Document:

Exhibit

Exhibit 10.1
AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT
This Amended and Restated Change in Control Agreement (this “Agreement”) is dated [DATE], and is by and between HALOZYME THERAPEUTICS, INC., a Delaware corporation (the “Company,” “us,” “we” or “our”), and [EXECUTIVE NAME] (“you” or “your”).
WHEREAS, the Board of Directors of the Company (the “Board”) considers it essential to foster the continued employment of key executives and believes it is in the best interests of the Company and its stockholders to have your continued dedication, notwithstanding the possibility, threat or occurrence of a Change in Control of the Company (as defined below).
NOW, THEREFORE, in consideration of the mutual covenants contained in this agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1.“At Will” Employment. You agree that you will continue to be an “at-will” employee, as defined under applicable law, of the Company or of the Company’s operating subsidiary, Halozyme, Inc.  As such, your employment may be terminated at any time for any or no reason without liability, except as otherwise provided in this Agreement or any other employee benefit plan in which you participate immediately before your termination of employment. Nothing in this Agreement confers on you any right to continued employment or restricts our right to terminate your employment at any time for any or no reason.
2.    Change in Control Termination.
(a)    Payments and Benefits. In the event that (1) we terminate your employment without Cause, (2) you resign for Good Reason, or (3) your employment terminates due to your death or Disability, in each case on or within 12 months after a Change in Control (as each capitalized term is defined below), we shall provide you the following payments and benefits:
(i)    Your annual base salary earned through the date of termination and any vested accrued benefits, to the extent not previously paid or deferred as of the date of termination under a tax-qualified or nonqualified deferred compensation arrangement, to be paid in a lump sum within the time periods mandated by applicable law after your termination of employment (“Accrued Obligations”);
(ii)    Subject to Section 2(b) below, an amount equal to [●]1 times the sum of (A) your then-current annual base salary and (B) the amount of your target annual bonus opportunity (based on the target percentage of your annual base salary) in respect of the year in which your employment terminates, in each case as determined without regard to any diminution thereof that may give rise to Good Reason, to be paid in a lump sum no later than eight (8) days after your Release  
_______________________
1  In the case of the CEO, 2.0; in the case of all other Executives, 1.5.

(as defined below) becomes effective; provided, that if the maximum period during which you could execute and subsequently revoke the Release spans two calendar years, then payment shall not be made prior to the first day of the second calendar year regardless of when your Release actually becomes effective;
(iii)    Subject to Section 2(b) below, an amount equal to 1.5 times the cost of [●]2 months of your monthly medical premiums (including the employee and employer portions for you and, if applicable, your spouse and eligible dependents), if any, under the Company’s group health plans in which you (or they) participated immediately prior to the date of termination; and
(iv)    Subject to Section 2(b) below, we shall cause 100% of all equity awards outstanding as of the date of termination to become fully vested and nonforfeitable upon your termination of employment and otherwise exercisable in accordance with the terms of the applicable equity plan and award agreement pursuant to which such awards were granted; provided, that with respect to any such equity award the vesting of which is based (immediately prior to the date of termination) in whole or in part upon the achievement of performance goals, the numbers of shares or units that become fully vested shall be determined based upon the greater of (x) the target performance level applicable under the award and (y) the actual performance level achieved under the terms of the award through the date of termination.
(v)    Notwithstanding anything to the contrary in this Agreement, if we terminate your employment without Cause, or if you resign for Good Reason, before a Change in Control, and if you reasonably demonstrate that your termination of employment (A) was at the request of a third party who has taken steps reasonably calculated to effect the Change in Control or (B) otherwise arose in connection with or anticipation of the Change in Control, then for purposes of this Section 2(a), your termination of employment will be deemed to have occurred on the effective date of the Change in Control.
(b)    Release. You agree that any payment or benefit provided under this Agreement pursuant to Section 2(a)(ii), (iii) and (iv) hereof and not otherwise required by law is conditioned upon your execution and delivery to us of a general release of claims (a “Release”) substantially in the form attached hereto as Exhibit A within 21 days (or 45 days in the case of a reduction in force) following the date of your termination of employment and your nonrevocation of the Release during the seven-day period following its execution. If you do not timely execute the Release, if you fail to timely deliver the executed Release or if you effectively revoke the Release within seven days following its execution, you will automatically forfeit any right to receive the payments and benefits provided under this Agreement pursuant to Section 2(a)(ii), (iii) and (iv) hereof.
_______________________
2  In the case of the CEO, 24; in the case of all other Executives, 18.

    

(c)    Cause. “Cause” means, solely for purposes of this Agreement as determined in good faith by the Board, which determination will be conclusive, your:
(i)    conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude;
(ii)    fraud with respect to, or misappropriation of, any funds or property of the Company, or any subsidiary, customer or vendor; 
(iii)    illegal use or illegal distribution of controlled substances;
(iv)    willful violation of any material written rule, regulation, procedure or policy of the Company applicable to you that results in demonstrable harm to the Company, as determined by the Board in good faith; or
(v)    material breach of any material provision of any employment, nondisclosure, nonsolicitation or other similar material agreement executed by you for the benefit of the Company that results in demonstrable harm to the Company, as determined by the Board in good faith.
(d)    Change in Control. A Change in Control shall be deemed to have occurred if any of the following shall have occurred:
(i)    any Person becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of either (A) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that, for purposes of this definition of Change in Control, the following acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company, (2) any acquisition by the Company, (3) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its affiliates or (4) any acquisition pursuant to a transaction that complies with clauses (iii)(A), (iii)(B) and (iii)(C) of this definition of Change in Control;
(ii)    individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;
(iii)    consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Company or any of its subsidiaries, a sale or 

    

other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or securities of another entity by the Company or any of its subsidiaries (each, a “Business Combination”), in each case unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, at least fifty percent (50%) of the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, fifty percent (50%) or more of, respectively, the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
(iv)    approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
In construing this definition of Change in Control, a “Person” means any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, other than employee benefit plans sponsored or maintained by the Company and by entities controlled by the Company or an underwriter of the stock of the Company in a registered public offering.
(e)    Code. “Code” means, solely for purposes of this Agreement, the United States Internal Revenue Code of 1986, as amended.
(f)    Disability. “Disability” means, solely for purposes of this Agreement, “disability,” as such or similar term is defined under the Company’s long-term disability plan as in effect at the relevant time.
(g)    Good Reason. “Good Reason” means, solely for purposes of this Agreement, without your consent, any of the following conditions:
(i)    any diminution in your annual base salary or annual target bonus opportunity (as a percentage of your annual base salary);

    

(ii)    a material diminution in your title, position, duties or responsibilities, or the assignment to you of duties that are materially inconsistent with the scope of duties and responsibilities associated with your position immediately before the Change in Control;  
(iii)    a material diminution in the authority, duties or responsibilities of the supervisor to whom you are required to report;
(iv)    a material diminution in the budget over which you retain authority;
(v)    any requirement by the Company that you physically relocate from your current work location to another work location 30 or more miles away; or
(vi)    any other action or inaction that constitutes a material breach by us of our obligations under this Agreement;
so long as you notify us no later than 90 days after the existence of any of these conditions and we fail to cure the condition within 30 days after receipt of the notice. Notwithstanding the foregoing, no Good Reason exists unless your termination of employment occurs no later than one year after the initial existence of any condition listed in this Section 2(g). 
3.    Performance Awards upon CIC.  The following shall apply with respect to all equity awards the vesting of which is based in whole or in part upon the achievement of performance goals that are outstanding as of the effective date of a Change in Control (such awards, “Performance Awards”): (i) the numbers of shares or units subject to the Performance Award shall be determined based upon the greater of (x) the target performance level applicable under the Performance Award and (y) the actual performance level achieved under the terms of the Performance Award through the effective date of the Change in Control; (ii) unless fully paid and settled in connection with the Change in Control, the resulting number of Performance Award shares or units determined under Section 3(i) above shall remain outstanding, with the number and kind of shares or units adjusted to reflect the Change in Control in accordance with the terms of the applicable equity plan, and (iii) any applicable service-based vesting requirement shall continue to apply on the same basis as originally provided under the Performance Award, subject to Section 2(a)(iv) above with respect to the vesting of equity awards upon certain terminations of employment in connection with a Change in Control.
4.    Exclusivity of Payments and Benefits. This Agreement supersedes all prior agreements you may have with us regarding compensation or benefits that may become payable in connection with a change in control of the Company (whether or not the change in control constitutes a Change in Control), including any provision contained in any employment agreement, offer letter or change-in-control agreement, or in any equity incentive plan or equity award agreement. In addition, in the event of any conflict between the terms of this Agreement and the terms of any equity incentive plan or equity award agreement governing any outstanding equity award granted to you, whether on, prior to or following the date hereof, the terms of this Agreement shall supersede and control with respect to such equity award. You acknowledge and agree that any payments received pursuant to this Agreement shall be in lieu of any payments the Company would otherwise make to you under the Company’s general severance policy, as such policy may be revised, amended or administered from time to time. Except as otherwise provided in this Section 4, nothing in this Agreement will prevent 

    

or limit your continuing or future participation in any Company plan, policy or practice for which you may qualify.
5.     Limitation on Payments and Benefits.
(a)    Tax Liability. You shall bear all expense of, and be solely responsible for, all federal, state, local or non-U.S. taxes due with respect to any payment received under this Agreement, including, without limitation, any excise tax imposed by Code Section 4999.
(b)    Modified Cutback Rule. Notwithstanding anything to the contrary in this Agreement, if any payment or benefit to be paid under this Agreement (“Contract Payments”), together with any other payment or benefit that you have the right, in connection with a Change in Control or the termination of your employment, to receive from us or from any entity that is a member of an “affiliated group” (as defined under Code Section 1504(a) without regard to Code Section 1504(b)) of which we are a member, including, without limitation, any restricted stock, stock option or similar right, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (collectively with the Contract Payments, the “Total Payments”), constitutes an “excess parachute payment” (as defined under Code Section 280G(b)), the Total Payments will be reduced to the minimum extent necessary to prevent any portion of the Total Payments from becoming nondeductible by the Company under Code Section 280G or subject to the excise tax imposed under Code Section 4999, but only if, by reason of such reduction, the net after-tax benefit received by you would exceed the net after-tax benefit that you would receive if no such reduction was made. For this purpose, “net after-tax benefit” means (i) the value of the Total Payments which you receive or are then entitled to receive from the Company that would constitute “excess parachute payments” within the meaning of Code Section 280G (the “Excess Parachute Payments”), less (ii) the sum of (A) the amount of all U.S. federal, state and local income taxes payable with respect to the Excess Parachute Payments, calculated at the maximum marginal income tax rate for each year in which the Excess Parachute Payments shall be paid to you (based on the rate in effect for such year as set forth in the Code as in effect at the time of the first payment of an Excess Parachute Payment), and (B) the amount of excise taxes imposed with respect to the Excess Parachute Payments above by Code Section 4999 (or any successor provision thereto), any similar tax imposed by state or local law and any interest or penalties with respect to such excise tax(es).
(c)    Determination Process. The determination of whether it is necessary to decrease the Total Payments pursuant to Section 5(b) hereof shall be made in good faith by a nationally recognized accounting firm (the “Accounting Firm”) selected by the Company. This determination, together with supporting calculations and documentation, will be provided to the Company and you within forty-five (45) days after your final date of employment and will be conclusive and binding upon you and the Company, absent manifest error. Notwithstanding the foregoing, the determinations of the Accounting Firm shall be based upon methodologies and assumptions agreed between the Company and the Accounting Firm prior to the Change in Control and shall not be modified thereafter, absent a change in law or manifest error. We shall bear all fees of the Accounting Firm. If a reduction in the Total Payments is necessary, reduction shall occur in the following order: (i) first, by reducing or eliminating the portion of the Total Payments which are not payable in cash and are not attributable to equity awards (other than that portion of the Total Payments subject to clause (iii) hereof), (ii) second, by reducing or eliminating cash payments (other than that portion of the Total Payments 

    

subject to clause (iii) hereof), (iii) third, by reducing or eliminating the portion of the Payments which are not payable in cash and are attributable to equity awards and (iv) fourth, by reducing or eliminating the portion of the Payments (whether or not payable in cash) to which Treasury Regulation § 1.280G-1 Q/A 24(c) (or successor thereto) applies, in each case in reverse chronological order (i.e., beginning with payments or benefits which are to be paid furthest in the future).
(d)    Adjustments. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Company to you or for your benefit pursuant to this Agreement that should not have been so paid or distributed (“Overpayment”) or that additional amounts that will have not been paid or distributed by the Company to you or for your benefit pursuant to this Agreement could have been so paid or distributed (“Underpayment”), in each case, consistent with the calculation of any reduced Total Payments hereunder.  In the event that the Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against either the Company or you that the Accounting Firm believes has a high probability of success determines that an Overpayment has been made, you shall pay any such Overpayment to the Company together with interest; provided, however, that no amount shall be payable by you to the Company if and to the extent such payment would not either reduce the amount on which you are subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes.  In the event that the Accounting Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be paid promptly (and in no event later than 60 days following the date on which the Underpayment is determined) by the Company to you or for your benefit together with interest. Any interest payable hereunder will be based on the “prime rate” as published in The Wall Street Journal, such rate calculated as of the day that payment of Overpayment or Underpayment is made hereunder.
6.    Section 409A Compliance.
(a)    This Agreement is intended to comply with, or otherwise be exempt from, Code Section 409A (together with the Treasury Regulations and other agency guidance promulgated thereunder, “Code Section 409A”).
(b)    All provisions of this Agreement shall be administered, interpreted and construed in a manner consistent with the requirements to avoid the imposition of any additional tax, penalty or interest under Code Section 409A. 
(c)    If the Company determines in good faith that any provision of this Agreement would cause you to incur an additional tax, penalty or interest under Code Section 409A, the Company and you shall use reasonable efforts to reform such provision, if possible, in a mutually agreeable fashion to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Code Section 409A or causing the imposition of such additional tax, penalty or interest under Code Section 409A.
(d)     Notwithstanding anything herein to the contrary, however, the Company does not guarantee any particular tax effect to you under this Agreement, and we shall not be liable to you for any payment or benefit paid under this Agreement that is determined to result in an additional 

    

tax, penalty or interest under Code Section 409A, nor for reporting in good faith any payment or benefit made under this Agreement as an amount includible in gross income under Code Section 409A.
(e)    Any reimbursement of expenses of or any provision of in-kind benefits to you, as specified under this Agreement, is subject to the following conditions: (i) the expenses eligible for reimbursement or the amount of in-kind benefits provided in one taxable year do not affect the expenses eligible for reimbursement or the amount of in-kind benefits provided in any other taxable year, except for any medical reimbursement arrangement providing for the reimbursement of expenses referred to in Code Section 105(b); (ii) we shall reimburse an eligible expense no later than the end of the year after the year in which you incurred the expense; and (iii) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
(f)    “Termination of employment,” “resignation,” or words of similar import, as used in this Agreement means your “separation from service” (as defined under Code Section 409A) for purposes of any payment or benefit under this Agreement that is a payment of deferred compensation subject to Code Section 409A.
(g)    If a payment obligation under this Agreement arises on account your separation from service while you are a “specified employee” (as defined under Code Section 409A and determined in good faith by the Board), any payment of “deferred compensation” (as defined under Treasury Regulation § 1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation § 1.409A-1(b)(3) through (b)(12)) that is scheduled to be paid (whether in a lump sum or in installments) within 6 months after your separation from service will, to the extent required by Code Section 409A, be paid within 15 days after the end of the 6-month period beginning on the date of your separation from service or, if earlier, within 15 days after the appointment of the personal representative or executor of your estate following your death.  Any such amount shall, within five days after your separation from service, be contributed to the trustee of a “rabbi trust” (i.e., an unfunded arrangement designed to comply with Revenue Procedure 92-64), held by the trustee pursuant to the terms of such trust and paid to you in a lump sum, with interest (based on the “prime rate” as published in The Wall Street Journal, such rate calculated as of the first day that payments are made to you out of the trust).   
(h)    Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty days following the Termination Date”), the actual date of payment within the specified period shall be within the sole discretion of the Company. If under this Agreement, an amount is paid in two or more installments, each installment shall be treated as a separate payment.
7.    Successors. This Agreement is personal to you and may not be assigned other than by will or the laws of descent and distribution without our prior written consent. This Agreement inures to the benefit of and is enforceable by your representatives. Likewise, this Agreement inures to the benefit of and is binding upon the Company and its successors and assigns. The Company shall 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 expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would have 

    

been required to perform it if no such succession had taken place. As used in this Agreement, the term “Company” shall mean both the Company as defined above and any such successor or assignee.
8.    Notices. All notices and other communications hereunder must be in writing and must be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the employee: 
To the Company’s address of record for the employee.
If to the Company: 
Halozyme Therapeutics, Inc. 
Attention: General Counsel 
11388 Sorrento Valley Road 
San Diego, California 92121
or to any other address as either party shall have furnished to the other in writing in accordance with this Section 8. Notice is effective when actually received by the addressee.
9.    Severability. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement.
10.    Withholding. We may withhold from any amount payable under this Agreement U.S. federal, state or local or non-U.S. taxes required to be withheld under applicable law.
11.    Amendment; Waiver. No provision of this Agreement may be modified, waived or discharged except by a writing signed by both parties. The failure of either party to insist upon strict compliance with any provision of this Agreement or assert any right either party may have hereunder does not constitute a waiver of the provision or right under this Agreement.
12.    Legal Fees. The Company shall pay or reimburse you for any reasonable, documented legal fees that you actually incur in the resolution of a good-faith dispute as to the terms of this Agreement and the parties’ obligations hereunder provided that you prevail on more than one substantial issue in such dispute.
13.    Applicable Law. This Agreement is governed by the laws of the State of California, without reference to principles of conflict of laws, as these laws are applied to agreements between California residents entered into and to be performed entirely within the State of California.
14.    Counterparts. This Agreement may be executed in two or more counterparts, each being an original and all of which, when taken together, is deemed one instrument.
15.    Termination. This Agreement shall terminate on the earliest of:
(a)    the date your employment terminates, unless such termination is covered by Section 2(a) of this Agreement (including by application of Section 2(a)(v)) (a “Covered Termination”);

    

(b)    the first anniversary of a Change in Control, unless you have previously experienced a Covered Termination; or
(c)    upon satisfaction of all of the Company’s obligations under this Agreement, if you have experienced a Covered Termination.
[signature page follows]

    

The parties are signing this Amended and Restated Change in Control Agreement on the date stated in the introductory clause.
HALOZYME THERAPEUTICS, INC.
By:                         
Name: 
Title: 

EMPLOYEE
                        
[Employee Name]

EXHIBIT A
Form of Release
1.General Release.
(a)In exchange for the consideration provided pursuant to the Amended and Restated Change in Control Agreement (the “Severance Agreement”) dated as of _____________ between ________________ (“Employee”) and Halozyme Therapeutics, Inc. (“Company”), Employee, together with Employee’s heirs, executors, representatives, agents, insurers, administrators, successors and assigns (collectively, “Releasors”), unconditionally, irrevocably and absolutely releases and discharges Halozyme Therapeutics, Inc. (“Company”), and any parent and subsidiary corporations (direct or indirect), divisions and affiliated corporations, partnerships or other affiliated entities of Company, past and present, as well as Company’s employees, officers, directors, agents and attorneys and their respective successors and assigns (collectively, “Released Parties”), from all claims related in any way to the transactions or occurrences between them to date, to the fullest extent permitted by law, including, but not limited to, Employee’s employment with Company, the termination of Employee’s employment and all other losses, liabilities, claims, charges, demands and causes of action, known or unknown, suspected or unsuspected, arising directly or indirectly out of or in any way connected with Employee’s employment with Company, whether under non-U.S. law or U.S. federal, state or local law. This release is intended to have the broadest possible application and includes, but is not limited to, any non-U.S. or U.S. federal, state and/or local tort, contract, common law, constitutional or other statutory claims, including, but not limited to, alleged violations of Title VII of the Civil Rights Act, as amended, the Americans with Disabilities Act, as amended, the Family and Medical Leave Act, as amended, the Equal Pay Act, as amended, the Employee Retirement Income Security Act, as amended (with respect to unvested benefits), the Civil Rights Act of 1991, as amended, Section 1981 of U.S.C. Title 42, as amended, the Sarbanes-Oxley Act of 2002, as amended, the Worker Adjustment and Retraining Notification Act, as amended, the Age Discrimination in Employment Act, as amended, the Genetic Information Nondiscrimination Act, as amended, the California Labor Code, the California Fair Employment and Housing Act, as amended, the California Family Rights Act and/or any other claims that may legally be waived and released. Employee expressly waives Employee’s right to recovery of any type, including damages or reinstatement, in any administrative or court action, whether state or federal and whether brought by Employee or on Employee’s behalf, related in any way to the matters released in this release agreement (this “Release”). However, this Release excludes, and Employee does not waive, release or discharge, any right to file an administrative charge or complaint with the Equal Employment Opportunity Commission or other administrative agency.
(a)[In further consideration of the payments and benefits provided to Employee under the Severance Agreement, Releasors hereby irrevocably and unconditionally fully and forever waive, release and discharge the Releasees from any and all Claims, whether known or unknown, from the beginning of time to the date of the Employee’s execution of this Release, arising under the Age Discrimination in Employment Act (ADEA), as amended, and its implementing regulations. By signing this Release, the Employee hereby acknowledges and confirms that: (i) the Employee has read this Release in its entirety and understands all of its terms; (ii) the Employee has been advised of and has availed him- or herself of the right to consult with an attorney prior to executing 

this Release; (iii) the Employee knowingly, freely and voluntarily assents to all of the terms and conditions set out in this Release including, without limitation, the waiver, release and covenants contained herein; (iv) the Employee is executing this Release, including the waiver and release, in exchange for good and valuable consideration in addition to anything of value to which Employee is otherwise entitled; (v) the Employee was given at least 21 days to consider the terms of this Release and consult with an attorney, although Employee may sign it sooner if desired; (vi) the Employee understands that Employee has seven days from the date Employee signs this Release to revoke the release in this paragraph by delivering notice of revocation to the Company in accordance with Section 11 hereof before the end of such seven-day period; and (vii) the Employee understands that the release contained in this paragraph does not apply to rights and claims that may arise after the date on which the Employee signs this Release.]
(b)The parties agree that this Release is not intended to bar any claims that, by statute, may not be waived, such as claims for workers’ compensation benefits, unemployment insurance benefits and statutory indemnity, as applicable. 
(c)Employee acknowledges that Employee may later discover facts or claims different from, or in addition to, the facts or claims that Employee knows or believes to be true with respect to the subject matter of this Release and which, if known at the time of signing this Release, may have materially affected this Release or Employee’s decision to enter into it. Employee agrees, nonetheless, that this Release shall be and remain effective in all respects, notwithstanding such different or additional facts or claims the discovery of them.
(d)Employee declares and represents that Employee intends this Release to be complete and not subject to any claim of mistake, that this Release expresses a full and complete release of claims, and Employee intends the Release to be final and complete. Employee executes this Release with the full knowledge that it covers all possible claims against Company and the Released Parties to the fullest extent permitted by law.
2.    Waiver of Rights Under Section 1542 of the California Civil Code. Employee has been made aware of and understands the provisions of California Civil Code Section 1542 and acknowledges and agrees that all rights, benefits and protections thereunder are expressly waived. That section provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

3.    Representation Concerning Filing of Legal Actions. Employee represents that, as of the date of this Release, Employee has not filed any lawsuits, charges, complaints, petitions, claims or other accusatory pleadings against Company or any of the other Released Parties in any court or with any governmental agency.

    

4.    [Continuing Obligations. Employee further agrees to comply with the continuing obligations regarding confidentiality set forth in Company’s Employee Nondisclosure and Assignment Agreement.]
5.    Effective Date/Acknowledgements. Employee has 21 days from the date first set forth below (such 21-day period, the “Consideration Period”) to consider whether or not to enter into this Release (although Employee may elect not to use the full Consideration Period at Employee’s option). No later than the last day of the Consideration Period, Employee must have returned an executed version of this Release to the Company. Employee may revoke this release during the seven-day period following its execution and delivery to the Company. This Release shall become effective and enforceable on the eighth day after Employee has returned a signed copy of this Release to the Company, provided that Employee signs it during the Consideration Period and does not revoke it within seven days after its execution and delivery. If the signed Release is not received by the Company on or before the last day of the Consideration Period, or if Employee revokes the Release within seven days following its delivery to the Company, the Company will assume that Employee is not interested in the consideration set forth in Sections 2(a)(ii)-(iv) of the Severance Agreement, and the offer will be automatically withdrawn. By signing this Release, Employee acknowledges that (a) Employee has read and understands the terms of this Release, (b) Employee has obtained and considered such legal counsel as Employee deems necessary, and (c) Employee enters this Release freely, knowingly and voluntarily.
6.    No Admissions. By entering into this Release, the Released Parties make no admission that they have engaged, or are now engaging, in any unlawful conduct. The parties understand and acknowledge that this Release is not an admission of liability and shall not be used or construed as such in any legal or administrative proceeding.
7.    Severability. In the event any provision of this Release shall be found unenforceable, the unenforceable provision shall be deemed deleted, and the validity and enforceability of the remaining provisions shall not be affected thereby.
8.    Full Defense. This Release may be pled as a full and complete defense to and may be used as a basis for an injunction against any action, suit or other proceeding that may be prosecuted, instituted or attempted by Employee in breach hereof.
9.    Applicable Law. The validity, interpretation and performance of this Release shall be construed and interpreted according to the laws of the United States of America and the State of California without regard to conflicts-of-law principles. The parties hereby irrevocably submit to the exclusive jurisdiction of the courts of the State of California and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.
10.    Entire Agreement; Modification. This Release[, including the continuing obligations under Company’s Employee Nondisclosure and Assignment Agreement previously signed by Employee and Exhibit A thereto, which are incorporated herein by reference,] [is / are] intended to be the entire agreement between the parties and supersede and cancel any and all other and prior agreements, written or oral, between the parties regarding this subject matter. This Release may be amended only by a written instrument executed by all parties hereto.

    

11.    Notices. All notices under this Release must be given in writing, by regular mail, if to Employee, to the mailing address on file with the Company, and if to the Company, to:
Halozyme Therapeutics, Inc. 
Attention: General Counsel 
11388 Sorrento Valley Road 
San Diego, California 92121
12.    Counterparts. This Release may be executed in counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument.
13.    ACKNOWLEDGEMENT. EMPLOYEE ACKNOWLEDGES AND AGREES THAT EMPLOYEE HAS READ THE FOREGOING RELEASE, FULLY UNDERSTANDS EACH AND EVERY PROVISION CONTAINED HEREIN, VOLUNTARILY ENTERS INTO THIS RELEASE AND HAS HAD AN OPPORTUNITY TO ASK QUESTIONS AND CONSULT WITH AN ATTORNEY OF EMPLOYEE’S CHOICE BEFORE SIGNING THIS RELEASE. EMPLOYEE FURTHER ACKNOWLEDGES THAT EMPLOYEE’S SIGNATURE BELOW IS AN AGREEMENT TO RELEASE THE COMPANY FROM ANY AND ALL CLAIMS. 
*    *    *

Wherefore, the parties have executed this Release on the dates shown below.
 

Date: _____________________        By:                         
Employee 

                

Date: _____________________        By:                         
Halozyme Therapeutics, Inc.Exhibit

Exhibit 10.2

HALOZYME THERAPEUTICS, INC.
STOCK OPTION AGREEMENT

Halozyme Therapeutics, Inc. has granted to the Participant named in the Notice of Grant of Stock Option (the “Grant Notice”) to which this Stock Option Agreement (the “Option Agreement”) is attached an option (the “Option”) to purchase certain shares of Stock upon the terms and conditions set forth in the Grant Notice and this Option Agreement.  The Option has been granted pursuant to and shall in all respects be subject to the terms and conditions of the Halozyme Therapeutics, Inc. 2011 Stock Plan (the “Plan”), as amended to the Date of Grant, the provisions of which are incorporated herein by reference.  By signing the Grant Notice, the Participant: (a) acknowledges receipt of and represents that the Participant has read and is familiar with the Grant Notice, this Option Agreement, the Plan and a prospectus for the Plan in the form most recently registered with the Securities and Exchange Commission (the “Plan Prospectus”), (b) accepts the Option subject to all of the terms and conditions of the Grant Notice, this Option Agreement and the Plan and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Grant Notice, this Option Agreement or the Plan.
1.DEFINITIONS AND CONSTRUCTION.
1.1    Definitions.  Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan.  Wherever used herein, the following terms shall have their respective meanings set forth below:
(a)    “Cause” means, solely for purposes of this Option Agreement as determined in good faith by the Committee, which determination will be conclusive, the Participant’s:
(i)    conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude;
(ii)    fraud with respect to, or misappropriation of, any funds or property of the Participating Company Group, or any customer or vendor;
(iii)    illegal use or illegal distribution of controlled substances;
(iv)    willful violation of any material written rule, regulation, procedure or policy of the Participating Company applicable to Participant that results in demonstrable harm to the Company, as determined by the Committee in good faith; or
(v)    material breach of any employment, nondisclosure, nonsolicitation or other similar material agreement executed by the Participant for the benefit of the Company that results in demonstrable harm to the Company as determined by the Committee in good faith.

(b)    “Good Reason” means, solely for purposes of this Option Agreement, the occurrence of any of the following events without the Participant’s consent:
(i)    any diminution in the Participant’s annual base salary or annual target bonus opportunity (expressed as a percentage of annual base salary); or
(ii)    any requirement by the Participating Company that the Participant physically relocate from the Participant’s current work location to another work location 30 or more miles away.
(c)    “Qualifying Termination” means the occurrence of any of the following events within two years following the occurrence of a Change in Control:
(i)    termination by the Participating Company of the Participant’s Service for any reason other than Cause; or
(ii)    the Participant’s voluntary resignation for Good Reason; or
(iii)    a termination of the Participant’s Service due to Participant’s death or Disability.
1.2    Construction.  Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Option Agreement.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.
2.    TAX CONSEQUENCES.
2.1    Tax Status of Option.  This Option is intended to have the tax status designated in the Grant Notice.
(a)    Incentive Stock Option.  If the Grant Notice so designates, this Option is intended to be an Incentive Stock Option within the meaning of Section 422(b) of the Code up to the amount of the applicable statutory limit, but the Company does not represent or warrant that this Option qualifies as such.  The Participant should consult with the Participant’s own tax advisor regarding the tax effects of this Option and the requirements necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements.  (NOTE TO PARTICIPANT: If the Option is exercised more than three (3) months after the date on which you cease to be an Employee (other than by reason of your death or permanent and total disability as defined in Section 22(e)(3) of the Code), the Option will be treated as a Nonstatutory Stock Option and not as an Incentive Stock Option to the extent required by Section 422 of the Code.)

 
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(b)    Nonstatutory Stock Option.  If the Grant Notice so designates, this Option is intended to be a Nonstatutory Stock Option and shall not be treated as an Incentive Stock Option within the meaning of Section 422(b) of the Code.
2.2    ISO Fair Market Value Limitation.  If the Grant Notice designates this Option as an Incentive Stock Option, then to the extent that the Option (together with all Incentive Stock Options granted to the Participant under all stock option plans of the Participating Company Group, including the Plan) becomes exercisable for the first time during any calendar year for shares having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portion of such Options which exceeds such amount will be treated as Nonstatutory Stock Options.  For purposes of this Section 2.2, Options designated as Incentive Stock Options are taken into account in the order in which they were granted, and the Fair Market Value of Stock is determined as of the time the Option with respect to such Stock is granted.  If the Code is amended to provide for a different limitation from that set forth in this Section 2.2, such different limitation shall be deemed incorporated herein effective as of the date required or permitted by such amendment to the Code.  If the Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 2.2, the Participant may designate which portion of such Option the Participant is exercising.  In the absence of such designation, the Participant shall be deemed to have exercised the Incentive Stock Option portion of the Option first.  Separate certificates representing each such portion shall be issued upon the exercise of the Option.  (NOTE TO PARTICIPANT: If the aggregate Exercise Price of the Option (that is, the Exercise Price per Share multiplied by the Number of Option Shares) plus the aggregate exercise price of any other Incentive Stock Options you hold (whether granted pursuant to the Plan or any other stock option plan of the Participating Company Group) is greater than One Hundred Thousand Dollars ($100,000), you should contact the Chief Financial Officer of the Company to ascertain whether the entire Option qualifies as an Incentive Stock Option.)
3.    ADMINISTRATION.
All questions of interpretation concerning this Option Agreement shall be determined by the Committee.  All determinations by the Committee shall be final and binding upon all persons having an interest in the Option.  Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has been delegated such authority by the Committee with respect to such matter, right, obligation, or election.
4.    EXERCISE OF THE OPTION.
4.1    Right to Exercise.  Except as otherwise provided herein, the Option shall be exercisable on and after the Initial Vesting Date and prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the number of Vested Shares less the number of shares previously acquired upon exercise of the Option.  In no event shall the Option be exercisable for more shares than the Number of Option Shares, as adjusted pursuant to Section 9.

 
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4.2    Method of Exercise.  Exercise of the Option shall be by means of electronic or written notice (the “Exercise Notice”) in a form authorized by the Company.  An electronic Exercise Notice must be digitally signed or authenticated by the Participant in such manner as required by the notice and transmitted to the Company or an authorized representative of the Company (including a third-party administrator designated by the Company).  In the event that the Participant is not authorized or is unable to provide an electronic Exercise Notice, the Option shall be exercised by a written Exercise Notice addressed to the Company, which shall be signed by the Participant and delivered in person, by certified or registered mail, return receipt requested, by confirmed facsimile transmission, or by such other means as the Company may permit, to the Company, or an authorized representative of the Company (including a third-party administrator designated by the Company).  Each Exercise Notice, whether electronic or written, must state the Participant’s election to exercise the Option, the number of whole shares of Stock for which the Option is being exercised and such other representations and agreements as to the Participant’s investment intent with respect to such shares as may be required pursuant to the provisions of this Option Agreement.  Further, each Exercise Notice must be received by the Company prior to the termination of the Option as set forth in Section 6 and must be accompanied by full payment of the aggregate Exercise Price for the number of shares of Stock being purchased.  The Option shall be deemed to be exercised upon receipt by the Company of such electronic or written Exercise Notice and the aggregate Exercise Price.
4.3    Payment of Exercise Price.
(a)    Forms of Consideration Authorized.  Except as otherwise provided below, payment of the aggregate Exercise Price for the number of shares of Stock for which the Option is being exercised shall be made (i) in cash or by check or cash equivalent, (ii) if permitted by the Company, by tender to the Company, or attestation to the ownership, of whole shares of Stock owned by the Participant having a Fair Market Value not less than the aggregate Exercise Price, (iii) by means of a Cashless Exercise, as defined in Section 4.3(b), (iv) by any other means authorized by the Company in its discretion, or (v) by any combination of the foregoing.
(b)    Limitations on Forms of Consideration.
(i)    Tender of Stock.  Notwithstanding the foregoing, the Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s Stock.  If required by the Company, the Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Participant for such minimum period, if any, required by the Company (and not used for another Option exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company.
(ii)    Cashless Exercise.  A “Cashless Exercise” means the delivery of a properly executed notice together with irrevocable instructions to a broker in a form acceptable to the Company providing for the assignment to the Company of the proceeds 

 
    4

of a sale or loan with respect to some or all of the shares of Stock acquired upon the exercise of the Option pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System).  The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to establish, decline to approve or terminate any such program or procedure, including with respect to the Participant notwithstanding that such program or procedures may be available to others.
4.4    Tax Withholding.
(a)    Tax Withholding in General.  At the time the Option is exercised, in whole or in part, or at any time thereafter as requested by the Company, the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for (including by means of a Cashless Exercise to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Participating Company Group, if any, which arise in connection with the Option.  The Company shall have no obligation to deliver shares of Stock until the tax withholding obligations of the Participating Company Group have been satisfied by the Participant.
(b)    Withholding in Shares.  The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable to a Participant upon the exercise of an Option, or to accept from the Participant the tender of, a number of whole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding obligations of the Participating Company Group.  The Fair Market Value of any shares of Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates.
4.5    Beneficial Ownership of Shares; Certificate Registration.  The Participant hereby authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with any broker with which the Participant has an account relationship of which the Company has notice any or all shares acquired by the Participant pursuant to the exercise of the Option.  Except as provided by the preceding sentence, a certificate for the shares as to which the Option is exercised shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.
4.6    Restrictions on Grant of the Option and Issuance of Shares.  The grant of the Option and the issuance of shares of Stock upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, state or foreign law with respect to such securities.  The Option may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed.  In addition, the Option may not be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (ii) in the opinion of legal counsel to 

 
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the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act.  THE PARTICIPANT IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.  ACCORDINGLY, THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained.  As a condition to the exercise of the Option, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.
4.7    Fractional Shares.  The Company shall not be required to issue fractional shares upon the exercise of the Option.
5.    NONTRANSFERABILITY OF THE OPTION.
During the lifetime of the Participant, the Option shall be exercisable only by the Participant or the Participant’s guardian or legal representative.  The Option shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.  Following the death of the Participant, the Option, to the extent provided in Section 7, may be exercised by the Participant’s legal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.
6.    TERMINATION OF THE OPTION.
The Option shall terminate and may no longer be exercised after the first to occur of (a) the close of business on the Option Expiration Date, (b) the close of business on the last date for exercising the Option following termination of the Participant’s Service as described in Section 7, or (c) a Change in Control to the extent provided in Section 8.
7.    EFFECT OF TERMINATION OF SERVICE.
7.1    Option Exercisability.  Except as provided below, the Option shall terminate immediately upon the Participant’s termination of Service to the extent that it is then unvested and shall be exercisable after the Participant’s termination of Service to the extent it is then vested only during the applicable time period as determined below and thereafter shall terminate.
(c)    Disability.  If the Participant’s Service terminates because of the Disability of the Participant, the Option, to the extent unexercised and exercisable for Vested Shares on the date on which the Participant’s Service terminated, may be exercised by the 

 
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Participant (or the Participant’s guardian or legal representative) at any time prior to the expiration of twelve (12) months after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.
(d)    Death.  If the Participant’s Service terminates because of the death of the Participant, the Option, to the extent unexercised and exercisable for Vested Shares on the date on which the Participant’s Service terminated, may be exercised by the Participant’s legal representative or other person who acquired the right to exercise the Option by reason of the Participant’s death at any time prior to the expiration of twelve (12) months after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.  The Participant’s Service shall be deemed to have terminated on account of death if the Participant dies within three (3) months after the Participant’s termination of Service. 
(e)    Qualifying Termination.  If the Participant’s Service terminates as a result of a Qualifying Termination, then the Option shall immediately, effective as of the date on which the Participant’s Service terminates, fully accelerate and become 100% vested and fully exercisable as to any yet unexercised shares of Stock and/or cease to be subject to forfeiture, as applicable.
(f)    Other Termination of Service.  If the Participant’s Service terminates for any reason, except Disability, death, or a Qualifying Termination, the Option, to the extent unexercised and exercisable for Vested Shares by the Participant on the date on which the Participant’s Service terminated, may be exercised by the Participant at any time prior to the expiration of three (3) months after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.
7.2    Extension if Exercise Prevented by Law.  Notwithstanding the foregoing, if the exercise of the Option within the applicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option shall remain exercisable until three (3) months after the date the Participant is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date.
8.    EFFECT OF CHANGE IN CONTROL.
Notwithstanding anything herein to the contrary, in connection with a Change in Control, the Board shall determine in its sole discretion, and shall, to the extent applicable, ensure that the definitive documentation setting forth the terms of the Change in Control provides, that either: (a) the Company shall continue to maintain in effect, or the Company’s successor shall assume, the Plan, this Option Agreement and the Option outstanding hereunder (together with all other outstanding equity incentive plans, award agreements and awards of the Company), and such Option shall continue to remain outstanding, with the number and kind of Shares or other equity subject to the Option adjusted to reflect the Change in Control in accordance with the terms of the Plan, and otherwise in accordance with and subject to the terms and conditions of the Option (including, without limitation, with respect to vesting, exercise, forfeiture, repurchase and restrictive covenants) as in effect immediately prior to the Change in Control; or (b) the Option shall be cancelled immediately prior to and contingent upon the 

 
    7

consummation of such Change in Control in exchange for a cash payment to you in respect thereof in an amount calculated based on the value of the Shares subject to the Option at the time of such Change in Control as determined by the Board in its sole discretion, in all cases, assuming the Option was fully vested and exercisable and/or not subject to forfeiture, as applicable. For avoidance of doubt: In respect of any Share subject to the Option, you shall be eligible to receive an amount in cash equal to the excess, if any, of (i) the value of the per-Share consideration received by sellers of the class of such Shares generally in the Change in Control over (ii) the exercise price applicable to such Share. Payments described in this Section 8 shall be made on, or as soon as administratively practicable following, the Change in Control.

9.    ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.
Subject to any required action by the stockholders of the Company, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number, Exercise Price per Share and kind of shares subject to the Option, in order to prevent dilution or enlargement of the Participant’s rights under the Option.  For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.”  If a majority of the shares which are of the same class as the shares that are subject to the Option are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation (the “New Shares”), the Committee may unilaterally amend the Option to provide that such Option is exercisable for New Shares, subject to Section 8 hereof in connection with a Change in Control.  In the event of any such amendment, the number of shares subject to, and the exercise price per share of, the Option shall be adjusted in a fair and equitable manner as determined by the Committee, in its discretion.  Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number, and in no event may the Exercise Price per Share be decreased to an amount less than the par value, if any, of the Stock subject to the Option.  The Committee in its sole discretion, may also make such adjustments in the terms of the Option to reflect, or related to, such changes in the capital structure of the Company or distributions as it deems appropriate.  The adjustments determined by the Committee pursuant to this Section shall be final, binding and conclusive.
10.    RIGHTS AS A STOCKHOLDER, DIRECTOR, EMPLOYEE OR CONSULTANT.
The Participant shall have no rights as a stockholder with respect to any shares covered by the Option until the date of the issuance of the shares for which the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment shall be made for dividends, 

 
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distributions or other rights for which the record date is prior to the date the shares are issued, except as provided in Section 9.  If the Participant is an Employee, the Participant understands and acknowledges that, except as otherwise provided in a separate, written employment agreement between a Participating Company and the Participant, the Participant’s employment is “at will” and is for no specified term.  Nothing in this Option Agreement shall confer upon the Participant any right to continue in the Service of a Participating Company or interfere in any way with any right of the Participating Company Group to terminate the Participant’s Service as a Director, an Employee or Consultant, as the case may be, at any time.
11.    NOTICE OF SALES UPON DISQUALIFYING DISPOSITION.
The Participant shall dispose of the shares acquired pursuant to the Option only in accordance with the provisions of this Option Agreement.  In addition, if the Grant Notice designates this Option as an Incentive Stock Option, the Participant shall (a) promptly notify the Chief Financial Officer of the Company if the Participant disposes of any of the shares acquired pursuant to the Option within one (1) year after the date the Participant exercises all or part of the Option or within two (2) years after the Date of Grant and (b) provide the Company with a description of the circumstances of such disposition.  Until such time as the Participant disposes of such shares in a manner consistent with the provisions of this Option Agreement, unless otherwise expressly authorized by the Company, the Participant shall hold all shares acquired pursuant to the Option in the Participant’s name (and not in the name of any nominee) for the one-year period immediately after the exercise of the Option and the two-year period immediately after Date of Grant.  At any time during the one-year or two-year periods set forth above, the Company may place a legend on any certificate representing shares acquired pursuant to the Option requesting the transfer agent for the Company’s Stock to notify the Company of any such transfers.  The obligation of the Participant to notify the Company of any such transfer shall continue notwithstanding that a legend has been placed on the certificate pursuant to the preceding sentence.
12.    LEGENDS.
The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates representing shares of Stock subject to the provisions of this Option Agreement.  The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession of the Participant in order to carry out the provisions of this Section.  Unless otherwise specified by the Company, legends placed on such certificates may include, but shall not be limited to, the following:
“THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED IN SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“ISO”).  IN ORDER TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO ISOs, THE SHARES SHOULD NOT BE TRANSFERRED PRIOR TO [INSERT DISQUALIFYING DISPOSITION DATE HERE].  SHOULD THE 

 
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REGISTERED HOLDER ELECT TO TRANSFER ANY OF THE SHARES PRIOR TO THIS DATE AND FOREGO ISO TAX TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALL NOTIFY THE CORPORATION IMMEDIATELY.  THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE INCENTIVE STOCK OPTION IN THE REGISTERED HOLDER’S NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED ABOVE.”

13.    MISCELLANEOUS PROVISIONS.
13.1    Termination or Amendment.  The Committee may terminate or amend the Plan or the Option at any time; provided, however, that except as provided in Section 8 in connection with a Change in Control, no such termination or amendment may adversely affect the Option or any unexercised portion hereof without the consent of the Participant unless such termination or amendment is necessary to comply with any applicable law or government regulation.  No amendment or addition to this Option Agreement shall be effective unless in writing.
13.2    Further Instruments.  The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Option Agreement.
13.3    Binding Effect.  Subject to the restrictions on transfer set forth herein, this Option Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns.
13.4    Delivery of Documents and Notices.  Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address of such party set forth in the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.
(a)    Description of Electronic Delivery.  The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Option Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s stockholders, may be delivered to the Participant electronically.  In addition, the Participant may deliver electronically the Grant Notice and Exercise Notice called for by Section 4.2 to the Company or to such third party involved in administering the Plan as the Company may designate from time to time.  Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the internet site of a third 

 
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party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.
(b)    Consent to Electronic Delivery.  The Participant acknowledges that the Participant has read Section 13.4(a) of this Option Agreement and consents to the electronic delivery of the Plan documents and the delivery of the Grant Notice and Exercise Notice, as described in Section 13.4(a).  The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing.  The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails.  Similarly, the Participant understands that the Participant must provide the Company or any designated third-party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails.  The Participant may revoke his or her consent to the electronic delivery of documents described in Section 13.4(a) or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail.  Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 13.4(a).
13.5    Personal Data.  For the purpose of implementing, administering and managing these Options, the Participant, by execution of the Grant Notice, consent to the collection, receipt, use, retention and transfer, in electronic or other form, of the Participant’s personal data by and among the Company and its third party vendors or any potential party to any Change in Control transaction or capital raising transaction involving the Company.  The Participant understands that personal data (including but not limited to, name, home address, telephone number, employee number, employment status, social security number, tax identification number, date of birth, nationality, job and payroll location, data for tax withholding purposes and shares awarded, cancelled, exercised, vested and unvested) may be transferred to third parties assisting in the implementation, administration and management of these Options and the Plan and the Participant expressly authorizes such transfer as well as the retention, use, and the subsequent transfer of the data by the recipient(s).  The Participant understands that these recipients may be located in the Participant’s country or elsewhere, and that the recipient’s country may have different data privacy laws and protections than the Participant’s country.  The Participant understands that data will be held only as long as is necessary to implement, administer and manage these Options.  The Participant understands that the Participant may, at any time, request a list with the names and addresses of any potential recipients of the personal data, view data, request additional information about the storage and processing of data, require any necessary amendments to data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company’s Secretary.  The Participant understands, however, that refusing or withdrawing the Participant’s consent may affect the Participant’s ability to accept a stock option.
13.6    Integrated Agreement.  The Grant Notice, this Option Agreement and the Plan shall constitute the entire understanding and agreement of the Participant and the 

 
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Participating Company Group with respect to the subject matter contained herein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect to such subject matter.  To the extent contemplated herein, the provisions of the Grant Notice, the Option Agreement and the Plan shall survive any exercise of the Option and shall remain in full force and effect.
13.7    Applicable Law.  The validity, construction, and effect of this Option Agreement, and of any determinations or decisions made by the Committee relating to this Option Agreement, and the rights of any and all persons having or claiming to have any interest under this Option Agreement, shall be determined exclusively in accordance with the laws of the State of Delaware, without regard to its provisions concerning the applicability of laws of other jurisdictions.  Any suit with respect hereto will be brought in the federal or state courts in the district which includes the city or town in which the Company’s principal executive office is located, and the Participant hereby agrees and submits to the personal jurisdiction and venue thereof.
13.8    Counterparts.  The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
{end of document}

 
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