
    	
 
    	
 
    
	
The   Plan and Other Agreements
    	
 
    	
The   text of the Plan is incorporated in this Agreement by reference. A copy of   the Plan is available on the Company’s intranet or by request to the Finance   Department.

 

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

 

BY ACCEPTING THIS RESTRICTED STOCK UNIT AWARD, YOU AGREE TO

 

ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

 

6Exhibit 10.55

 

THERAVANCE, INC. 2004 EQUITY INCENTIVE PLAN

 

NOTICE OF STOCK OPTION GRANT

 

You have been granted the following option to purchase shares of the Common Stock of Theravance, Inc. (the “Company”):

 

	
Name of Optionee:
    	
 
    	
«First» «Last»
    
	
 
    	
 
    	
 
    
	
ID Number:
    	
 
    	
«ID»
    
	
 
    	
 
    	
 
    
	
Total   Number of Shares:
    	
 
    	
«Shares»
    
	
 
    	
 
    	
 
    
	
Type   of Option:
    	
 
    	
Nonstatutory   Stock Option
    
	
 
    	
 
    	
 
    
	
Grant   Number:
    	
 
    	
«Number»
    
	
 
    	
 
    	
 
    
	
Exercise   Price Per Share:
    	
 
    	
«Price»
    
	
 
    	
 
    	
 
    
	
Date of Grant:
    	
 
    	
«Grant_Date»
    
	
 
    	
 
    	
 
    
	
Vesting Schedule:
    	
 
    	
«Vest_Sched»
    
	
 
    	
 
    	
 
    
	
Expiration   Date:
    	
 
    	
«Expiration_Date». This option expires   earlier if your Service terminates earlier, as described in the Stock Option   Agreement.
    

 

You and the Company agree that this option is granted under and governed by the terms and conditions of the Stock Option Agreement, which is attached to and made a part of this document, and the 2004 Equity Incentive Plan (the “Plan”).

 

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

 

 

THERAVANCE, INC. 2004 EQUITY INCENTIVE PLAN

 

STOCK OPTION AGREEMENT

 

	
Tax   Treatment
    	
 
    	
This   option is a nonstatutory stock option.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
This option becomes exercisable in installments, as shown in the   Notice of Stock Option Grant.

 

This option shall become exercisable in full if not assumed or   replaced with a new award in accordance with Section 10.1 of the Plan.   In addition, this option becomes exercisable in full if the Company is   subject to a “Change in Control” (as defined   in the Plan) before your Service terminates, and you are subject to an   Involuntary Termination (as defined below) within 24 months after the Change   in Control.

 

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

 

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

 

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

 

(b)   your voluntary resignation   following one of the following that is effected by the Company without your   consent (i) a change in your position with the Company (or Parent,   Subsidiary or Affiliate employing you) which materially reduces your level of   responsibility, (ii) a material reduction in your base  compensation  or (iii) a relocation of your   workplace by more than fifty miles from your workplace immediately prior to   the Change in Control that also materially increases your one-way commute. In   order for your resignation under clause (b) to constitute an   “Involuntary Termination,” all of the following requirements must be   satisfied: (1) you must provide notice to the Company of your intent to   resign and assert an Involuntary Termination pursuant to clause   (b) within 90 days of the initial existence of one or more of the   conditions set forth in subclauses (i) through (iii), (2) the   Company will have 30 days from the date of such notice to remedy the   condition and, if it does so,
    

 

 

	
 
    	
 
    	
you may withdraw your resignation or resign without any vesting   acceleration, and (3) any termination of Service under clause   (b) must occur within two years of the initial existence of one or more   of the conditions set forth in subclauses (i) through (iii).  Should the Company remedy the condition as   set forth above and then one or more of the conditions arises again within   two years following the occurrence of a Change in Control, you may assert   clause (b) again subject to all of the conditions set forth herein.

 

For purposes of this Agreement, “Service”   means your service as an Employee or Consultant.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Nothwithstanding the foregoing, if you become eligible to participate   in the Company’s 2009 Change in Control Severance Plan (the “2009 Severance   Plan”), the vesting acceleration provisions in the 2009 Severance Plan shall   apply instead of those contained herein.

 

No additional shares will vest after your Service has terminated for   any reason, except as set forth in the 2009 Severance Plan to the extent you   are eligible for benefits thereunder.
    
	
 
    	
 
    	
 
    
	
Term
    	
 
    	
This   option expires in any event at the close of business at Company headquarters   on the day before the 10th anniversary of the Date of   Grant, as shown in the Notice of Stock Option Grant.  (It will expire earlier if your Service   terminates, as described below.)  You   may exercise this option at any time before its expiration under the   preceding sentence, but only to the extent that this option had become   exercisable before your Service terminated. 
    
	
 
    	
 
    	
 
    
	
Regular   Termination
    	
 
    	
If   your Service terminates for any reason except death or total and permanent   disability, then this option will expire at the close of business at Company   headquarters on the date three months after your termination date.  The Company determines when your Service   terminates for this purpose.
    
	
 
    	
 
    	
 
    
	
Death
    	
 
    	
If   you die before your Service terminates, then this option will expire at the   close of business at Company headquarters on the date that is 12 months after   the date of death.
    
	
 
    	
 
    	
 
    
	
Disability
    	
 
    	
If your Service terminates because of your total and permanent   disability, then this option will expire at the close of business at Company   headquarters on the date 12 months after your termination date.

 

For   all purposes under this Agreement, “total and permanent disability” means   that you are unable to engage in any substantial gainful activity by reason   of any medically determinable physical or mental impairment which can be   expected to result in death or which has lasted, or can be
    

 

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expected to last, for a continuous period of not less than one year.
    
	
 
    	
 
    	
 
    
	
Leaves   of Absence and Part-Time Work
    	
 
    	
For purposes of this option, your Service does not terminate when you   go on a military leave, a sick leave or another bona fide   leave of absence, if the leave was approved by the Company in writing.  But your Service terminates when the   approved leave ends, unless you immediately return to active work.

 

If you go on a leave of absence, then the vesting schedule specified   in the Notice of Stock Option Grant may be adjusted in accordance with the   Company’s leave of absence policy or the terms of your leave.  If you commence working on a part-time   basis, then the vesting schedule specified in the Notice of Stock Option   Grant may be adjusted in accordance with the Company’s part-time work policy   or the terms of an agreement between you and the Company pertaining to your   part-time schedule.
    
	
 
    	
 
    	
 
    
	
Restrictions   on Exercise
    	
 
    	
The Company will not permit you to exercise this option if the   issuance of shares at that time would violate any law or regulation.
    
	
 
    	
 
    	
 
    
	
Notice   of Exercise
    	
 
    	
When you wish to exercise this option, you must notify the Company by   filing the proper “Notice of Exercise” form at the address given on the   form.  Your notice must specify how   many shares you wish to purchase.  Your   notice must also specify how your shares should be registered.  The notice will be effective when the   Company receives it.

 

If someone else wants to exercise this option after your death, that   person must prove to the Company’s satisfaction that he or she is entitled to   do so.
    
	
 
    	
 
    	
 
    
	
Form of   Payment
    	
 
    	
When you submit your notice of exercise, you must include payment of   the option exercise price for the shares that you are purchasing.  To the extent permitted by applicable law,   payment may be made in one (or a combination of two or more) of the following   forms:

 

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

 

·      Shares   of Company stock that you own, along with any forms needed to effect a   transfer of those shares to the Company.    The value of the shares, determined as of the effective date of the   option exercise, will be applied to the option exercise price.  Instead of surrendering shares of Company   stock, you may attest to the ownership of those shares on a form provided by   the Company and have the same number of shares subtracted from the option   shares issued to you.  However, you may   not surrender, or attest to the ownership of, shares of Company stock in   payment of the exercise price if your action would cause the Company to   recognize compensation expense (or additional compensation expense) with   respect to this option for financial reporting purposes.

 

·      Irrevocable   directions to a securities broker approved by the Company
    

 

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to sell all or part of your option shares and to deliver to the   Company from the sale proceeds an amount sufficient to pay the option   exercise price and any withholding taxes.    (The balance of the sale proceeds, if any, will be delivered to   you.)  The directions must be given by   signing a special “Notice of Exercise” form provided by the Company.

 

·      Irrevocable   directions to a securities broker or lender approved by the Company to pledge   option shares as security for a loan and to deliver to the Company from the   loan proceeds an amount sufficient to pay the option exercise price and any   withholding taxes.  The directions must   be given by signing a special “Notice of Exercise” form provided by the   Company.
    
	
 
    	
 
    	
 
    
	
Withholding   Taxes and Stock Withholding
    	
 
    	
You will not be allowed to exercise this option unless you make   arrangements acceptable to the Company to pay any withholding taxes that may   be due as a result of the option exercise.    With the Company’s consent, these arrangements may include withholding   shares of Company stock that otherwise would be issued to you when you   exercise this option.  The value of   these shares, determined as of the effective date of the option exercise,   will be applied to the withholding taxes.
    
	
 
    	
 
    	
 
    
	
Restrictions   on Resale
    	
 
    	
You agree not to sell any option shares at a time when applicable   laws, Company policies or an agreement between the Company and its   underwriters prohibit a sale.  This   restriction will apply as long as your Service continues and for such period   of time after the termination of your Service as the Company may specify.
    
	
 
    	
 
    	
 
    
	
Transfer   of Option
    	
 
    	
Prior to your death, only you may exercise this option.  You cannot transfer or assign this   option.  For instance, you may not sell   this option or use it as security for a loan.    If you attempt to do any of these things, this option will immediately   become invalid.  You may, however,   dispose of this option in your will or a beneficiary designation.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Regardless of any marital property settlement agreement, the Company   is not obligated to honor a notice of exercise from your former spouse, nor   is the Company obligated to recognize your former spouse’s interest in your   option in any other way.
    
	
 
    	
 
    	
 
    
	
No   Retention Rights
    	
 
    	
Your option or this Agreement does not give you the right to be   retained by the Company or a subsidiary of the Company in any capacity.  The Company and its subsidiaries reserve   the right to terminate your Service at any time, with or without cause.
    
	
 
    	
 
    	
 
    
	
Stockholder   Rights
    	
 
    	
You, or your estate or heirs, have no rights as a stockholder of the   Company until you have exercised this option by giving the required notice to   the Company and paying the exercise price.    No adjustments are made for dividends or other rights if the   applicable record date occurs
    

 

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before you exercise this option, except as described in the Plan.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
In the event of a stock split, a stock dividend or a similar change   in Company stock, the number of shares covered by this option and the   exercise price per share shall be adjusted as provided in the Plan.
    
	
 
    	
 
    	
 
    
	
Applicable   Law
    	
 
    	
This Agreement will be interpreted and enforced under the laws of the   State of Delaware (without regard to their choice-of-law provisions).
    
	
 
    	
 
    	
 
    
	
The   Plan and Other Agreements
    	
 
    	
The text of the Plan is incorporated in this Agreement by   reference.  A copy of the Plan is   available on the Company’s intranet or by request to the Finance Department.

 

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

 

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

 

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