Document:

EXHIBIT 10.34

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

Termination Agreement

 

This Termination Agreement (this “Termination Agreement”) effective as of May 2, 2011 (the “Termination Date”) is by and between RIGEL PHARMACEUTICALS, INC., 1180 Veterans Boulevard, South San Francisco, California 94080, a corporation organized under the laws of the state of Delaware, United States of America (“RIGEL”), and PFIZER INC., a corporation organized under the laws of the State of Delaware, United States of America, 235 East 42nd Street, New York, New York, 10017, U.S.A. (“PFIZER”).

 

WHEREAS, on January 18, 2005, PFIZER and RIGEL entered into the Collaborative Research and License Agreement (the “License Agreement”);

 

WHEREAS, PFIZER and RIGEL now desire to terminate the License Agreement, all on the terms and conditions set forth in this Termination Agreement;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements provided herein, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by both parties, RIGEL and PFIZER hereby agree as follows:

 

1.                                       DEFINITIONS.  For purposes of this Termination Agreement, the following definitions shall be applicable:

 

1.1                                 “Affiliate” shall have the meaning set forth in the License Agreement.

 

1.2                                 “Materials” means the materials, active pharmaceutical ingredients, formulations, clinical trial material or Product containing the Compound, R343, as such Materials exist as of the Termination Date  that are referenced on Exhibit A.

 

1.3                                 “Person” shall mean an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture or similar entity or organization, including a government or political subdivision, department or agency of a government.

 

1.4                                 “Product” shall have the meaning set forth in the License Agreement.

 

1.5                                 “Product Documents” shall mean the data and documents set forth on Exhibit B, as such Exhibit B may be amended pursuant to Section 3.2.

 

Any defined terms contained in this Termination Agreement that are not defined hereunder shall have the meaning assigned to those terms in the License Agreement.

 

 

2.                                       TERMINATION.  Effective as of the Termination Date, the License Agreement, and all rights and obligations of both parties under Section 5.1 of the License Agreement are hereby terminated.

 

3.                                       LICENSES; ASSIGNMENT.

 

3.1                                 Patents and Know-How.  Pfizer hereby assigns to Rigel those Pfizer Patents described on Exhibit C, attached.  To the extent not assigned, subject to the terms and conditions of this Termination Agreement and the provisions of Section 9.5(iv) of the License Agreement, PFIZER hereby grants to RIGEL, an exclusive, perpetual, royalty-free license (with the right to grant sublicenses) and to enforce the patents and patent applications, under Pfizer Patents and Pfizer Know-How, to make, have made, use, import, offer for sale and sell, Compounds (as defined as of the Effective Date) and Products comprising the Compounds, for any mode of administration and any indication.  No license is implied beyond the scope specifically granted above.

 

3.2                                 Transfer of Product Documents.  Pfizer shall transfer to Rigel the Product Documents in accordance with the terms of this Agreement.   Rigel shall have the right to use the Product Documents and the information contained therein as it sees fit in the development and commercialization of products.  Pfizer shall have no liability whatsoever for the inaccuracy or incompleteness of the Product Documents.  Rigel shall have no liability to reimburse Pfizer with respect to expenses incurred in transferring such Product Documents, other than for out-of-pocket expenses.  During [ * ] following the Termination Date the parties agree to discuss in good faith (to the extent [ * ]) whether any additional data and documents that PFIZER may have in its possession that would fulfill the definition Product Documents under Section 9.5(a)(ii) of the License Agreement should be included as Product Documents (as defined hereunder), and to amend Exhibit B to add such data and documents as appropriate.

 

3.3                                 Transfer of Materials.  PFIZER shall transfer to RIGEL the Materials and hereby grants to Rigel the right to use the Materials as RIGEL sees fit in the development and commercialization of products.  It is understood that this right to use the Materials is subject to the limitations of Section 9.5(iv) of the License Agreement and Section 3.1 of this Termination Agreement.  PFIZER shall have no liability whatsoever for the quality or suitability for use of such Materials.  Rigel shall reimburse PFIZER all reasonable expenses incurred in connection with the shipment of the Materials to the destination requested by RIGEL.

 

3.4                                 [ * ].  [ * ] hereby agrees, subject to the conditions set forth hereunder, that it will [ * ] or [ * ] for [ * ] and [ * ].  In addition, [ * ] hereby agrees, subject to the conditions set forth hereunder, that it will [ * ] or [ * ] or [ * ] for [ * ] (a) [ * ] in [ * ], expressly excluding [ * ] of the [ * ] (unless [ * ] in [ * ] is [ * ]), and (b) [ * ] in [ * ], but not including, [ * ], provided, however, that [ * ] exclude [ * ], and any [ * ] that would [ * ] (unless [ * ] is [ * ]).  The [ * ] do not apply to [ * ] or [ * ] other than [ * ] and [ * ] expressly described herein.   The foregoing [ * ] applies to [ * ] or [ * ], and does not extend to [ * ] or [ * ].  [ * ] understands and agrees that [ * ] regarding [ * ] and [ * ], including [ * ] and [ * ], to the extent [ * ] as of the Termination Effective Date, are [ * ] and except as provided hereunder, subject to [ * ] under the License Agreement.

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

4.                                       TRANSITION.

 

4.1                                 Transition Manager.  PFIZER and RIGEL have each appointed a person to oversee and manage the transition of the Product Documents and Materials (each a “Transition Manager”, and such transition, the “Transition”).  RIGEL’s Transition Manager is [ * ], and PFIZER’s Transition Manager is [ * ].  Each party’s Transition Manager, shall be the primary contact for each party with respect to such Transition activities, and PFIZER and RIGEL agree, to the extent not prepared by the Termination Date, to work together in good faith to prepare an activity plan (the “Transition Plan”) that includes a detailed plan of execution of the transfer by PFIZER to RIGEL of the Product Documents either as hard copy, electronic copy (either data room, FTP or DVD) or a combination of both, and to transfer to RIGEL the Materials.  The Transition Plan shall incorporate the key elements set forth on Exhibit D, including a detailed timeline that ensures completion of the Transition by [ * ].

 

4.2                                 Access to Pfizer Personnel.  RIGEL acknowledges that [ * ] research and development of Compounds and Products will [ * ] after the Termination Date.  To the extent the Transition has not been completed by [ * ], RIGEL may contact each of the following individuals during a period ending the earlier of (a) [ * ] following the Termination Date and (b) the date when [ * ] is [ * ] (i.e. [ * ]) and [ * ], for the sole purpose of completing the Transition.  PFIZER will use reasonable efforts to ensure the named colleagues are available for Transition purposes during this time period on reasonable notice during normal business hours [ * ], however, if [ * ] is [ * ] and [ * ] following the Termination Date, and Rigel requests Transition assistance in that functional area, then Pfizer will use reasonable efforts to make available [ * ] to serve as Rigel’s contact for the Transition in such functional area.

 

CMC (Pharmaceutical  Sciences)- [ * ]

Clinical Trials — [ * ]

Toxicology — [ * ]

Non Clinical Pharmacology — [ * ]

Regulatory- [ * ]

Miscelaneous — [ * ]

 

Except as provided above, any additional Transition or consultations concerning the Compounds and Products will be provided at the sole discretion of PFIZER.

 

5.                                       RELEASE; DISCLAIMER; SURVIVAL.

 

5.1                                 RELEASE.  In consideration of the covenants and agreements contained herein, and on behalf of their Affiliates, successors, heirs, executors, administrators, and assigns, RIGEL hereby fully and forever releases and discharges PFIZER and its Affiliates, and PFIZER hereby fully and forever releases and discharges RIGEL and its Affiliates, from any and all claims, demands, liabilities, obligations, responsibilities, suits, actions and causes of action, known or unknown, past, present or future, or otherwise, arising out of or relating to the License Agreement or a party’s rights and obligations under the License Agreement; provided, however, that the foregoing release does not discharge any rights or obligations set forth in this Termination Agreement, including the surviving obligations of the License Agreement referenced in Section 5.2 hereunder.  The parties agree that this Termination Agreement is in full

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

and complete settlement of the rights and obligations of the parties in connection with the License Agreement.

 

5.2                                 Survival. The provisions of Articles, 8, 11 and Sections 5.2, 7.1 and 9.5(iv) of the License Agreement, together with any sections referenced in such surviving provisions to the extent to give them effect, shall survive this Termination Agreement.

 

5.3                                 Disclaimer of Liability.  IN NO EVENT SHALL ANY PARTY OR ANY OF ITS RESPECTIVE AFFILIATES BE LIABLE UNDER THIS AGREEMENT FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS OR REVENUE, SUFFERED BY PFIZER, RIGEL OR ANY OF THEIR RESPECTIVE REPRESENTATIVES, UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT OF ANY SUCH DAMAGES PAID TO A THIRD PARTY AS PART OF A THIRD PARTY CLAIM. ALL TRANSFERS HEREUNDER, INCLUDING THOSE WITH RESPECT TO THE REVERSIONS HEREUNDER, AND THE TRANSFER OF PRODUCT FILINGS, DOCUMENTS AND MATERIALS MADE HEREUNDER IS BEING MADE ON AN “AS IS” BASIS.  NEITHER PFIZER NOR ANY OF ITS AFFILIATES MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO ANY TRANSFERS, OR PATENT APPLICATIONS, RESULTING PATENTS, PRODUCT DOCUMENTS, MATERIALS OR ANY TECHNOLOGY RELATED THERETO, INCLUDING WITH RESPECT TO PATENTABILITY.  RIGEL EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT.

 

6.                                       MISCELLANEOUS.

 

6.1                                 Assignment.  Neither this Termination Agreement nor any interest hereunder shall be assignable by either party, without the prior written consent of the other party, which consent shall not be unreasonably withheld or delayed, except a party may make such an assignment without the other party’s consent to Affiliates or to a successor to substantially all of the business of such party to which this Termination Agreement relates, whether in merger, sale of stock, sale of assets or other transaction.  This Termination Agreement shall be binding upon the successors and permitted assigns of the parties, and the name of a party appearing herein shall be deemed to include the names of such party’s successors and permitted assigns to the extent necessary to carry out the intent of this Termination Agreement.  Any assignment not in accordance with this Section 6.1 shall be void.

 

6.2                                 Further Actions.  Each party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Termination Agreement.

 

6.3                                 Force Majeure.  Neither party shall be liable to the other for delay or failure in the performance of the obligations on its part contained in this Termination Agreement if and to the extent that such failure or delay is due to circumstances beyond its control which it could not have avoided by the exercise of reasonable diligence. It shall notify the other party promptly

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

should such circumstances arise, giving an indication of the likely extent and duration thereof, and shall use all commercially reasonable efforts to resume performance of its obligations as soon as practicable, provided, however, that neither party shall be required to settle any labor dispute or disturbance.

 

6.4                                 Notices.  Notices and other communications hereunder (including, without limitation, any notice of force majeure, breach, termination, change of address, etc.) shall be in writing and shall be deemed given if delivered personally or by facsimile transmission (receipt verified), mailed by registered or certified mail (return receipt requested), postage prepaid, or sent by nationally recognized express courier service, to the parties at the following addresses (or at such other address for a party as shall be specified by like notice, provided, however, that notices of a change of address shall be effective only upon receipt thereof):

 

	
If to RIGEL:
    	
 
    	
RIGEL PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
1180 Veterans Blvd.
    
	
 
    	
 
    	
South San Francisco, CA 94080
    
	
 
    	
 
    	
Attention:
    	
Dolly A. Vance, EVP, Corporate Affairs and General   Counsel
    
	
 
    	
 
    	
Facsimile:
    	
(650) 624-1133
    
	
 
    	
 
    	
 
    	
 
    
	
with a copy to:
    	
 
    	
RIGEL PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
1180 Veterans Blvd.
    
	
 
    	
 
    	
South San Francisco, CA 94080
    
	
 
    	
 
    	
Attention:
    	
Raul Rodriguez, President and COO
    
	
 
    	
 
    	
Facsimile:
    	
(650) 624-1133
    
	
 
    	
 
    	
 
    
	
If to PFIZER:
    	
 
    	
Pfizer Inc.
    
	
 
    	
 
    	
235 East 42nd Street
    
	
 
    	
 
    	
New York, New York 10017-5755
    
	
 
    	
 
    	
Attention:
    	
Executive Vice President and General Counsel
    
	
 
    	
 
    	
Facsimile:
    	
(212) 309-0874
    
	
 
    	
 
    	
 
    
	
with a copy to:
    	
 
    	
Pfizer Inc.
    
	
 
    	
 
    	
235 East 42nd Street
    
	
 
    	
 
    	
New York, New York 10017-5755
    
	
 
    	
 
    	
Attention:
    	
President, Worldwide Research & Development
    
	
 
    	
 
    	
Facsimile: (212) 309-0515
    

 

6.5                                 Amendment.  No amendment, modification or supplement of any provision of this Termination Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer of each party.

 

6.6                                 Waiver.  No provision of the Termination Agreement shall be waived by any act, omission or knowledge of a party or its agents or employees except by an instrument in writing expressly waiving such provision and signed by a duly authorized officer of the waiving party. The waiver by either of the parties of any breach of any provision hereof by the other party shall

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

not be construed to be a waiver of any succeeding breach of such provision or a waiver of the provision itself.

 

6.7                                 Severability.  If any clause or portion thereof in this Termination Agreement is for any reason held to be invalid, illegal or unenforceable, the same shall not affect any other portion of this Termination Agreement, as it is the intent of the parties that this Termination Agreement shall be construed in such fashion as to maintain its existence, validity and enforceability to the greatest extent possible. In any such event, this Termination Agreement shall be construed as if such clause of portion thereof had never been contained in this Termination Agreement, and there shall be deemed substituted therefor such provision as will most nearly carry out the intent of the parties as expressed in this Termination Agreement to the fullest extent permitted by applicable law.

 

6.8                                 Descriptive Headings.  The descriptive headings of this Termination Agreement are for convenience only, and shall be of no force or effect in construing or interpreting any of the provisions of this Termination Agreement.

 

6.9                                 Governing Law.  This Termination Agreement shall be governed by and interpreted in accordance with the substantive laws of the United States of America and the State of Delaware, without regard to conflict of law principles thereof.

 

6.10                           Entire Agreement of the Parties.  This Termination Agreement constitutes and contains the complete, final and exclusive understanding and agreement of the parties and cancels and supersedes any and all prior negotiations, correspondence, understandings and agreements, whether oral or written, among the parties respecting the subject matter hereof and thereof.

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

IN WITNESS WHEREOF the parties hereto have caused this Termination Agreement to be executed by their duly authorized officers effective as of the Termination Date.

 

 

	
RIGEL PHARMACEUTICALS, INC.
    	
 
    	
PFIZER INC.
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Raul R. Rodriguez
    	
 
    	
By:
    	
/s/ Douglas E. Giordano
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Raul R. Rodriguez
    	
 
    	
Douglas E. Giordano
    
	
 
    	
 
    	
 
    
	
President & Chief Operating Officer
    	
 
    	
Senior Vice President, Worldwide Business Development
    

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

Exhibit A

(Materials)

 

[ * ]

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

Exhibit B

(Product Documents)

 

[ * ]

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

Exhibit C

(PFIZER Patents)

 

THIS ASSIGNMENT is made the                 day of                 2011

 

BETWEEN:

 

(1)                                  PFIZER LIMITED, a company incorporated in England (registered number 526209) whose registered office is at Ramsgate Road, Sandwich, Kent CTl3 9NJ, United Kingdom (“the Assignor”); and

 

(2)                                  RIGEL PHARMACEUTICALS, INC., a Delaware Corporation with its offices at 1180 Veterans Boulevard, South San Francisco, California 94080, United States of America (the “Assignee”).

 

WHEREAS:

 

(A)                              The Assignor and Assignee are parties to a Collaborative Research and License Agreement dated 18 January 2005 (the “Agreement”).

 

(B)                                The Assignor is the applicant for, and beneficial owner of the patent applications listed in Schedule A (the “Applications”).

 

(C)                                In view of the termination of the Agreement, the Assignor has agreed to assign to the Assignee all of its right, title and interest in the Applications and any patents that may derive from them, together with reissuances, continuations, divisions, revisions, extensions, and reexaminations thereof.

 

IT IS AGREED as follows:

 

Section 1.  1. Assignment

 

In consideration of the sum of one pound (£1) now paid by the Assignee to the Assignor, the receipt of which is hereby acknowledged by the Assignor, the Assignor assigns to the Assignee absolutely all of its right, title and interest in the Applications and any patents that may derive from them, together with reissuances, continuations, divisions, revisions, extensions, and reexaminations thereof.

 

Section 2.  2. Assignor’s obligations

 

The Assignor agrees with the Assignee:

 

at the request and expense of the Assignee, to execute all documents and do such other acts and things that the Assignee may reasonably require in order for the Assignee to pursue the Applications.

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

Section 3.  3. Exclusion of warranty as to validity and infringement

 

The Assignor does not make any representation or give any warranty or undertaking that any patents that may be granted in respect of the Applications will be valid, or that any invention defined by the claims of the Applications does not infringe any valid and subsisting patent or other rights held by a third patty.

 

Section 4.  4. General

 

(a)                                  To the extent of any conflict between this Assignment and the Agreement, the Agreement shall control.

 

(b)                                 This Assignment shall be governed by and construed in accordance with the laws of England and the parties submit to the exclusive jurisdiction of the English Courts.

 

(c)                                  This document is one of two identical documents which are being executed concurrently, and either one of these documents shall be fully enforceable independent of the other.

 

EXECUTED by the parties:

 

 

	
Signed by:
    	
 
    	
 
    
	
For and on behalf of   PFIZER LIMITED
    	
 
    
	
 
    	
 
    	
 
    
	
Name(printed):
    	
 
    	
 
    
	
Title (printed):
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signed by:
    	
 
    	
 
    
	
For and on behalf of RIGEL   PHARMACEUTICALS, INC.
    	
 
    
	
 
    	
 
    
	
Name(printed):
    	
 
    	
 
    
	
Title (printed):
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

Schedule A

 

	
Country
    	
 
    	
Case Type
    	
 
    	
Filing
   Type
    	
 
    	
Natl Filing
   Date
    	
 
    	
Application
   Number
    	
 
    	
Application

Date
    	
 
    	
Sub Status
    	
 
    	
Agent
    
	
[   * ]
    

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

 

EXHIBIT D

(Transition Plan)

 

· Pfizer shall complete transition of the Product Documents and Materials to Rigel by [ * ].

 

· Rigel and Pfizer may amend Exhibit B (Product Documents), as appropriate, during [ * ] following the Termination Date.

 

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.Exhibit 10.4

 

[CEO FOUR YEAR TIME-BASED INSTALLMENT VESTING FORM]

 

HCP, INC.

TERMS AND CONDITIONS APPLICABLE TO

TIME-BASED RESTRICTED STOCK UNITS

GRANTED UNDER THE 2006 PERFORMANCE INCENTIVE PLAN

 

These Terms and Conditions (“Terms”) apply to certain time-based restricted stock units granted by HCP, Inc., a Maryland corporation (the “Company”), pursuant to the HCP, Inc. 2006 Performance Incentive Plan, as amended and/or restated from time to time (the “Plan”).  If you were granted an award of time-based restricted stock units by the Company, the date of grant (the “Grant Date”) of your time-based restricted stock units (your “Units”) and the total number of shares of Common Stock with respect to your Units are set forth in the letter from the Company announcing your Unit grant (your “Grant Letter”) and are reflected in the electronic stock plan award recordkeeping system (the “Stock Plan System”) maintained by the Company or its designee.  These Terms apply to your Units if referenced in your Grant Letter and/or the Stock Plan System with respect to your Units.  If you were granted Units, you are referred to as the “Grantee” with respect to your Units.  Capitalized terms not defined herein shall have the meanings assigned to such terms in the Plan.

 

The Units are subject to adjustment as provided in Section 7.1 of the Plan.  The Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board”) is the administrator of the Plan for purposes of your Units.  The Units are subject to all of the terms and conditions set forth in these Terms, and are further subject to all of the terms and conditions of the Plan, as it may be amended from time to time, and any rules adopted by the Committee, as such rules are in effect from time to time.

 

I.              Vesting.

 

(a)           Vesting of Units.  Subject to the terms and conditions of these Terms, your Units shall vest and become nonforfeitable in accordance with the following schedule, subject to your continuous service to the Company until the applicable vesting date.  (Vesting amounts pursuant to the following schedule are cumulative.)

 

	
Tranche
    	
 
    	
Percentage of Units that Vest
    	
 
    	
Vesting Date
    
	
1
    	
 
    	
25%
    	
 
    	
1st Anniversary of Grant Date
    
	
2
    	
 
    	
25%
    	
 
    	
2nd Anniversary of Grant Date
    
	
3
    	
 
    	
25%
    	
 
    	
3rd Anniversary of Grant Date
    
	
4
    	
 
    	
25%
    	
 
    	
4th Anniversary of Grant Date
    

 

The vesting schedule requires continued employment through each applicable Vesting Date as a condition to vesting of the applicable Tranche and the corresponding rights and benefits under these Terms.  Unless otherwise expressly provided herein with respect to accelerated vesting of the Units under certain circumstances, employment 

 

1

 

for only a portion of a vesting period, even if a substantial portion, will not entitle you to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment as provided in these Terms.

 

(b)           Acceleration on Certain Terminations of Employment.  If at any time prior to the date your Units become fully vested in accordance with Section I(a), your employment with the Company is terminated as a result of (i) your death, Disability or Retirement, (ii) a Termination Other Than For Cause, (iii) a Termination For Good Reason, or (iv) a Termination Upon a Change in Control (including a Covered Resignation), your then outstanding Units (to the extent not previously forfeited and otherwise unvested) shall fully vest immediately upon such termination of employment.  For purposes of these Terms, the terms “Covered Resignation,” “Disability,” “Termination Other Than For Cause,” “Termination for Good Reason” and “Termination Upon a Change in Control” shall have the meanings ascribed to such terms in your Amended and Restated Employment Agreement with the Company dated April 24, 2008 (the “Employment Agreement”).  Such meanings shall continue to apply for purposes of these Terms notwithstanding any termination of the “Employment Period” (as such term is defined in the Employment Agreement) in accordance with the Employment Agreement.  For purposes of these Terms, “Retirement” means a termination of your employment with the Company or any of its Subsidiaries after you have either (i) attained age 65 and completed at least five (5) years of service as an employee of the Company or any of its Subsidiaries or as a member of the Board or (ii) attained age 60 and completed at least fifteen (15) years of service as an employee of the Company or any of its Subsidiaries or as a member of the Board.

 

(c)           No Acceleration or Vesting Upon Other Terminations.  Except as otherwise provided in the Plan, if at any time your employment with the Company is terminated (i) by the Company, or (ii) by you, under any circumstances (other than as a result of your death, Disability, Retirement, a Termination Other Than For Cause, a Termination For Good Reason, or a Termination Upon a Change in Control, including a Covered Resignation), any of your Units that remain outstanding and otherwise unvested at the time of such termination of employment shall be automatically forfeited and cancelled in full, effective as of such termination of employment and these Terms shall be null and void and of no further force and effect.

 

(d)           Employment Termination Date.  If the Employment Period is in effect, the date of your termination of employment for purposes of these Terms shall be no earlier than the “Date of Termination,” as such term is defined in the Employment Agreement.  If the Employment Period is not then in effect, the date of termination of your termination of employment for purposes of these Terms shall be your actual date of termination of employment.

 

II.            Timing and Form of Payment.

 

(a)           Distribution Date.  The distribution date (the “Distribution Date”) for your Units that become vested pursuant to these Terms will be the scheduled Vesting Date of such Units as set forth in Section I(a) hereof; provided, however, that in the event that the vesting of your Units is accelerated pursuant to Section I(b), the Distribution Date of such accelerated Units will be the earlier of (i) subject to Section XIII, your Separation from Service and (ii) the scheduled Vesting Date of such Units as set forth in Section I(a) hereof.  Distribution of your vested Units will be made by the Company in shares of Common Stock (on a one-to-one basis) 

 

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on or as soon as practicable after the Distribution Date with respect to such vested Units, but in no event later than two and one-half (2 1⁄2) months after the Distribution Date.  You will have no right to distribution of any of your Units that do not vest in accordance with the provisions hereof.  Once a vested Unit has been paid pursuant to these Terms, you will have no further rights with respect to that Unit.  For purposes of these Terms, “Separation from Service” means a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder (i.e., generally a termination of your employment with the Company or a Subsidiary).

 

(b)           Change in Control.  Notwithstanding the foregoing provisions of this Section II, the Administrator may provide for payment of your vested Units in accordance with the requirements of Treasury Regulation 1.409A-3(j)(4)(ix)(A), (B) or (C) promulgated under Section 409A of the Code (or any similar successor provision), which regulation generally provides that a deferred compensation arrangement may be terminated in limited circumstances following a dissolution or change in control of the Company.

 

III.           Dividend Equivalent Rights.  During such time as each Unit remains outstanding and prior to the distribution of such Unit in accordance with Section II, you will have the right to receive, with respect to such Unit, an amount equal to the amount of any cash dividend paid on a share of Common Stock (a “Dividend Equivalent Right”).  You will have a Dividend Equivalent Right with respect to each Unit that is outstanding on the record date of such dividend, and such Dividend Equivalent Rights will be paid to you in cash (without interest) at the same time or within thirty (30) days after the related dividend is paid to stockholders of the Company.  Dividend Equivalent Rights will not be paid to you with respect to any Units that are forfeited pursuant to Section I, effective as of the date such Units are forfeited.  You will have no Dividend Equivalent Rights as of the record date of any such cash dividend in respect of any Units that have been paid in Common Stock; provided that you are the record holder of such Common Stock on or before such record date.

 

IV.           Transferability.  No benefit payable under, or interest in, the Units or these Terms shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge and any such attempted action shall be void and no such benefit or interest shall be, in any manner, liable for, or subject to, your or your beneficiary’s debts, contracts, liabilities or torts; provided, however, nothing in this Section IV shall prevent transfer of your Units by will or by applicable laws of descent and distribution.  You may designate a beneficiary to receive distribution of your vested Units upon your death by submitting a written beneficiary designation to the Committee in the form provided to you as part of your Grant Letter.  You may revoke a beneficiary designation by submitting a new beneficiary designation.

 

V.            Withholding.  Subject to Section 8.1 of the Plan and such rules and procedures as the Committee may impose, upon any distribution of shares of Common Stock in respect of your Units, the Company shall automatically reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole shares, valued at their then fair market value (with the “fair market value” of such shares determined in accordance with the applicable provisions of the Plan), to satisfy any withholding obligations of the Company or its Subsidiaries with respect to such distribution of shares at the minimum applicable withholding rates; provided, however, that the foregoing provision shall not apply in the event that you have made 

 

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other provision in advance of the date of such distribution for the satisfaction of such withholding obligations.  In the event that the Company cannot legally satisfy such withholding obligations by such reduction of shares, or in the event of a cash payment or any other withholding event in respect of your Units, the Company (or a Subsidiary) shall be entitled to require a cash payment by you or on your behalf and/or to deduct from other compensation payable to you any sums required by federal, state or local tax law to be withheld with respect to such distribution or payment.

 

VI.           No Contract for Employment.  These Terms, the Grant Letter and the Stock Plan System are not an employment or service contract and nothing in these Terms, the Grant Letter or the Stock Plan System shall be deemed to create in any way whatsoever any obligation on your part to continue in the employ or service of the Company, or of the Company to continue your employment or service with the Company.

 

VII.          Notices.  Any notices provided for in these Terms, the Grant Letter, the Stock Plan System or the Plan, including a Distribution Election, shall be given in writing and shall be deemed effectively given upon receipt if delivered by hand or, in the case of notices delivered by United States mail, five (5) days after deposit in the United States mail, postage prepaid, addressed, as applicable, to the Company or if to you, at such address as is currently maintained in the Company’s records or at such other address as you hereafter designate by written notice to the Company.

 

VIII.        Plan.  The provisions of the Plan are hereby made a part of these Terms.  In the event of any conflict between the provisions of these Terms, the Grant Letter, the Stock Plan System and those of the Plan, the provisions of these Terms shall control.

 

IX.           Entire Agreement.  These Terms and the Grant Letter, together with the Employment Agreement, contain the entire understanding of the parties in respect of the Units and supersede upon their effectiveness all other prior agreements and understandings between the parties with respect to the Units.  In the event of any discrepancy between these Terms, the Grant Letter and the Employment Agreement, the Employment Agreement shall control, except the definition of “Distribution Date” in these Terms shall always control.

 

X.            Amendment.  These Terms may be amended by the Committee; provided, however that no such amendment shall, without your prior written consent, alter, terminate, impair or adversely affect your rights under these Terms.

 

XI.           Governing Law.  These Terms shall be construed and interpreted, and the rights of the parties shall be determined, in accordance with the laws of the State of Maryland, without regard to conflicts of law provisions thereof.

 

XII.         Tax Consequences.  You may be subject to adverse tax consequences as a result of the issuance, vesting and/or distribution of your Units and the payment of your Dividend Equivalent Rights.  YOU ARE ENCOURAGED TO CONSULT A TAX ADVISOR AS TO THE TAX CONSEQUENCES OF YOUR UNITS AND SUBSEQUENT DISTRIBUTION OF COMMON STOCK AND THE TAX CONSEQUENCES OF YOUR DIVIDEND EQUIVALENT RIGHTS.

 

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XIII.        Construction.  To the extent that these Terms are subject to Section 409A of the Code, you and the Company agree to cooperate and work together in good faith to timely amend these Terms to prevent application of the penalty and interest provisions of Section 409A(a)(1)(B) of the Code.  In the event that you and the Company do not agree as to the necessity, timing or nature of a particular amendment intended to prevent application of the penalty and interest provisions of Section 409A(a)(1)(B) of the Code, reasonable deference will be given to your reasonable interpretation of such provisions.  Notwithstanding anything to the contrary contained in these Terms or the Plan, in the event that (i) the Distribution Date (as determined under Section II) of any of your vested Units is the date of your Separation from Service and (ii) you are at the time of such Separation from Service a “specified employee” (within the meaning of Section 409A of the Code), the Distribution Date of such vested Units shall be the earlier of the date that is six (6) months after your Separation from Service or the date of your death, provided that this sentence shall only apply if and to the extent required to avoid the imputation of any tax, penalty or interest under Section 409A.

 

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