Document:

csgs-ex1048b_47.htm

Exhibit 10.48B

RESIGNATION AND RETIREMENT AGREEMENT 

THIS RESIGNATION and RETIREMENT AGREEMENT (the “Agreement”) is made and entered into as of November 19, 2015, by and between CSG SYSTEMS INTERNATIONAL, INC. (“CSGS”), a Delaware corporation, CSG SYSTEMS, INC. (“Systems”), a Delaware corporation, and PETER E. KALAN (the “Executive”).  CSGS and Systems collectively are referred to in this Resignation and Retirement Agreement as the “Company”.

WI T N E S S E T H:

WHEREAS, the Executive and the Company are parties to that certain Restated Employment Agreement dated May 29, 2008, as amended in August 2008, (the “Employment Agreement”), pursuant to which the Executive serves as the Company’s Chief Executive Officer; 

WHEREAS, the Executive intends to retire from the Company as Chief Executive Officer, and the parties mutually desire to arrange for the retirement to be under certain terms and conditions intended to provide Executive with compensation for his services with the Company; and

WHEREAS, in consideration of the mutual promises contained herein, the parties hereto are willing to enter into this Agreement upon the terms and conditions herein set forth.

NOW, THEREFORE, in consideration of the mutual promises, the terms and provisions set forth herein, the mutual benefits to be gained by the performance thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Continued Employment;.  Executive will continue his employment as Chief Executive Officer of the Company until December 30, 2015 (the “Resignation Date”); thereafter, Executive will cease to be the Chief Executive Officer of the Company but will continue his employment as a non-executive employee of the Company until March 31, 2016 (the “Retirement Date”), and the Company agrees in all events (other than Executive's death or termination for Cause) to continue Executive's employment from the date of this Agreement through the Retirement Date regardless of any disability of Executive and will not take any action to terminate the employment of Executive prior to March 31, 2016, except for Cause and only in the event that Cause actually exists.  Until the Resignation Date, Executive will continue to have the responsibilities, duties, and authorities currently associated with his position as Chief Executive Officer of the Company.  Executive hereby resigns as an officer and director of CSGS and Systems, effective as of the Resignation Date; and the Company and Executive will use their respective best efforts to effect the Executive's resignation from all positions with any direct or indirect subsidiaries or affiliates of CSGS other than Systems as soon as practicable after the Resignation Date.  After the Resignation Date, Executive’s employment will be in a non-executive, non-officer capacity to assist, as requested, with the Company's management transition.  After the Resignation Date, Executive (1) will not have any duties or perform any functions for the Company or any subsidiary or affiliate of the Company corresponding to the 

 

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duties or functions of an officer of the Company or any subsidiary or affiliate of the Company and (2) will not perform any policy making functions for the Company or any subsidiary or affiliate of the Company. 

(a)Compensation in Respect of Continued Employment.

(i)General.  Executive’s base salary, perquisites, and expense reimbursements through the Resignation Date will remain the same as those in effect as of the date of this Agreement. 

(ii)Annual Bonus.  Executive will be entitled to the payment of his Bonus Award for 2015 (the “2015 Bonus”) pursuant to the CSG Systems International, Inc. Performance Bonus Program and related Performance Bonus Plan, and such Bonus Award shall be paid on or prior to March 15, 2016, at the same time that 2015 Bonus Awards under such Plan are paid to the other members of the Company's senior management team.  The Company anticipates but does not guarantee that Executive will receive the maximum allowable bonus under the CSG Systems International, Inc. Performance Bonus Program and related 2015 Performance Bonus Plan.   

(iii)Equity Incentives.  Executive’s existing Restricted Stock Awards from CSGS will continue to vest and be earned and payable to Executive (to the extent applicable) in accordance with their terms through March 31, 2016.  

(iv)Amendment to Vesting Schedule Upon Retirement.  The Compensation Committee (the "Committee") of the Board of Directors of CSGS will modify the Executive’s outstanding time-based Restricted Stock Awards set forth in Exhibit A hereto to provide for accelerated vesting prior to March 31, 2016, to the extent set forth in Exhibit A.

(b)Compensation in Respect of Continued Employment From Resignation Date Through Retirement Date.  The Company (1) will pay Executive a monthly salary of $2,000 in periodic installments for his services during the period from the Resignation Date through the Retirement Date and (2) until the Retirement Date, at the expense of the Company, will continue to provide to Executive and his eligible dependents individual or group medical, hospital, dental, and long-term disability insurance coverages and group life insurance coverage comparable to those coverages which are provided to the Company's then senior executives.  Such salary shall be paid according to customary Company payroll practices.

(c)Death of Executive.  If Executive dies prior to the required certification by the Committee that the applicable Performance Goals for the payment of Executive's 2015 Bonus have been satisfied and such certification by the Committee subsequently occurs, then the Committee will direct the Company to pay the 2015 Bonus in full to Executive's estate concurrently with the Company’s payment of other Bonus Awards for 2015.  If Executive dies prior to the vesting of Executive’s time-based Restricted Stock Awards which are scheduled to vest on or prior to March 31, 2016, then the Committee will waive the requirement that Executive be employed by the Company on the 2016 vesting dates of such Restricted Stock Awards and will direct the Company to cause the issuance to Executive’s estate of the time-

 

 

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based Award Shares which would have vested in Executive on or prior to March 31, 2016, pursuant to such time-based Restricted Stock Awards if Executive had not died, subject to applicable tax withholding requirements.  If Executive dies prior to the vesting of Executive’s  performance-based Restricted Stock Awards which would vest in Executive on or prior to March 31, 2016, if the Committee certifies the attainment of the 2015 Performance Goals applicable to such Restricted Stock Awards and such certification by the Committee subsequently occurs, then the Committee will direct the Company to cause the issuance to Executive’s estate of the performance-based Award Shares which would have vested in Executive on or prior to March 31, 2016, pursuant to such performance-based Restricted Stock Awards if Executive had not died, subject to applicable tax withholding requirements. 

 

2.Definition of "Cause".  For purposes of this Agreement, "Cause" means only (i) Executive's confession or conviction of theft, fraud, embezzlement, or other crime involving dishonesty, (ii) Executive's certification of materially inaccurate financial or other information pertaining to the Company or any of the subsidiaries of the Company with actual knowledge of such inaccuracies on the part of Executive, (iii) Executive's refusal or willful failure to cooperate with an investigation by a governmental agency pertaining to the financial or other business affairs of the Company or any of the subsidiaries of the Company unless such refusal or willful failure is based upon a written directive of the Board of Directors of CSGS or the written advice of counsel, (iv) a material breach by Executive of any of his fiduciary duties to the Company or any of the subsidiaries of the Company and, if such breach is curable, Executive's failure to cure such breach within ten (10) days after Executive's receipt of a written notice from the Board of Directors of CSGS setting forth in reasonable detail the particulars of such breach, or (v) willful misconduct or fraud on the part of Executive in the performance of Executive's duties under this agreement as determined in good faith by the Board of Directors of CSGS.  

3.Employment Agreement Superseded.  Except as specifically set forth in Section 4 below, this Agreement will supersede the Employment Agreement in its entirety as of the Resignation Date, and the Employment Agreement will cease to have any further force and effect from and after the Resignation Date.  For avoidance of doubt, the reference herein to certain terms defined in the Employment Agreement shall not operate to give any force or effect to the Employment Agreement.  The Executive acknowledges and agrees that, by signing this Agreement, he is aware that he is waiving any and all legal right to compensation under the Employment Agreement after December 30, 2015.  

4.Continuing Obligations.  The following provisions of the Employment Agreement are incorporated herein by reference and shall remain in effect from and after the Resignation Date as follows:

(a)Nondisclosure.  Paragraph 11 of the Employment Agreement (regarding the nondisclosure of confidential information, trade secrets, or proprietary data) shall remain in effect in accordance with its provisions;

(b)Non-Solicitation of Employees.  Paragraph 18 of the Employment Agreement (regarding the non-solicitation of employees) shall remain in effect for a period of 

 

 

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two (2) years after the Retirement Date (rather than one (1) year as currently stated in such Paragraph 18); and

(c)Post-Termination Noncompetition.  Paragraph  19 of the Employment Agreement (regarding post-termination noncompetition) shall remain in effect for a period of two (2) years after the Retirement Date (rather than one (1) year as currently stated in such Paragraph 19).

5.Nonassignability.  Except for those rights that may accrue to the Executive’s family or estate in the event of his death or disability, neither this Agreement nor any right or interest hereunder shall be subject, in any manner, to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, whether voluntary or involuntary, by operation of law or otherwise, and any attempt at such shall be void; provided, that any such benefit shall not in any way be subject to the debts, contract, liabilities, engagements or torts of the Executive, nor shall it be subject to attachment or legal process for or against the Executive.

6.Entire Agreement Modification.  This Agreement sets forth the entire agreement and understanding of the parties concerning the subject matter hereof and supersedes all prior agreements, arrangements and understandings relative to that subject matter including, without limitation, the Employment Agreement (except as specifically set forth in Section 4 above).  No term or provision hereof may be modified or extinguished, in whole or in part, except by a writing which is dated and signed by the parties to this Agreement.  No waiver of any of the provisions or conditions of this Agreement or of any of the rights, powers or privileges of a party will be effective or binding unless in writing and signed by the party claimed to have given or consented to such waiver.  No representation, promise or inducement has been made to or relied upon by or on behalf of either party concerning the subject matter hereof which is not set forth in this Agreement.  In particular, the Executive acknowledges and agrees that he is not entitled to receive from the Company any severance, incentive or other compensation or payment related to his services to the Company or the termination thereof, other than the consideration specifically set forth herein.

7.Waiver.  No term or condition of this Agreement shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel. 

8.Notices.  All notices or communications hereunder shall be in writing, addressed as follows: 

To the Company:

 

CSG Systems International, Inc.

9555 Maroon Circle

Englewood, CO 80112

Attn:  General Counsel

 

 

 

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CSG Systems, Inc.

9555 Maroon Circle

Englewood, CO 80112

Attn:  General Counsel

 

To the Executive:  

 

At the address, e-mail, or fax number of record in the Company’s file.

 

All such notices shall be conclusively deemed to be received and shall be effective; (i) if sent by hand delivery, upon receipt, (ii) if sent by e-mail, telecopy or facsimile transmission, upon confirmation of receipt by the sender of such transmission, or (iii) if sent by registered or certified mail, on the fifth day after the day on which such notice is mailed.

9.Source of Payments.  All cash payments provided in this Agreement will be paid from the general funds of the Company.  The Executive’s status with respect to amounts owed under this Agreement will be that of a general unsecured creditor of the Company.

10.Federal Income Tax Withholding.  The Company may withhold from any benefits payable under this Agreement all federal, state, city or other taxes to the extent required pursuant to any law or governmental regulation or ruling.

11.Severability.  If any provision of this Agreement is held to be invalid, illegal or unenforceable, in whole or part, such invalidity will not affect any otherwise valid provision, and all other valid provisions will remain in full force and effect.

12.Counterparts.  This Agreement may be executed in two or more counterparts, each of which will be deemed an original, and all of which together will constitute one document.

13.Titles.  The titles and headings preceding the text of the paragraphs and subparagraphs of this Agreement have been inserted solely for convenience of reference and do not constitute a part of this Agreement or affect its meaning, interpretation or effect.

14.Section 409A Compliance.

(a)Each payment under this Agreement, including each payment in a series of installment payments, is intended to be a separate payment for purposes of Treas. Reg. § 1.409A-2(b), and is intended to be: (i) exempt from Section 409A of the Code, the regulations and other binding guidance promulgated thereunder (“Section 409A”), including, but not limited to, by compliance with the short-term deferral exemption as specified in Treas. Reg. § 1.409A-1(b)(4) and the involuntary separation pay exception within the meaning of Treas. Reg. § 1.409A-1(b)(9)(iii), or (ii) in compliance with Section 409A, including, but not limited to, being paid pursuant to a fixed schedule or specified date pursuant to Treas. Reg. § 1.409A-3(a) and the provisions of this Agreement will be administered, interpreted and construed accordingly.  Notwithstanding the foregoing provisions of this Agreement, if the payment of any 

 

 

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compensation or benefits under this Agreement would be subject to additional taxes and interest under Section 409A because the timing of such payment is not delayed as provided in Section 409A(a)(2)(B)(i) of the Code, and Executive constitutes a specified employee within the meaning of Section 409A(a)(2)(B)(i) of the Code, then any such payments that Executive would otherwise be entitled to during the first six months following Executive’s separation from service within the meaning of Section 409A(a)(2)(A)(i) of the Code shall be accumulated and paid on the date that is six months after Executive’s separation from service (or if such payment date does not fall on a business day of the Company, the next following business day of the Company), or such earlier date upon which such amount can be paid under Section 409A without being subject to such additional taxes and interest.

(b)All taxable reimbursements pursuant to this Agreement shall be made in accordance with Treas. Reg. § 1.409A-3(i)(l)(iv) such that the reimbursements will be deemed payable at a specified time or on a fixed schedule relative to a permissible payment event.  Specifically, the amounts reimbursed under this Agreement during the Executive’s taxable year may not affect the amounts reimbursed in any other taxable year (except that total reimbursements may be limited by a lifetime maximum under a group health plan), the reimbursement of an eligible expense shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense was incurred, and the right to reimbursement is not subject to liquidation or exchange for another benefit.

15.Governing Law; Venue.  This Agreement will be construed and enforced in accordance with the laws of the State of Colorado.  Any suit, action or other legal proceeding arising out of this Agreement shall be brought in the state or federal courts having jurisdiction in Denver, Colorado.  Each of the Executive and the Company consents to the jurisdiction of any such court in any such suit, action, or proceeding and waives any objection that it may have to the laying of venue of any such suit, action, or proceeding in any such court.

16.Terms.  The term “affiliate” means any subsidiary, any officer, director or employee of the Company or any subsidiary, and any former officer, director or employee of the Company or any subsidiary.

17.Successor Obligations.  The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

18.Reimbursement of Attorney Fees.  The Company shall reimburse Executive for attorney fees incurred in the negotiation of this Agreement, promptly upon receipt of documentation of such fees.

 

 

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19.Directors and Officers Insurance Coverage.  

(a)General.  The Company hereby covenants and agrees that, so long as the Executive shall continue to serve as an officer or director of the Company and thereafter so long as the Executive shall be subject to any possible proceeding by reason of the fact that Executive was an officer or director of the Company, the Company shall, subject to Section 19(b) below, use reasonable efforts to obtain and maintain in full force and effect directors’ and officers’ liability insurance (“D&O Insurance”) in reasonable amounts from established and reputable insurers, and Executive shall be a covered party under such D&O Insurance to the maximum extent of the coverage available for any director or officer of the Company.

(b)Commercial Reasonableness.  Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain D&O Insurance if the Company determines in good faith that such insurance is not reasonably available, the premium costs for such insurance are disproportionate to the amount of coverage provided, or the coverage is reduced by exclusions so as to provide an insufficient benefit.

(c)Change in Control.  In the event of a Change in Control pursuant to which the Company or any successor is obligated to provide D&O Insurance for a period of time following the effective date of the transaction or to purchase a D&O Insurance tail policy, Executive shall be a covered party under such D&O Insurance or tail policy to the maximum extent of the coverage available for any director or officer of the Company.

20.Waiver and Release.  Promptly after the Retirement Date, Executive will deliver to the Company a waiver and release of all claims against the Company and its officers, directors, agents, and employees, known and unknown, in a form mutually acceptable to the Company and Executive, containing provisions customarily included in a release executed by an employee in consideration of payments or benefits received by the employee in connection with the employee's termination of employment. 

 

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement on November 19, 2015, but effective as of the date and year first above written.

 

CSG SYSTEMS INTERNATIONAL, INC.

 

 

 

 

By: /s/ Bret C. Griess

 

 

CSG SYSTEMS, INC.

 

 

 

 

By: /s/ Bret C. Griess

 

 

EXECUTIVE

 

 

 

 

By: /s/ Peter E. Kalan

Peter E. Kalan

 

 

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Exhibit 10.48B

 

 

Exhibit A

 

EQUITY AGREEMENT AMENDMENTS

 

Time-Based Restricted Stock Awards

 

 

	
Date of Agreement
	
Number of Unvested 

Shares as of 3/31/2016
	
Number of Shares Whose

 Vesting Will be Accelerated

	
 
	
 
	
 

	
February 27, 2013
	
10,257
	
10,257

	
February 19, 2014
	
15,038
	
7,519

	
February 19, 2015
	
21,414
	
7,138

 

 

 

 

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Exhibit 10.4

 

CytomX Therapeutics, Inc.

2015 Equity Incentive Plan

Option Award Notice

[Name of Optionee]

You have been awarded an option to purchase shares of Common Stock of CytomX Therapeutics, Inc., a Delaware corporation (the “Company”), pursuant to the terms and conditions of the CytomX Therapeutics, Inc. 2015 Equity Incentive Plan (the “Plan”) and the Stock Option Agreement (together with this Award Notice, the “Agreement”).  Copies of the Plan and the Stock Option Agreement are attached hereto.  Capitalized terms not defined herein shall have the meanings specified in the Plan or the Agreement.

	
Option:
	
You have been awarded a [Incentive Stock Option / Nonqualified Stock Option] to purchase from the Company [insert number] shares of its Common Stock, par value $0.00001 per share (the “Common Stock”), subject to adjustment as provided in Section 4.2 of the Agreement.

	
Option Date:
	
[____________________, _____]

	
Exercise Price:
	
$[______________] per share, subject to adjustment as provided in Section 4.2 of the Agreement.

	
Vesting Schedule:
	
Except as otherwise provided in the Plan, the Agreement or any other agreement between the Company or any of its Subsidiaries and Optionee, the Option shall vest [___________________], if, and only if, Optionee is, and has been, continuously (except for any absence for vacation, leave, etc. in accordance with the Company's or its Subsidiaries' policies): (i) employed by the Company or any of its Subsidiaries, (ii) serving as a Non-Employee Director or (iii) providing services to the Company or any of its Subsidiaries as an advisor or consultant, in each case, from the date of this Agreement through and including such date. 

	
Expiration Date:
	
Except to the extent earlier terminated pursuant to Section 2.2 of the Agreement or earlier exercised pursuant to Section 2.3 of the Agreement, the Option shall terminate at 5:00 p.m., U.S. Pacific time, on [_______________]. 

 

 

 

 

CYTOMX THERAPEUTICS, INC. 

 

	
 
	
By:
	
______________________________

Name:

Title:

 

Acknowledgment, Acceptance and Agreement:

By signing below and returning this Award Notice to CytomX Therapeutics, Inc. at the address stated herein, I hereby acknowledge receipt of the Agreement and the Plan, accept the Option granted to me and agree to be bound by the terms and conditions of this Award Notice, the Agreement and the Plan.

 

______________________________

	
Optionee
	

 

______________________________

Date

 

CytomX Therapeutics, Inc. 

Attention:  [_________________]

343 Oyster Point Blvd. 

Suite 100

South San Francisco, CA 94080 

 

 

 

 

 

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CytomX Therapeutics, Inc.
2015 Equity Incentive Plan

Stock Option Agreement

CytomX Therapeutics, Inc., a Delaware corporation (the “Company”), hereby grants to the individual (“Optionee”) named in the award notice attached hereto (the “Award Notice”) as of the date set forth in the Award Notice (the “Option Date”), pursuant to the provisions of the CytomX Therapeutics, Inc. 2015 Equity Incentive Plan (the “Plan”), an option to purchase from the Company the number of shares of the Company’s Common Stock, par value $0.00001 per share (“Common Stock”), set forth in the Award Notice at the price per share set forth in the Award Notice (the “Exercise Price”) (the “Option”), upon and subject to the terms and conditions set forth below, in the Award Notice and in the Plan.  Capitalized terms not defined herein shall have the meanings specified in the Plan.

1.Option Subject to Acceptance of Agreement.  The Option shall be null and void unless Optionee shall accept this Agreement by executing the Award Notice in the space provided therefor and returning an original execution copy of the Award Notice to the Company (or electronically accepting this Agreement within the Optionee’s stock plan account with the Company’s stock plan administrator according to the procedures then in effect).  

2.Time and Manner of Exercise of Option.

2.1.Maximum Term of Option.  In no event may the Option be exercised, in whole or in part, after the expiration date set forth in the Award Notice (the “Expiration Date”).

2.2.Vesting and Exercise of Option.  The Option shall become vested and exercisable in accordance with the vesting schedule set forth in the Award Notice (the “Vesting Schedule”).  The Option shall be vested and exercisable following a termination of Optionee’s employment according to the following terms and conditions:  

(a)Termination of Employment due to Death or Disability.  If Optionee’s employment with the Company terminates by reason of Optionee’s death or Disability, the Option, to the extent vested on the effective date of such termination of employment, may thereafter be exercised by Optionee or Optionee’s executor, administrator, legal representative, guardian or similar person until and including the earlier to occur of (i) the date which is one year after the date of termination of employment and (ii) the Expiration Date.   Except to the extent the Option is vested and exercisable as of the date of Optionee’s death or termination due to Disability, the Option shall terminate as of the date of Optionee’s termination of employment. 

(b)Termination by the Company Other than for Cause, Death or Disability or by Optionee.  If Optionee’s employment with the Company is terminated (i) by the Company for any reason other than for Cause, death or Disability or (ii) by the Optionee by reason of the Optionee’s resignation from employment for any reason, the Option, to the extent vested on the effective date of such termination of employment, may thereafter be exercised by Optionee until and including the earlier to occur of (i) the date which is ninety (90) days after the date of such termination of employment and (ii) the Expiration Date.

(c)Termination by Company for Cause.  If Optionee’s employment with the Company terminates by reason of the Company’s termination of Optionee’s employment for Cause, then the Option, whether or not vested, shall terminate immediately upon such termination of employment.

(d)Definitions.  

(i)Cause.  For purposes of this Option, “Cause” shall have the meaning set forth in the employment agreement, if any, between the Optionee and the Company or any of its Subsidiaries, provided that if Optionee is not a party to an employment agreement that contains such definition, then 

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“Cause” shall mean a termination of employment or service based upon a finding by the Company or any of its Subsidiaries, acting in good faith and based on its reasonable belief at the time, that the Optionee:  (1) has been negligent in the discharge of his or her duties to the Company or any Subsidiary, has refused to perform stated or assigned duties or is incompetent in or (other than by reason of a Disability or analogous condition) incapable of performing those duties; (2) has been dishonest or committed or engaged in an act of theft, embezzlement or fraud, a breach of confidentiality, an unauthorized disclosure or use of inside information, customer lists, trade secrets or other confidential information; (3)  has breached a fiduciary duty, or willfully and materially violated any other duty, law, rule, regulation or policy of the Company or any of its Subsidiaries; or has been convicted of, or pled guilty or nolo contendere to, a felony or misdemeanor (other than minor traffic violations or similar offenses); (4) has materially breached any of the provisions of any agreement with the Company or any of its Subsidiaries; (5) has engaged in unfair competition with, or otherwise acted intentionally in a manner injurious to the reputation, business or assets of, the Company or any of its Subsidiaries; or (6)  has improperly induced a vendor or customer to break or terminate any contract with the Company or any of its Subsidiaries or induced a principal for whom the Company or any Subsidiary acts as agent to terminate such agency relationship.   A termination for Cause shall be deemed to occur (subject to reinstatement upon a contrary final determination by the Committee) on the date on which the Company or any Subsidiary first delivers written notice to the Optionee of a finding of termination for Cause. 

 

(ii)Disability.  For purpose of this Option, “Disability” shall have the meaning set forth in the employment agreement, if any, between the Optionee and the Company or any of its Subsidiaries, provided that if Optionee is not a party to an employment agreement that contains such definition, then “Disability” shall mean Optionee’s inability, due to illness, accident, injury, physical or mental incapacity or other disability, to carry out effectively Optionee’s duties and obligations to the Company or any of its Subsidiaries or, if applicable based on Optionee’s position, to participate effectively and actively in the management of the Company or any of its Subsidiaries for a period of at least 90 consecutive days or for shorter periods aggregating at least 120 days (whether or not consecutive) during any twelve month period, as determined in the reasonable judgment of the Board. A Disability shall be deemed to have occurred on the date that either Optionee or Optionee’s personal representative or legal guardian, on the one hand, or the Company, on the other hand, provides notice to the other party of the satisfaction of each of the requirements to constitute a Disability set forth above or on such other date as the parties shall mutually agree.

2.3.Method of Exercise.  Subject to the limitations set forth in this Agreement, the Option, to the extent vested, may be exercised by Optionee (a) by delivering to the Company an exercise notice in the form prescribed by the Company specifying the number of whole shares of Common Stock to be purchased and by accompanying such notice with payment therefor in full (or by arranging for such payment to the Company’s satisfaction) either (i) in cash, (ii) by delivery to the Company (either actual delivery or by attestation procedures established by the Company) of shares of Common Stock having an aggregate Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable pursuant to the Option by reason of such exercise, (iii) by authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount necessary to satisfy such obligation, (iv) except as may be prohibited by applicable law, in cash by a broker-dealer acceptable to the Company to whom Optionee has submitted an irrevocable notice of exercise or (v) by a combination of (i), (ii) and (iii), and (b) by executing such documents as the Company may reasonably request.  Any fraction of a share of Common Stock which would be required to pay such purchase price shall be disregarded and the remaining amount due shall be paid in cash by Optionee.  No certificate representing a share of Common Stock shall be issued or delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 4.1, have been paid.

2.4.Termination of Option.  In no event may the Option be exercised after it terminates as set forth in this Section 2.4.  The Option shall terminate, to the extent not earlier terminated pursuant to Section 2.2 or exercised pursuant to Section 2.3, on the Expiration Date.  Upon the termination of the Option, the Option and all rights hereunder shall immediately become null and void.

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3.Transfer Restrictions and Investment Representations. 

3.1.Nontransferability of Option.  The Option may not be transferred by Optionee other than by will or the laws of descent and distribution or pursuant to the designation of one or more beneficiaries on the form prescribed by the Company.  Except to the extent permitted by the foregoing sentence, (i) during Optionee’s lifetime the Option is exercisable only by Optionee or Optionee’s legal representative, guardian or similar person and (ii) the Option may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process.  Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Option, the Option and all rights hereunder shall immediately become null and void.

3.2.Investment Representation.  Optionee hereby represents and covenants that (a) any shares of Common Stock purchased upon exercise of the Option will be purchased for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), unless such purchase has been registered under the Securities Act and any applicable state securities laws; (b) any subsequent sale of any such shares shall be made either pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws; and (c) if requested by the Company, Optionee shall submit a written statement, in a form satisfactory to the Company, to the effect that such representation (x) is true and correct as of the date of any purchase of any shares hereunder or (y) is true and correct as of the date of any sale of any such shares, as applicable.  As a further condition precedent to any exercise of the Option, Optionee shall comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance or delivery of the shares and, in connection therewith, shall execute any documents which the Board or the Committee shall in its sole discretion deem necessary or advisable.

4.Additional Terms and Conditions.    

4.1.Withholding Taxes.  (a)As a condition precedent to the issuance of Common Stock following the exercise of the Option, Optionee shall, upon request by the Company, pay to the Company in addition to the purchase price of the shares, such amount as the Company may be required, under all applicable federal, state, local or other laws or regulations, to withhold and pay over as income or other withholding taxes (the “Required Tax Payments”) with respect to such exercise of the Option.  If Optionee shall fail to advance the Required Tax Payments after request by the Company, the Company may, in its discretion, deduct any Required Tax Payments from any amount then or thereafter payable by the Company to Optionee.

(b)Optionee may elect to satisfy his or her obligation to advance the Required Tax Payments by any of the following means:  (i) a cash payment to the Company; (ii) delivery to the Company (either actual delivery or by attestation procedures established by the Company) of previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the date on which such withholding obligation arises (the “Tax Date”), equal to the Required Tax Payments; (iii) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered to Optionee upon exercise of the Option having an aggregate Fair Market Value, determined as of the Tax Date, equal to the Required Tax Payments; (iv) except as may be prohibited by applicable law, a cash payment by a broker-dealer acceptable to the Company to whom Optionee has submitted an irrevocable notice of exercise or (v) any combination of (i), (ii) and (iii).  Shares of Common Stock to be delivered or withheld may not have a Fair Market Value in excess of the minimum amount of the Required Tax Payments.  Any fraction of a share of Common Stock which would be required to satisfy any such obligation shall be disregarded and the remaining amount due shall be paid in cash by Optionee.  No share of Common Stock or certificate representing a share of Common Stock shall be issued or delivered until the Required Tax Payments have been satisfied in full.

4.2.Adjustment.  In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation) that causes the per share value of shares of Common Stock to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary dividend, the number and class of securities subject to the Option and the Exercise Price shall be equitably adjusted by the Committee, such adjustment to be made in 

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accordance with Section 409A of the Code.  In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) to prevent dilution or enlargement of rights of participants.  The decision of the Committee regarding any such adjustment shall be final, binding and conclusive.   

4.3.Compliance with Applicable Law.  The Option is subject to the condition that if the listing, registration or qualification of the shares subject to the Option upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the purchase or issuance of shares hereunder, the Option may not be exercised, in whole or in part, and such shares may not be issued, unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company.  The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent, approval or other action.

4.4.Issuance or Delivery of Shares.  Upon the exercise of the Option, in whole or in part, the Company shall issue or deliver, subject to the conditions of this Agreement, the number of shares of Common Stock purchased against full payment therefor.  Such issuance shall be evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company.  The Company shall pay all original issue or transfer taxes and all fees and expenses incident to such issuance, except as otherwise provided in Section 4.1.

4.5.Option Confers No Rights as Stockholder.  Optionee shall not be entitled to any privileges of ownership with respect to shares of Common Stock subject to the Option unless and until such shares are purchased and issued upon the exercise of the Option, in whole or in part, and Optionee becomes a stockholder of record with respect to such issued shares.  Optionee shall not be considered a stockholder of the Company with respect to any such shares not so purchased and issued.

4.6.Option Confers No Rights to Continued Employment.  In no event shall the granting of the Option or its acceptance by Optionee, or any provision of this Agreement or the Plan, give or be deemed to give Optionee any right to continued employment by the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate of the Company to terminate the employment of any person at any time.

4.7.Decisions of Board or Committee.  The Board or the Committee shall have the right to resolve all questions which may arise in connection with the Option or its exercise.  Any interpretation, determination or other action made or taken by the Board or the Committee regarding the Plan or this Agreement shall be final, binding and conclusive.

4.8.Successors.  This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of Optionee, acquire any rights hereunder in accordance with this Agreement or the Plan.

4.9.Notices.  All notices, requests or other communications provided for in this Agreement shall be made, if to the Company, to CytomX Therapeutics, Inc., Attn: Chief Financial Officer, 343 Oyster Point Blvd., Suite 100, South San Francisco, CA 94080, and if to Optionee, to the last known mailing address of Optionee contained in the records of the Company.  All notices, requests or other communications provided for in this Agreement shall be made in writing either (a) by personal delivery, (b) by facsimile or electronic mail with confirmation of receipt, (c) by mailing in the United States mails or (d) by express courier service.  The notice, request or other communication shall be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile or electronic mail transmission or upon receipt by the party entitled thereto if by United States mail or express courier service; provided, however, that if a notice, request or other communication sent to the Company is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of the Company.

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4.10.Governing Law. This Agreement, the Option and all determinations made and actions taken pursuant hereto and thereto, to the extent not governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws. 

4.11.Agreement Subject to the Plan.  This Agreement is subject to the provisions of the Plan, including Section 5.8 of the Plan with respect to a Change in Control, and shall be interpreted in accordance therewith.  In the event that the provisions of this Agreement and the Plan conflict, the Plan shall control.  The Optionee hereby acknowledges receipt of a copy of the Plan.

4.12.Entire Agreement.  This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest except by means of a writing signed by the Company and the Optionee.  

4.13.Partial Invalidity.  The invalidity or unenforceability of any particular provision of this Agreement shall not effect the other provisions hereof and this Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted.

4.14.Amendment and Waiver.  The provisions of this Agreement may be amended or waived only by the written agreement of the Company and the Optionee, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.

4.15.Counterparts.  The Award Notice may be executed in two counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same instrument.

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