Document:

Exhibit 10.30

 

RECEPTOS, INC.

10835 Road to the Cure

San Diego, CA  92121

 

May 11, 2009

 

James R. Schmidt
 16052 Lofty Trail Drive
 San Diego, CA  92127

 

Dear Jim:

 

On behalf of Receptos, Inc. (the “Company”), I am pleased to offer you the full-time position of Senior Director, Finance and Operations.  This letter embodies the terms of our offer of employment to you.  As explained in more detail below, your employment is contingent upon your assent to the terms and conditions set forth in this letter and the attachments hereto. If, after careful review, the terms discussed below and in the attachments hereto are acceptable to you, please sign this confirmation letter and the attached (i) Acknowledgement of At-Will Employment, (ii) Proprietary Information and Inventions Agreement and (iii) Agreement to Arbitrate where indicated and return them to me.

 

Please note:  Notwithstanding any provision herein to the contrary, this offer of employment and your start date with the Company are contingent upon the consummation of the combination (through a subsidiary merger) of the Company (formerly known as Receptor Pharmaceuticals, Inc.) and Apoptos, Inc. (the “Closing”).  Although currently anticipated to take place within the next several days, there can be no assurance that the Closing will take place within such time period, if at all.  The Company reserves the right to amend or withdraw this offer at any time prior to providing you with written notice of the closing of a Financing.

 

1.                                      Compensation.

 

a.                                      Salary.  You will be paid $6,939.42 bi-weekly, less applicable withholdings and deductions, equivalent to a salary of $180,425 per year.  All reasonable business expenses that are documented by you and incurred in the ordinary course of business will be reimbursed in accordance with the Company’s standard policies and procedures.

 

b.                                      Stock Plan.  Subject to approval by the Company’s Board of Directors in its discretion, you will be granted the option (the “Option”) to purchase 230,400 shares of the Company’s common stock pursuant to the Company’s 2008 Stock Plan (the “Plan”).  The Option shall be subject to the terms and conditions set forth in a Notice of Stock Option Grant and an accompanying Stock Option Agreement as well as the Plan; provided, however, that the Option shall vest as set forth on Schedule 1 attached hereto.  The exercise price for the shares at issue under the Option will be no less than their fair market value as determined by the Company’s Board of Directors on the date of grant.

 

 

c.                                       Vacation, Holidays and Sick-Leave.  As a full-time employee, you will accrue vacation in accordance with the Company’s standard policies and procedures.  Holidays and sick-leave will likewise be provided in accordance with the Company’s standard policies and procedures.

 

d.                                      Benefits.  As a full-time employee, you will be eligible to participate in and to receive benefits under such plans and benefits as may be adopted by the Company.  The eligibility criteria and amount and extent of benefits to which you are entitled shall be governed by each specific benefit plan (as applicable) as it may be amended from time to time.

 

2.                                      Immigration Documentation.  This offer is subject to your submission of an I-9 form and satisfactory documentation respecting your identification and right to work in the United States no later than three (3) days after your employment begins.

 

3.                                      At-Will Employment.  Your employment with the Company is “at-will.”  This means that your employment with the Company is not for a specific term, and can be terminated by yourself or by the Company at any time for any reason or no reason, with or without cause and with or without notice.  Any contrary representations which may have been made or which may hereafter be made to you are superseded by this offer.  Your acceptance of this offer is contingent upon your execution of the Company’s Acknowledgement of At-Will Employment, a copy of which is attached hereto as Exhibit A for your execution.  This offer letter and the attached Acknowledgement of At-Will Employment constitute the full and complete agreement between the parties regarding the “at-will” nature of your employment, and can only be modified by written agreement signed by you and the CEO of the Company.

 

4.                                      Severance Payment.  Without limiting the provisions of the foregoing Section 3, assuming your employment with the Company shall have been continuous from your start date through the occurrence of the applicable event and you execute and deliver a general release of claims (in a customary form provided by the Company) of all claims against the Company or persons affiliated with the Company (with any potential revocation periods having expired), then:  (i) in the event, following any Corporate Transaction, of any Termination without Cause or any Constructive Termination, you will be entitled to receive a payment equal to your then current base salary rate calculated for a period of six (6) months and, if you elect to continue your health insurance coverage under COBRA, then the Company will reimburse you for the same portion of your monthly premiums over such six (6) month period under COBRA as it is then paying (relative to health insurance coverage) for active employees; and (ii) in the event, prior to any Corporate Transaction but at least one (1) year following the commencement of your employment with the Company pursuant to this offer letter, of any Termination without Cause or any Constructive Termination, you will be entitled to receive a payment equal to your then current base salary rate calculated for a period of at least three (3) months (with any period beyond three (3) months to be determined in the sole discretion of the Board) and, if you elect to continue your health insurance coverage under COBRA, then the Company will reimburse you for the same portion of your monthly premiums over such period of at least three (3) months (with any period beyond three (3) months to be determined in the sole discretion of the Board) under COBRA as it is then paying (relative to health insurance coverage) for active employees.  The defined terms in the preceding sentence have their respective meanings as set forth on Schedule 1 attached hereto.

 

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5.                                      Proprietary Information and Inventions Agreement.  Your acceptance of this offer is contingent upon your execution of the Company’s Proprietary Information and Inventions Agreement, a copy of which is attached hereto as Exhibit B for your execution.

 

6.                                      Non-Compete and Outside Activities.  As more fully set forth in the Company’s Proprietary Information and Inventions Agreement (attached hereto as Exhibit B), you agree that, while serving as a full-time employee of the Company, you will not engage in any activity which is competitive with the Company.

 

7.                                      Arbitration.  Your acceptance of this offer is contingent upon your execution of the Company’s Agreement to Arbitrate, a copy of which is attached hereto as Exhibit C for your execution.  As more fully set forth in the Agreement to Arbitrate, both you and the Company agree that any controversy, claim or dispute arising out of, concerning or relating in any way to your employment with the Company or the termination thereof shall be submitted exclusively to final and binding arbitration.

 

8.                                      Company Rules.  As an employee of the Company, you will be expected to abide by the Company’s rules and regulations.  You will be required to sign an acknowledgment that you have read and understand the Company rules of conduct as provided in the Company’s Employee Handbook, which the Company will distribute.

 

9.                                      Integrated Agreement.  This offer, if accepted, supersedes any prior agreements, representations or promises of any kind, whether written, oral, express or implied between the parties hereto with respect to the subject matters herein.  Likewise, the terms of this offer shall constitute the full, complete and exclusive agreement between you and the Company with respect to the subject matters herein.  This Agreement may only be changed by a writing, signed by you and an authorized representative of the Company.

 

10.                               Severability.  If this offer is accepted, and any term herein is held to be invalid, void or unenforceable, the remainder of the terms herein shall remain in full force and effect and shall in no way be affected; and, the parties shall use their best efforts to find an alternative way to achieve the same result.

 

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If you wish to accept employment at the Company under the terms set out above and in the enclosed Acknowledgement of At-Will Employment, Proprietary Information and Inventions Agreement and Agreement to Arbitrate, please sign and date this letter and the enclosed documents, and return them to me.  If you accept our offer, your first day of employment will be                      , 2009, assuming that a Closing occurs prior to that time.  If a Closing has not occurred prior to                      , 2009, your first day of employment will be two weeks following written notice from the Company to you of the occurrence of a Closing.

 

This offer, if not accepted, will expire on                      , 2009.

 

We look forward to your favorable reply and to a productive and exciting work relationship.

 

Sincerely,

 

 

	
/s/ William H. Rastetter
    	
 
    	
 
    
	
Name:
    	
William   H. Rastetter
    	
 
    	
 
    
	
Title:
    	
Chief   Executive Officer
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Approved and Accepted:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
/s/ James R. Schmidt
    	
 
    	
Date:    May 4, 2009
    
	
Name:
    	
James   R. Schmidt
    	
 
    	
 
    

 

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SCHEDULE 1

 

Basic Vesting.  Measured from the effective time of the combination (through a subsidiary merger) of the Company (formerly known as Receptor Pharmaceuticals, Inc.) and Apoptos, Inc. (the “Vesting Measurement Date”), you will acquire a vested interest in the 230,400 shares of the Company’s Common Stock subject to the Option (the “Shares”) as follows (assuming that you continue to work for the Company):

 

·                  twenty-five percent (25%) of the Shares shall vest on the first (1st) anniversary of the Vesting Measurement Date; and

 

·                  1/48th of the Shares shall vest on the same day of each successive month after the first (1st) anniversary of the Vesting Measurement Date such that one hundred percent (100%) of the Time-Based Shares will have become vested (assuming that you continue to work for the Company) as of the fourth (4th) anniversary of the Vesting Measurement Date.

 

Vesting Acceleration.

 

·                  Corporate Transaction.  In the event of any Corporate Transaction (assuming that you continue to work for the Company immediately prior to such Corporate Transaction), then vesting for fifty percent (50%) of the then unvested Shares shall accelerate as of immediately prior to such Corporate Transaction and the remaining Shares shall vest, so long as you continue to work for the Company, in equal monthly portions over the remainder of the original vesting schedule.

 

·                  Termination Without Cause or Constructive Termination following a Corporate Transaction.  In the event of any Termination without Cause or any Constructive Termination following any Corporate Transaction, then vesting for all (100%) of the then unvested Shares shall accelerate as of such Termination without Cause or Constructive Termination.

 

Definitions.  For purposes of the foregoing:

 

·                  A “Corporate Transaction” is defined as any of the following: (x) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation) unless, following the consummation thereof, the Company’s stockholders of record immediately prior thereto hold more than fifty percent (50%) of the voting power of the surviving or acquiring entity or any direct or indirect parent entity of any such entity; (y) the sale, transfer or other disposition of all or substantially all of the assets of the Company by means of any transaction or series of related transactions unless, following the consummation thereof, the Company’s stockholders of record immediately prior thereto hold more than fifty percent (50%) of the voting power of the acquiring entity or any direct or indirect parent entity of any such entity; or (z) a sale of all or substantially all of the capital stock of the Company unless, following the consummation thereof, the Company’s stockholders of record immediately prior thereto hold more than fifty percent (50%) of the 

 

 

voting power of the acquiring entity or any direct or indirect parent entity of any such entity; provided, however, that notwithstanding the foregoing, a Corporate Transaction shall not include (i) any sale of securities by the Company the primary purpose of which is to generate financing for the Company or (ii) any transaction effected exclusively for the purpose of changing the domicile of the Company.

 

·                  A “Termination without Cause” means the termination, by the Company or one or more of its parent or subsidiary corporations, of any employment or consulting relationship between the you and the Company or one or more of its parent or subsidiary corporations for any reason other than: (i) commission by you of any act of fraud or embezzlement; (ii) any intentional, unauthorized use or disclosure of material confidential information or trade secrets of the Company or one or more of its parent or subsidiary corporations by you; or (iii) any other intentional misconduct by you (including severe absenteeism) which adversely affects the business or affairs of the Company or one or more of its parent or subsidiary corporations in a material manner.

 

·                  A “Constructive Termination” means your election in a written notice to the Company or one or more of its parent or subsidiary corporations to terminate any employment or consulting relationship where such notice is delivered within thirty (30) days after any of the following: (i) a material reduction in your level of duties or responsibilities or the nature of your functions; (ii) a material reduction in your base salary or potential total cash compensation (consisting of base salary and target bonus); or (iii) a relocation of your principal place of employment by more than fifty (50) miles, if the new location is both (A) more than fifty (50) miles from your principal residence and (B) farther from your principal residence than your principal place of employment immediately before such relocation.

 

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EXHIBIT A

 

ACKNOWLEDGEMENT OF AT-WILL EMPLOYMENT

 

I understand and acknowledge that my employment with Receptos, Inc. (the “Company”) is at-will and for no specified term.  I understand that I may resign at any time, for any reason or no reason, with or without cause and with or without notice.  I further understand and agree that the Company may terminate my employment at any time, for any reason or no reason, with or without cause and with or without notice.  I understand and acknowledge that this policy may only be modified in a signed, written document executed by the CEO of the Company.

 

 

	
Date: 
    	
May 4, 2009
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name: 
    	
James   R. Schmidt
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature: 
    	
/s/ James R. Schmidt
    	
 
    

 

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EXHIBIT B

 

RECEPTOS, INC.

 

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

(James R. Schmidt)

 

Receptos, Inc.

10835 Road to the Cure, #205

San Diego, CA  92121

 

Ladies and Gentlemen:

 

I recognize that Receptos, Inc., a Delaware corporation (“Receptos”), possesses a body of existing technology and intellectual property rights and is engaged in a continuous program of research, development and production with respect to its business (present and future).

 

I understand that:

 

A.                                    As part of my employment by Receptos (with the term “employment”, as used herein, to include any consulting relationship as well as any service as a member of the Board of Directors), I am expected to make new contributions and inventions of value to Receptos.

 

B.                                    My employment creates a relationship of confidence and trust between me and Receptos and that my position places me in a unique position of access to the proprietary technology, trade secrets and research, development and business information:

 

(1)                                 applicable to the business of Receptos; or

 

(2)                                 applicable to the business of any client, partner or customer of Receptos,

 

which may be made known to me by Receptos or by any client, partner or customer of Receptos, or learned by me during the period of my employment.

 

C.                                    Receptos possesses and will continue to possess information that has been or will be created, discovered or developed, or has or will otherwise become known to Receptos (including, without limitation, information created, discovered, developed or made known by or to me during the period of or arising out of my employment by Receptos), and/or in which property rights have been or will be assigned or otherwise conveyed to Receptos, which information has commercial value in the business in which Receptos is engaged.  All of the aforementioned information is hereinafter called “Confidential Information.”  By way of illustration, but not limitation, Confidential Information includes all data, compilations, blueprints, plans, audio and/or video recordings and/or devices, information on computer disks, software, tapes, printouts and other printed, typewritten or handwritten documents, specifications, strategies, systems, schemas, methods, business and marketing development 

 

 

plans, customer, employee and supplier lists, budgets and unpublished financial statements, licenses and license agreements, research projections, processes, techniques, designs, sequences, components, programs, technology, ideas, know-how, improvements, inventions (whether or not patentable or copyrightable), information about operations and maintenance, trade secrets, formulae, models, patent disclosures, information regarding the skills and compensation of other employees of Receptos and other information concerning the actual or anticipated business, research or development of Receptos or its actual or potential customers, suppliers or partners or which is or has been generated or received in confidence by or for Receptos by or from any person; and all tangible and intangible embodiments thereof of any kind whatsoever including, where appropriate and without limitation, all compositions, machinery, apparatus, records, reports, drawings, copyright applications, patent applications, documents, samples, prototypes, models, products and the like.

 

In consideration of my employment or continued employment, as the case may be, and the compensation received by me from Receptos from time to time, I hereby agree as follows:

 

1.                                      All Confidential Information shall be the sole property of Receptos and its assigns, and Receptos and its assigns shall be the sole owner of all trade secrets, patents, copyrights and other rights in connection therewith.  I hereby assign to Receptos any rights I may have or acquire in all Confidential Information.  At all times during my employment by Receptos and at all times after termination of my employment by me or Receptos for any reason (“Termination”), I will hold in confidence and trust all Confidential Information, and I will not disclose, sell, use, lecture upon or publish any Confidential Information or anything relating to it without the prior written consent of Receptos, except as may be necessary in the ordinary course of performing my duties as an employee of (or consultant or Director to) Receptos.

 

2.                                      Without limiting the terms of my employment with Receptos, I agree that during the period of my employment by Receptos I will not engage in any employment or activity in any business that is directly or indirectly competitive with Receptos or would otherwise conflict with my employment by Receptos.

 

3.                                      All documents, data, records, apparatus, equipment, sequences, components, programs and other physical property, whether or not pertaining to Confidential Information, furnished to me by Receptos or produced by myself or others in connection with my employment shall be and remain the sole property of Receptos and shall be returned promptly to Receptos as and when requested by Receptos.  Even should Receptos not so request, I shall return and deliver all such property upon Termination and I will not take with me any such property, any reproduction of such property or any materials or products derived from such property.  I further agree that any property situated on Receptos’ premises and owned by Receptos, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Receptos personnel at any time with or without notice.

 

4.                                      I shall promptly disclose any outside activities or interests, including any ownership or participation in the development of Prior Inventions (as defined in Section 8 below), that conflict or may conflict with the interests of Receptos.  I understand that I am required to make such disclosures promptly if the activity or interest is related, either directly or indirectly, to (i) an area of research, development or service of Receptos, (ii) a product candidate, product or product line of Receptos, (iii) a manufacturing, development or research methodology or process of Receptos or (iv) any activity that I may be involved with on behalf of Receptos.

 

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5.                                      I shall promptly disclose to Receptos, or any persons designated by it, all improvements, inventions, formulae, processes, programs, techniques, know-how, data and the like, whether or not patentable or copyrightable, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment with Receptos which are related to the business of Receptos, or result from tasks assigned to me by Receptos, or result from use of premises owned, leased or contracted for by Receptos (all said improvements, inventions, formulae, processes, techniques, know-how, data and the like shall be collectively hereinafter called “Inventions”).  Such disclosure shall continue for one year after Termination with respect to anything that would be an Invention if made, conceived, reduced to practice or learned prior to Termination.

 

6.                                      I agree to keep and maintain adequate and current records (in the form of notes, sketches, documentation, drawings and in any other form that may be required by Receptos) of all Confidential Information developed by me and all Inventions made by me during the period of my employment at Receptos, which records shall be made available to and remain the sole property of Receptos at all times.

 

7.                                      I agree that all Inventions shall be the sole property of Receptos and its assigns, and Receptos and its assigns shall be the sole owner of all trade secrets, patents, copyrights and other rights in connection therewith and all Confidential Information with respect thereto.  I hereby assign to Receptos any and all rights I may have or acquire in all Inventions, including all rights that may be known as or referred to as “moral rights.”  I further agree as to all Inventions to assist Receptos in every proper way (but at Receptos’ expense) to obtain and from time to time enforce patents and copyrights on Inventions in any and all countries, and to that end I will execute all documents for use in applying for and obtaining such patents and copyrights thereon and enforcing the same, as Receptos may desire, together with any assignments thereof to Receptos or persons designated by it.  My obligation to assist Receptos in obtaining and enforcing patents and copyrights for the Inventions in any and all countries shall continue beyond Termination, but Receptos shall compensate me at a reasonable rate after Termination for time actually spent by me at Receptos’ request on such assistance.  In the event that Receptos is unable for any reason whatsoever to secure my signature to any lawful and necessary document required to apply for or execute any patent or copyright application with respect to Inventions (including renewals, extension, continuations, divisions,  continuations in part or preservation of rights in respect thereof), I hereby irrevocably designate and appoint Receptos and its duly authorized officers and agents, as my agents and attorneys-in-fact to act for and in my behalf and instead of me, to execute and file any such application and to do all other lawfully permitted acts to further the prosecution and issuance of patents or copyrights thereon with the same legal force and effect as if executed by me.

 

8.                                      As a matter of record I have identified on Exhibit A hereto a complete list of all inventions or improvements relevant to the subject matter of my employment by Receptos which have been made or conceived or first reduced to practice by me alone or jointly with others prior to my employment by Receptos (“Prior Inventions”) which I desire to remove from the operation of this Agreement.  If disclosure of any such Prior Invention would cause me to violate 

 

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any prior confidentiality agreement, I understand that I am not to list such Prior Invention on Exhibit A but am only to disclose a cursory name for each such Prior Invention, a listing of the party(ies) to whom it belongs and the fact that full disclosure as to such Prior Inventions has not been made for that reason.  I represent that my list of Prior Inventions is complete.  If no such list of Prior Inventions is identified, I represent that I have made no such Prior Inventions at the time of the commencement of my employment by Receptos.  Notwithstanding the foregoing, and without limiting the other provisions of this Agreement, I agree that (i) any improvements or new inventions to the item(s) so identified on such list (if any) shall be treated as Inventions for purposes of this Agreement if the provisions of Section 5 above are otherwise applicable and (ii) if, in the course of my employment with Receptos, I incorporate a Prior Invention into an Receptos product, process, application, machine or invention, Receptos is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, modify, use and sell such Prior Invention.  Notwithstanding the foregoing, I agree that I will not incorporate, or permit to be incorporated, Prior Inventions in any Receptos product, process, application, machine or invention without Receptos’ prior written consent.

 

9.                                      I represent that my performance of all the terms of this Agreement and that my employment by Receptos does not and will not breach or constitute an event of default under any agreement (i) obligating me to keep in confidence proprietary information acquired by me in confidence or in trust prior to, or at any point throughout, my employment by Receptos, (ii) obligating me to assign to or protect for the benefit of any third party any proprietary information or any improvement, invention, formulae, process, program, technique, know-how or data or (iii) that is designed in any way to limit my employment or activity in any business in which I may compete, directly or indirectly, with any other business, or which might by application have such an effect.  I have not entered into, and I agree that I will not enter into, any agreement (either written or oral) in conflict herewith.

 

10.                               I understand, acknowledge and agree that, as part of the consideration for my employment or continued employment by Receptos, I have not brought and will not bring with me to Receptos or use in the performance of my responsibilities at or for Receptos any equipment, supplies, facilities, trade secrets or other proprietary information of any former employer which are not generally available to the public, unless I have obtained (and provide herewith to Receptos a copy of) written authorization for their possession and use.

 

11.                               I also understand that, during the course of my employment by Receptos, I am not to breach any obligation of confidentiality that I have to others, and I agree that I shall fulfill all such obligations during my employment by Receptos.  A copy of any document reflecting any such obligation, or a description thereof if no document is available, is provided herewith to Receptos.

 

12.                               I agree that during the term of my employment with Receptos and for a period of twelve (12) months after Termination, I will not directly or indirectly: (i) induce or attempt to induce any employee or consultant of Receptos to leave the employ of Receptos or to otherwise end such employee’s or consultant’s relationships with Receptos or (ii) other than on behalf of Receptos, induce or attempt to induce any other person to terminate a relationship with Receptos.

 

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13.                               After Termination, I hereby consent to the notification of my new employer (if any) of my rights and obligations under this Agreement.

 

14.                               I acknowledge that, due to the uniqueness of my relationship with Receptos, Receptos would not have an adequate remedy at law for money damages in the event that this Agreement is not fully performed in accordance with its terms.  I agree that in addition to any other rights and remedies available to Receptos for any breach by me of my obligations hereunder, Receptos shall be entitled to enforcement of my obligations hereunder by court injunction (without the posting of a bond or other security), specific performance or other appropriate equitable relief.

 

15.                               If any one or more of the provisions of this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.  If, moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

 

16.                               If applicable, this Agreement does not apply to inventions which qualify fully for protection under Section 2870 of the California Labor Code (which, if applicable, could apply to ideas or inventions for which no equipment, supplies, facility or trade secret information of Receptos were used and which were developed entirely on my own time, and (i) which do not relate at the time of conception or reduction to practice of the invention (a) to the actual business of Receptos, or (b) to Receptos’ actual or demonstrably anticipated research or development, or (ii) which do not result from any work performed by me for Receptos).  Notwithstanding the foregoing, I shall disclose in confidence to Receptos any invention in order to permit Receptos to make a determination as to compliance by me with the terms and conditions of this Agreement.

 

17.                               This Agreement shall be effective as of the first day of my employment by Receptos and shall survive Termination.  The term “employment” and the term or duration of my employment, as used herein and for purposes of this Agreement, shall include, without limitation, any consulting relationship or service pursuant to a directorship between myself and Receptos (including, if applicable, any such relationship which may follow the termination of my status as an employee of Receptos or which may precede my status as an employee of Receptos).  Accordingly, notwithstanding any other provision of this Agreement to the contrary (and without limitation), a “Termination” shall not be deemed to have occurred if a consulting relationship or directorship persists following the termination of my status as an employee of Receptos (if applicable).

 

18.                               The term Receptos, as used herein, shall include (i) Receptos, (ii) any predecessor or successor to Receptos or its business or assets, (iii) any subsidiary or affiliate of Receptos or any such predecessor or successor and (iv) any predecessor or successor to any such subsidiary or affiliate or its business or assets.

 

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19.                               This Agreement shall be binding upon me, my heirs, executors, assigns and administrators and shall inure to the benefit of Receptos, its successors and assigns.

 

20.                               This Agreement shall be governed by and construed in accordance with the internal laws of the State of California, without regard to the conflicts of law principles thereof.

 

I have read this Agreement carefully and understand its terms.  The list of Prior Inventions attached on Exhibit A is complete.

 

Dated as of:  May 4, 2009

 

 

	
 
    	
 
    	
 
    	
Signature:   
    	
/s/   James R. Schmidt
    
	
 
    	
 
    	
 
    	
 
    	
James   R. Schmidt
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Accepted and Agreed to
    	
 
    	
 
    	
 
    
	
as of May 4, 2009
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
RECEPTOS, INC.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   William H. Rastetter
    	
 
    	
 
    	
 
    
	
Name:
    	
William   H. Rastetter
    	
 
    	
 
    	
 
    
	
Its:
    	
Chief   Executive Officer
    	
 
    	
 
    	
 
    

 

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Exhibit A

 

(James R. Schmidt)

 

Prior Inventions

 

(a)                                 Prior Inventions.  Except as set forth in part (b) below, the following is a complete list of all Prior Inventions (as defined in Section 8 of the Proprietary Information and Inventions Agreement to which this Exhibit is attached) relevant to the present business of Receptos:

 

x          None.

 

o            See below.

 

 

 

 

o            Additional sheets attached.

 

(b)                                 Confidential Prior Inventions.  Due to a prior confidentiality agreement, I cannot complete the disclosure with respect to the inventions or improvements generally listed below, the proprietary rights and duty of confidentiality with respect to which I owe to the following party(ies):

 

	
 
    	
 
    	
Invention or Improvement
    	
 
    	
Party(ies)
    	
 
    	
Relationship
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

o            Additional Sheets Attached.

 

 

EXHIBIT C

 

AGREEMENT TO ARBITRATE

 

I, James R. Schmidt (the “Employee”), and Receptos, Inc. (the “Company”), hereby enter into this agreement to arbitrate (the “Agreement”).

 

The parties hereto agree that, except as noted below, any controversy, claim or dispute arising out of, concerning or relating in any way to the Employee’s employment with the Company or the termination thereof, whether arising in tort, contract or pursuant to a statute, regulation or ordinance now in existence or which may in the future be enacted or recognized (the “Claims”) shall be submitted exclusively to final and binding arbitration.  The parties hereto understand and agree that by entering into this Agreement they are waiving their respective right to bring such Claims to court, including any right to a jury trial.

 

The Claims subject to this Agreement include, but are not limited to: (a) claims for fraud, promissory estoppel, fraudulent inducement of contract or breach of contract or contractual obligation, whether such alleged contract or obligation be oral or written, express or implied by fact or law; (b) claims for wrongful termination of employment, wrongful termination in violation of public policy and constructive discharge, infliction of emotional distress, misrepresentation, interference with contract or prospective economic advantage, defamation, unfair business practices, and any other tort or tort-like causes of action relating to or arising from the employment relationship; (c) claims for discrimination, harassment, or retaliation under any and all federal, state, or municipal statutes, regulations, or ordinances (including, but not limited to, Title VII of the Civil Rights Act of 1965, the Americans With Disabilities Act, the Age Discrimination in Employment Act and the California Fair Employment and Housing Act) as well as claims for violation of any other federal, state, or municipal statute, regulation, or ordinance, except as set forth herein; (d) claims for wages, commissions, bonuses, severance, employee benefits, stock options and the like, whether such claims are based on alleged express or implied contract or obligation, equity, the California Labor Code, the Fair Labor Standards Act, the Employee Retirement Income Securities Act or any other federal, state, or municipal laws concerning wages, compensation or employee benefits; (e) claims arising out of or relating to the grant, exercise, vesting and/or issuance of equity in the Company or options to purchase equity in the Company; and (f) claims concerning the validity, infringement, enforceability or misappropriation of any trade secret, patent right, copyright, trademark, or any other intellectual or confidential property held or sought by the Employee or the Company, including claims alleged by Employee or the Company that arise under the Company’s Proprietary Information and Inventions Agreement regarding such intellectual or confidential property.

 

Notwithstanding the above: (a) nothing in this Agreement shall be construed as limiting the Employee’s right to file a claim with or seek the assistance of the Equal Employment Opportunity Commission, or any similar state agency, however, any claim that cannot be 

 

 

resolved administratively shall be subject to this Agreement; (b) the following disputes and claims are not covered by this Agreement and shall therefore be resolved by both parties in any appropriate forum, including courts of law, as required by the laws then in effect: (i) claims for workers’ compensation benefits; (ii) claims for unemployment insurance benefits; and (iii) claims for state or federal disability insurance benefits; and (c) neither party waives the right to seek through judicial process, preliminary injunctive relief to preserve the status quo or prevent irreparable injury before the matter can be heard in arbitration.

 

The arbitration provided under this Agreement shall be conducted by a single arbitrator in accordance with the then-current rules issued by the American Association (“AAA”) for the resolution of employment disputes, which rules are incorporated herein by reference.  The parties understand and agree that the arbitration shall take place in San Diego, California, or, at the Employee’s option, in the county in which the Employee primarily worked with the Company at the time the arbitrable dispute or claim arose.

 

Both the Employee and the Company have the right to be represented by counsel of their choice.  Each party shall be responsible for his/her/its own attorneys’ fees, except as provided by law.  The Company will pay the arbitrator’s fee for the proceeding, as well as any administrative, room or other charges required by AAA.  However, each party shall be responsible for all costs associated with discovery which that party initiates, e.g., depositions, except that a party or third-party witness being deposed shall be responsible for the cost of a copy of the transcript if he/she/it chooses to order a copy.

 

The arbitrator shall issue a written arbitration decision or award stating the arbitrator’s essential findings and conclusions upon which the decision or award is based.  The decision or award of the arbitrator shall be final and binding upon the parties.  The arbitrator shall have the power to award any type of legal or equitable relief that would be available in a court of competent jurisdiction including, but not limited to, costs, attorneys’ fees, and punitive damages when such damages and fees are available under the applicable statute and/or judicial authority.  Either party may file pre-hearing motions directed at the legal sufficiency of a claim or defense equivalent to a demurrer or summary judgment prior to the arbitration hearing.  The arbitrator’s decision or award may be entered as a judgment or order in any court of competent jurisdiction.

 

The parties agree to file any demand for arbitration within the time limit established by the applicable statute of limitations for the asserted claims or within one year of the conduct that forms the basis of the claim if no statutory limitation is applicable.  Failure to demand arbitration within the prescribed time period shall result in waiver of said claims.  The parties further agree that nothing in this Agreement relieves either of them from any obligation they may have to exhaust certain administrative remedies before arbitrating any claims or disputes under this Agreement.

 

The parties understand and agree that neither the terms nor the conditions described in this Agreement are intended to create a contract of employment for a specific duration of time or to limit the circumstances under which the Employee’s employment may be terminated.

 

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This is the complete agreement between the Employee and the Company on the subject of the arbitration of disputes.  This Agreement supersedes any prior or contemporaneous oral or written understanding on the subject.  This Agreement shall be governed by and shall be interpreted in accordance with the laws of the State of California.  The terms of this Agreement may not be orally modified.  This Agreement can be modified only by a written document signed by the CEO of the Company and the Employee.  The parties hereto further agree that this Agreement shall survive the termination of the Employee’s employment.

 

In the event that any provision of this Agreement is determined by the arbitrator or by a court of competent jurisdiction to be illegal, invalid, or unenforceable to any extent, such term or provision shall be enforced to the extent permissible under the law and all remaining terms and provisions hereof shall continue in full force and effect.

 

Both parties acknowledge, represent and warrant that they are knowingly and voluntarily entering into this Agreement, that they have or may consult with an attorney concerning the terms of this Agreement, and understand that by entering into this Agreement they are agreeing to waive a jury trial as to all Claims.

 

 

	
EMPLOYEE
    	
 
    	
RECEPTOS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/   James R. Schmidt
    	
 
    	
/s/   William H. Rastetter
    
	
Signature
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    
	
May 4,   2009
    	
 
    	
May 11,   2009
    
	
Date
    	
 
    	
Date
    
	
 
    	
 
    	
 
    
	
James   R. Schmidt
    	
 
    	
William   H. Rastetter
    
	
Print   Name
    	
 
    	
Print   Name
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Chief   Executive Officer 
    
	
 
    	
 
    	
Title
    

 

3Exhibit 10.31

 

RECEPTOS, INC.

RESTRICTED STOCK ISSUANCE AGREEMENT

(Faheem Hasnain)

 

THIS RESTRICTED STOCK ISSUANCE AGREEMENT (this “Agreement”) is made as of November 19, 2010 by and between Receptos, Inc., a Delaware corporation (the “Company”), and Faheem Hasnain, an individual (the “Stockholder”).

 

THE PARTIES HEREBY AGREE AS FOLLOWS:

 

1.                                      Issuance of Shares.

 

1.1                               Issuance.  The Company hereby issues to Stockholder, and Stockholder hereby accepts, Three Million Seven Hundred Sixty-Eight Thousand Five Hundred Fifteen (3,768,515) shares (the “Shares”) of the Company’s Common Stock, par value $0.001 (the “Common Stock”).  The parties acknowledge and agree that, for purposes of this Agreement, the Shares are assumed to have a fair market value, as of the date of this Agreement, of $0.02 per Share.

 

1.2                               Assignment.  Concurrently with the execution of this Agreement, the Stockholder shall deliver to the Secretary of the Company a duly executed blank Assignment Separate from Certificate (in the form attached hereto as Exhibit A) and any additional documents required by the Company as a condition for the issuance of the Shares.

 

1.3                               Delivery of Certificates.  The certificates representing the Shares issued hereunder and subject to the Company’s Repurchase Right (as defined in Article 5 below) shall be held in escrow by the Secretary of the Company (as provided in Article 6 below).

 

2.                                      Securities Law Compliance.

 

2.1                               Exemption From Registration.  The Shares have not been registered under the Securities Act of 1933, as amended (the “1933 Act”), and are being issued to the Stockholder in reliance upon the exemption from such registration provided by Section 4(2) of the 1933 Act based on the representations and warranties made by the Stockholder herein.

 

2.2                               Restricted Securities.

 

(a)                                 The Stockholder hereby confirms that the Stockholder has been informed that the Shares are “restricted securities” under the 1933 Act and may not be resold or transferred unless the Shares are first registered under the federal securities laws or unless an exemption from such registration is available.  Accordingly, the Stockholder hereby acknowledges that the Stockholder is prepared to hold the Shares for an indefinite period of time.

 

(b)                                 The Stockholder is aware of the adoption of Rule 144 by the Commission, promulgated under the 1933 Act (“Rule 144”), which permits limited public resales of securities acquired in a nonpublic offering, subject to the satisfaction of certain conditions, including, among other things, the following:  (i) the availability of certain current public information about the issuer; (ii) the sale being through a broker in an unsolicited “broker’s

 

 

transaction”; and (iii) the amount of securities being sold during any three (3) month period not exceeding specified limitations.  The Stockholder is aware that Rule 144 is not presently available to exempt the sale of the Shares from the registration requirements of the 1933 Act.  The Stockholder further represents that the Stockholder understands that at the time the Stockholder wishes to sell the Shares there may be no public market upon which to make such a sale, and that, even if such a public market exists for the Common Stock, the Company may not satisfy the current public information requirement of Rule 144 or other conditions under Rule 144 which are required of the Company.  As a result of the foregoing, the Stockholder understands that the Stockholder may be precluded from selling the Shares under Rule 144.

 

(c)                                  The Stockholder represents that (i) prior to acquisition of the Shares, the Stockholder acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares; (ii) the Stockholder has such knowledge and experience in financial and business matters as to make the Stockholder capable of evaluating the risks of the prospective investment and to make an informed investment decision; and (iii) the Stockholder is able to bear the economic risk of the Stockholder’s investment in the Shares.  The Stockholder agrees not to make, without the prior written consent of the Company, any public offering or sale of the Shares although permitted to do so pursuant to Rule 144 promulgated under the 1933 Act, until the earlier of the date on which the Company effects its initial registered public offering pursuant to the 1933 Act or the date on which it becomes a registered company pursuant to section 12(g) of the Securities and Exchange Act of 1934, as amended.

 

2.3                               Disposition of Shares.  The Stockholder hereby agrees that the Stockholder shall not make any disposition of the Shares (other than a permitted transfer under Section 4.1 below) unless and until:

 

(a)                                 the Stockholder shall have notified the Company of the proposed disposition and provided a written summary of the terms and conditions of the proposed disposition;

 

(b)                                 the Stockholder shall have complied with all requirements of this Agreement applicable to the disposition of the Shares; and

 

(c)                                  the Stockholder, if requested by the Company, shall have provided the Company with an opinion of counsel in form and substance satisfactory to the Company, that (i) the proposed disposition does not require registration of the Shares under the 1933 Act or (ii) all appropriate action necessary for compliance with the registration requirements of the 1933 Act or the requirements of any exemption from registration available under the 1933 Act (including Rule 144) have been taken.

 

The Company shall not be required (x) to transfer on its books any Shares that have been sold or transferred in violation of the provisions of this Article 2 nor (y) to treat as the owner of the Shares, or otherwise to accord voting or dividend rights to, any transferee to whom the Shares have been transferred in contravention of this Agreement.

 

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2.4                               Restrictive Legends.  In order to reflect the restrictions on the disposition of the Shares, the stock certificates for the Shares will be endorsed with restrictive legends, including the following legends as applicable:

 

(a)                                 “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.”

 

(b)                                 The legends set forth in Articles 5 and 7 below.

 

(c)                                  Any legend(s) required by the authorities of any state in connection with the issuance of the Shares.

 

3.                                      Special Provisions.

 

3.1                               Stockholder Rights.  Until such time as the Company actually exercises its repurchase rights under this Agreement, the Stockholder (or any successor in interest) shall have all the rights of a stockholder (including voting and dividend rights) with respect to the Shares, including the Shares held in escrow under Article 6 below, subject, however, to the transfer restrictions of Articles 4 and 7 below.

 

3.2                               Section 83(b) Election.  The Stockholder understands that under Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”), the difference between the purchase price paid for the Shares, if any, and the fair market value of such Shares on the date any forfeiture restrictions applicable to such Shares lapse will be reportable as ordinary income at that time.  For this purpose, the term “forfeiture restrictions” includes the right of the Company to repurchase the Shares under Article 5 below.  The Stockholder understands that the Stockholder may elect to be taxed at the time the Shares are acquired hereunder (which would result in a tax on the amount by which the fair market value of the Shares is in excess of the purchase price, if any), rather than when such Shares cease to be subject to such forfeiture restrictions, by filing an election under Section 83(b) of the Code with the U.S. Internal Revenue Service within thirty (30) days after the date of issuance hereunder.  The form for making this election is attached hereto as Exhibit B.  The Stockholder understands that failure to make this filing within such thirty (30) day period will result in the recognition of ordinary income by Stockholder as the forfeiture restrictions lapse (notwithstanding, for example and without limitation, the absence of any ability by the Stockholder to sell the Shares at such time).

 

3.3                               Market Stand-Off.

 

(a)                                 In connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the 1933 Act (including, without limitation, the Company’s initial public offering), the Stockholder shall not sell, make any short sale of, loan, hypothecate, pledge, grant any option for the

 

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purchase of, or otherwise dispose or transfer for value or agree to engage in any of the foregoing transactions with respect to any Shares without the prior written consent of the Company or its underwriters, for such period of time after the effective date of such registration statement as may be requested by the Company or such underwriters (not to exceed one hundred eighty (180) days).

 

(b)                                 The Stockholder shall be subject to the market stand-off provisions of this Section 3.3 with respect to underwritten public offerings of the Company’s equity securities following the initial such offering only if the officers and directors of the Company are also subject to similar arrangements.

 

(c)                                  In the event of any stock dividend, stock split, recapitalization, or other change affecting the Common Stock effected without receipt of consideration, then any new, substituted, or additional securities distributed with respect to the Shares shall be immediately subject to the provisions of this Section 3.3, to the same extent the Shares are at such time covered by such provisions.

 

3.4                               Stop Transfer.  In order to enforce the provisions of Section 3.3 above, the Company may impose stop-transfer instructions with respect to the Shares until the end of the applicable stand-off period.

 

4.                                      Transfer Restrictions.

 

4.1                               Restriction on Transfer.  The Stockholder shall not transfer, assign, encumber or otherwise dispose of any of the Shares that are subject to the Company’s Repurchase Right under Article 5 below; provided, however, that such restriction on transfer shall not be applicable if the Stockholder receives prior written consent from the Company to (i) a gratuitous transfer of the Shares made to the Stockholder’s ancestors, descendents (including adopted children) or spouse or to trusts, partnerships or other entities for the benefit of such persons or the Stockholder (“Exempt Transfers”); or (ii) a transfer of title to the Shares effected pursuant to the Stockholder’s will or the laws of intestate succession.

 

4.2                               Transferee Obligations.  Each person (other than the Company) to whom the Shares are transferred (including, as applicable, by means of one of the permitted transfers specified in Section 4.1 above) must, as a condition precedent to such transfer, acknowledge in writing to the Company that such person is bound by the provisions of this Agreement and that the transferred Shares are subject to (i) the Company’s Repurchase Right granted hereunder (as applicable - i.e., to the extent that the transferred Shares are not vested free of such Repurchase Right), (ii) the Company’s Right of First Refusal (as defined below), and (iii) the market stand-off provisions of Section 3.3 above, to the same extent such Shares would be so subject if retained by the Stockholder.

 

4.3                               Definition of Owner.  For purposes of Articles 5, 6 and 7 below, the term “Owner” shall include the Stockholder and all subsequent holders of the Shares who derive their chain of ownership through a permitted transfer from the Stockholder (including, as applicable, in accordance with Section 4.1 above).

 

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5.                                      Repurchase Right.

 

5.1                               Grant.  The Company is hereby granted the right (the “Repurchase Right”), exercisable at any time during the ninety (90) day period following the date the Stockholder ceases (the “Cessation Date”) for any reason to be a Service Provider (as defined below) to the Company, to repurchase at $0.001 per Share (the “Repurchase Price”) all or (at the discretion of the Company) any portion of the Shares in which the Stockholder has not acquired a vested interest in accordance with Section 5.3 or Section 5.6 below as of the Cessation Date (the “Unvested Shares”).  For purposes of this Agreement, the Stockholder shall be deemed to be a “Service Provider” to the Company for so long as the Stockholder is rendering services to the Company or one or more of its parent or subsidiary corporations as an employee, director or consultant.

 

5.2                               Exercise of the Repurchase Right.  The Repurchase Right shall be exercisable by written notice delivered to the Owner of the Unvested Shares prior to the expiration of the ninety (90) day period specified in Section 5.1 above.  The notice shall indicate the number of Unvested Shares to be repurchased and the date on which the repurchase is to be effected, such date to be not more than thirty (30) days after the date of notice.  To the extent one or more certificates representing the Unvested Shares may have been previously delivered out of escrow to the Owner, then the Owner shall, prior to the close of business on the date specified for the repurchase, deliver to the Secretary of the Company the certificates representing the Unvested Shares to be repurchased, properly endorsed for transfer.  The Company shall, concurrently with the receipt of such stock certificates, pay to the Owner in cash or cash equivalents (including the cancellation of any purchase-money indebtedness), an amount equal to the Repurchase Price for the Unvested Shares that are to be repurchased.

 

5.3                               Termination of the Repurchase Right.

 

(a)                                 Lapse of Right.  The Repurchase Right shall terminate with respect to any Unvested Shares for which it is not timely exercised under Section 5.2 above.  In addition, the Repurchase Right shall terminate with respect to any and all Shares in which the Stockholder vests (i) in accordance with the schedules set forth in Section 5.3(b) and Section 5.3(c) below or (ii) pursuant to any applicable vesting acceleration event as provided in Section 5.6 below.  Accordingly, provided the Stockholder continues to be a Service Provider to the Company, the Stockholder shall acquire a vested interest in, and the Repurchase Right shall lapse with respect to, the Shares in accordance with the vesting schedules set forth in Section 5.3(b) and Section 5.3(c) below (and, as applicable, the accelerated vesting provisions of Section 5.6 below).

 

(b)                                 Time-Based Shares.  Measured from the commencement of the Stockholder’s employment with the Company on November 19, 2010 (the “Vesting Measurement Date”), the Stockholder shall acquire a vested interest in Two Million Six Hundred Ninety-One Thousand Seven Hundred Ninety-Seven (2,691,797) of the Shares (the “Time-Based Shares”), and the Repurchase Right shall lapse as to the Time-Based Shares, as follows (so long as the Stockholder continues to be a Service Provider to the Company):

 

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(1)                                 twenty-five percent (25%) of the total Time-Based Shares (i.e., Six Hundred Seventy-Two Thousand Nine Hundred Forty-Nine (672,949) of the Shares) shall vest on the first (1st) anniversary of the Vesting Measurement Date; and

 

(2)                                 1/48th of the total Time-Based Shares (i.e., Fifty-Six Thousand Seventy-Nine (56,079) of the Shares) shall vest on the same day of each successive month after the first (1st) anniversary of the Vesting Measurement Date such that one hundred percent (100%) of the Time-Based Shares will have become vested (assuming the Stockholder continues to be a Service Provider) as of the fourth (4th) anniversary of the Vesting Measurement Date.

 

(c)                                  Milestone-Based Shares.  The Stockholder shall acquire a vested interest in One Million Seventy-Six Thousand Seven Hundred Eighteen (1,076,718) of the Shares (the “Milestone-Based Shares”), and the Repurchase Right shall lapse as to the Milestone-Based Shares, as follows so long as the Stockholder continues to be a Service Provider to the Company:

 

(1)                                 fifty percent (50%) of the total Milestone-Based Shares (i.e., Five Hundred Thirty-Eight Thousand Three Hundred Fifty-Nine (538,359) of the Shares — the “First Milestone Shares”) shall vest as follows:

 

(A)                               fifty percent (50%) of the total First Milestone Shares (i.e., Two Hundred Sixty-Nine Thousand One Hundred Seventy-Nine (269,179) of the Shares) shall vest upon the achievement of the “First Milestone” as set forth on Schedule 1 attached hereto; and

 

(B)                               an amount equal to 1/72nd of the total First Milestone Shares (i.e., Seven Thousand Four Hundred Seventy-Seven (7,477) of the Shares) shall vest on the same day of each successive month following the occurrence of the First Milestone such that 100% of the First Milestone Shares will have become vested (assuming the Stockholder continues to be a Service Provider) as of the third (3rd) anniversary of the occurrence of the First Milestone; provided, however, that if the First Milestone has been achieved by the Company prior to the fifth (5th) anniversary of the Vesting Measurement Date, then all of the unvested First Milestone Shares (assuming the Stockholder continues to be a Service Provider) shall vest as of such fifth (5th) anniversary; and provided, further, that if the First Milestone is achieved by the Company on or after the fifth (5th) anniversary of the Vesting Measurement Date, then all of the unvested First Milestone Shares (assuming the Stockholder continues to be a Service Provider) shall vest upon such achievement; and

 

(2)                                 fifty percent (50%) of the total Milestone-Based Shares (i.e., Five Hundred Thirty-Eight Thousand Three Hundred Fifty-Nine (538,359) of the Shares — the “Second Milestone Shares”) shall vest as follows:

 

(A)                               fifty percent (50%) of the total Second Milestone Shares (i.e., Two Hundred Sixty-Nine Thousand One Hundred Seventy-Nine (269,179) of the Shares) shall vest upon the achievement of the “Second Milestone” as set forth on Schedule 1 attached hereto; and

 

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(B)                               an amount equal to 1/72nd of the total Second Milestone Shares (i.e., Seven Thousand Four Hundred Seventy-Seven (7,477) of the Shares) shall vest on the same day of each successive month following the occurrence of the Second Milestone such that 100% of the Second Milestone Shares will have become vested (assuming the Stockholder continues to be a Service Provider) as of the third (3rd) anniversary of the occurrence of the Second Milestone; provided, however, that if the Second Milestone has been achieved by the Company prior to the fifth (5th) anniversary of the Vesting Measurement Date, then all of the unvested Second Milestone Shares (assuming the Stockholder continues to be a Service Provider) shall vest as of such fifth (5th) anniversary; and provided, further, that if the Second Milestone is achieved by the Company on or after the fifth (5th) anniversary of the Vesting Measurement Date, then all of the unvested Second Milestone Shares (assuming the Stockholder continues to be a Service Provider) shall vest upon such achievement.

 

(d)                                 Other Provisions.  Notwithstanding the foregoing provisions of Sections 5.3(b) or 5.3(c) (or Section 5.6 below), all Shares as to which the Repurchase Right lapses shall continue to be subject to (i) the market stand-off provisions of Section 3.3 above and (ii) the Company’s Right of First Refusal.

 

5.4                               Fractional Shares.  No fractional shares shall be repurchased by the Company.  Accordingly, should the Repurchase Right extend to a fractional share at the time the Stockholder ceases to be a Service Provider, then such fractional share shall be added to any fractional share in which the Stockholder is at such time vested in order to make one whole vested share no longer subject to the Repurchase Right.

 

5.5                               Additional Shares or Substituted Securities.  In the event of any stock dividend, stock split, recapitalization or other change affecting the Common Stock effected without receipt of consideration, then any new, substituted or additional securities or other property (including money paid other than as a regular cash dividend) which is by reason of any such transaction distributed with respect to the Shares shall be immediately subject to the Repurchase Right, but only to the extent the Shares are at the time covered by the Repurchase Right.  Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number of Shares hereunder and to the price per share to be paid upon the exercise of the Repurchase Right in order to reflect the effect of any such transaction upon the Company’s capital structure; provided, however, that the aggregate Repurchase Price shall remain the same.

 

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5.6                               Vesting Acceleration.

 

(a)                                 Acceleration Events.

 

(1)                                 Termination Without Cause or Constructive Termination prior to any Corporate Transaction.  In the event of any Termination without Cause or any Constructive Termination prior to any Corporate Transaction, the following shall occur:  (i) if the First Milestone shall have occurred prior to such Termination without Cause or Constructive Termination, then vesting for fifty percent (50%) of the then unvested First Milestone Shares shall accelerate as of such Termination without Cause or Constructive Termination (such that the Repurchase Right shall automatically terminate as to such First Milestone Shares); and (ii) if the Second Milestone shall have occurred prior to such Termination without Cause or Constructive Termination, then vesting for fifty percent (50%) of the then unvested Second Milestone Shares shall accelerate as of such Termination without Cause or Constructive Termination (such that the Repurchase Right shall automatically terminate as to such Second Milestone Shares).

 

(2)                                 Corporate Transaction.  In the event of any Corporate Transaction (so long as the Stockholder continues to be a Service Provider to the Company immediately prior to such Corporate Transaction), the following shall occur:  (i) vesting for fifty percent (50%) of the then unvested Time-Based Shares shall accelerate as of immediately prior to such Corporate Transaction (such that the Repurchase Right shall automatically terminate as to such Time-Based Shares) and the remaining Time-Based Shares shall vest, so long as the Stockholder continues to be a Service Provider to the Company, in equal monthly portions over the remainder of the original vesting schedule; (ii) if the First Milestone shall have occurred prior to the Corporate Transaction or if the Corporate Transaction results in at least the Threshold Return, then vesting for seventy-five percent (75%) of the then unvested First Milestone Shares shall accelerate as of immediately prior to such Corporate Transaction (such that the Repurchase Right shall automatically terminate as to such First Milestone Shares) and the remaining First Milestone Shares shall vest, so long as the Stockholder continues to be a Service Provider to the Company, in equal monthly portions over a remainder period that is the lesser of (x) six (6) months or (y) the time otherwise remaining on the original vesting schedule; and (iii) if the Second Milestone shall have occurred prior to the Corporate Transaction or if the Corporate Transaction results in at least the Threshold Return, then vesting for seventy-five percent (75%) of the then unvested Second Milestone Shares shall accelerate as of immediately prior to such Corporate Transaction (such that the Repurchase Right shall automatically terminate as to such Second Milestone Shares) and the remaining Second Milestone Shares shall vest, so long as the Stockholder continues to be a Service Provider to the Company, in equal monthly portions over a remainder period that is the lesser of (x) six (6) months or (y) the time otherwise remaining on the original vesting schedule.

 

(3)                                 Termination Without Cause or Constructive Termination following a Corporate Transaction.  In the event of any Termination without Cause or any Constructive Termination following any Corporate Transaction, the following shall occur: (i) if the First Milestone shall have occurred prior to such Termination without Cause or Constructive Termination or if the Corporate Transaction results in at least the Threshold Return, then vesting for all (100%) of the then unvested First Milestone Shares shall accelerate as of such Termination without Cause or Constructive Termination (such that the Repurchase Right shall automatically terminate as to such First Milestone Shares); (ii) if the Second Milestone shall have occurred prior to such Termination without Cause or Constructive Termination or if the Corporate Transaction results in at least the Threshold Return, then vesting for all (100%) of the then unvested Second Milestone Shares shall accelerate as of such Termination without Cause or Constructive Termination (such that the Repurchase Right shall automatically terminate as to such Second Milestone Shares); and (iii) vesting for all (100%) of the then unvested Time-Based Shares shall accelerate as of such Termination without Cause or Constructive Termination (such that the Repurchase Right shall automatically terminate as to such Time-Based Shares).

 

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(b)                                 Definitions.  For purposes of this Section 5.6:

 

(1)                                 A “Corporate Transaction” is defined as any of the following: (x) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation) unless, following the consummation thereof, the Company’s stockholders of record immediately prior thereto hold more than fifty percent (50%) of the voting power of the surviving or acquiring entity or any direct or indirect parent entity of any such entity (with reference to the provisions of Section 8.2 below for determining such status) in approximately the same proportion such stockholders held immediately prior thereto; (y) the sale, transfer or other disposition of all or substantially all of the assets of the Company by means of any transaction or series of related transactions unless, following the consummation thereof, the Company’s stockholders of record immediately prior thereto hold more than fifty percent (50%) of the voting power of the acquiring entity or any direct or indirect parent entity of any such entity (with reference to the provisions of Section 8.2 below for determining such status) in approximately the same proportion such stockholders held immediately prior thereto; or (z) a sale of all or substantially all of the capital stock of the Company unless, following the consummation thereof, the Company’s stockholders of record immediately prior thereto hold more than fifty percent (50%) of the voting power of the acquiring entity or any direct or indirect parent entity of any such entity (with reference to the provisions of Section 8.2 below for determining such status) in approximately the same proportion such stockholders held immediately prior thereto; provided, however, that notwithstanding the foregoing, a Corporate Transaction shall not include (i) any sale of securities by the Company the primary purpose of which is to generate financing for the Company or (ii) any transaction effected exclusively for the purpose of changing the domicile of the Company.

 

(2)                                 A “Termination without Cause” means the termination, by the Company or one or more of its parent or subsidiary corporations, of any employment or consulting relationship between the Stockholder and the Company or one or more of its parent or subsidiary corporations for any reason other than: (i) commission by the Stockholder of any act of fraud or embezzlement with regard to the Company; (ii) any material, intentional, unauthorized use or disclosure of material confidential information or trade secrets of the Company or one or more of its parent or subsidiary corporations by the Stockholder (other than in the good-faith performance of the Stockholder’s duties); (iii) any other intentional misconduct by the Stockholder with regard to the Company (including severe absenteeism other than as a result of physical or mental incapacity) which adversely affects the business or affairs of the Company or one or more of its parent or subsidiary corporations in a material manner; or (iv) failure by the Stockholder to attempt in good faith to either perform duties consistent with the Stockholder’s position with the Company or to follow the reasonable requests of the Company’s Board of Directors, so long as the Stockholder has been provided with an opportunity for a period of at least ten (10) business days following written notice to the Stockholder to cure such failure; provided, however, that clause (iv) shall no longer apply following a Corporate Transaction.

 

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(3)                                 A “Constructive Termination” means the Stockholder’s election in a written notice to the Company or one or more of its parent or subsidiary corporations to terminate any employment or consulting relationship where such notice is delivered within ninety (90) days after any of the following: (i) a material reduction in the Stockholder’s level of duties or responsibilities or the nature of the Stockholder’s functions; (ii) a material reduction in the Stockholder’s base salary or potential total cash compensation (consisting of base salary and target bonus); (iii) a relocation of the Stockholder’s principal place of employment by more than fifty (50) miles, if the new location is both (A) more than fifty (50) miles from the Stockholder’s principal residence and (B) farther from the Stockholder’s principal residence than the Stockholder’s principal place of employment immediately before such relocation; or (iv) any material breach of the Stockholder’s employment agreement by the Company; provided, that in all cases such action is not cured within thirty (30) days following written notice and, if the Company has not cured such action within the cure period, termination of employment occurs within thirty (30) days after the end of such cure period.

 

(4)                                 The “Threshold Return” means that: (i) on or before May 11, 2012, the investors in the Company’s shares of preferred stock actually receive, from a Corporate Transaction, an aggregate amount of distributions, payments or other consideration in respect of their shares of Company preferred stock which is equal to three (3) times the amount of their collective investment in such shares of Company preferred stock; (ii) after May 11, 2012 but on or before May 11, 2014, the investors in the Company’s shares of preferred stock actually receive, from a Corporate Transaction, an aggregate amount of distributions, payments or other consideration in respect of their shares of Company preferred stock which is equal to five (5) times the amount of their collective investment in such shares of Company preferred stock; or (iii) after May 11, 2014, the investors in the Company’s shares of preferred stock actually receive, from a Corporate Transaction, an aggregate amount of distributions, payments or other consideration in respect of their shares of Company preferred stock which is determined to be sufficient by the Company’s Board of Directors in its sole discretion to constitute the Threshold Return for purposes of this Agreement (but which is greater, in any event, than five (5) times the amount of their collective investment in such shares of Company preferred stock).  Determinations with respect to the value of any payments, distributions or other consideration (where other than in cash or marketable securities) shall be made in good faith by the Company’s Board of Directors.

 

5.7                               Legend.  In addition to the legends required by Section 2.4 above and Article 7 below, all certificates representing Shares subject to the Company’s Right of Repurchase shall be endorsed with the following legend:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE INITIAL HOLDER HEREOF.  SUCH AGREEMENT PROVIDES FOR CERTAIN RESTRICTIONS ON TRANSFER OF THE SECURITIES, INCLUDING CERTAIN REPURCHASE RIGHTS IN FAVOR OF THE COMPANY UPON TERMINATION OF SERVICE WITH THE COMPANY.  THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.”

 

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6.                                      Escrow.

 

6.1                               Deposit.  Upon issuance, the certificates for the Shares shall be deposited in escrow with the Secretary of the Company to be held in accordance with the provisions of this Article 6.  Each deposited certificate shall be accompanied by a duly executed Assignment Separate from Certificate in the form of Exhibit A, attached hereto.  The deposited certificates, together with any other assets or securities from time to time deposited with the Company pursuant to the requirements of this Agreement, shall remain in escrow until such time or times as the certificates (or other assets and securities) are to be released or otherwise surrendered for cancellation in accordance with Section 6.3 below.  Upon delivery of the certificates (or other assets and securities) to the Company, the Owner shall be issued an instrument of deposit acknowledging the number of Shares (or other assets and securities) delivered in escrow to the Secretary of the Company.

 

6.2                               Recapitalization.  All regular cash dividends on the Shares (or other securities at the time held in escrow) shall be paid directly to the Owner and shall not be held in escrow.  However, in the event of any stock dividend, stock split, recapitalization or other change affecting the Company’s outstanding Common Stock as a class effected without receipt of consideration or in the event of any corporate reorganization, any new, substituted or additional securities or other property which is by reason of such transaction distributed with respect to the Shares shall be immediately delivered to the Secretary of the Company to be held in escrow under this Article 6, but only to the extent the Shares are at the time subject to the escrow requirements of Section 6.1 above.

 

6.3                               Release/Surrender.  The Shares, together with any other assets or securities held in escrow hereunder, shall be subject to the following terms and conditions relating to their release from escrow or their surrender to the Company for repurchase and cancellation:

 

(a)                                 Should the Company exercise the Repurchase Right under Article 5 above with respect to any Unvested Shares, then the escrowed certificates for such Unvested Shares (together with any other assets or securities issued with respect thereto) shall be delivered to the Company for cancellation, concurrently with the payment to the Owner, in cash or cash equivalent (including the cancellation of any purchase-money indebtedness), of an amount equal to the aggregate Repurchase Price for such Unvested Shares, and the Owner shall have no further rights with respect to such Unvested Shares (or other assets or securities).

 

(b)                                 As the interest of Stockholder in the Shares (or any other assets or securities issued with respect thereto) vests in accordance with the provisions of Article 5 above, the certificates for such vested shares (as well as all other vested assets and securities) shall be released from escrow and delivered to the Owner, if requested by the Owner, in accordance with the following schedule:

 

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(1)                                 Releases of vested shares (or other vested assets and securities) from escrow shall be effected at annual intervals, with the first such annual release to occur twelve (12) months after the Vesting Measurement Date;

 

(2)                                 Upon Stockholder’s cessation of Service Provider status, any escrowed Shares (or other assets or securities) in which Stockholder is at the time vested shall be promptly released from escrow; and

 

(3)                                 Upon any earlier termination of the Repurchase Right in accordance with the applicable provisions of Article 5 above, the Shares (or other assets or securities) at the time held in escrow hereunder shall promptly be released to the Owner as fully vested shares or other property.

 

(c)                                  All Shares (or other assets or securities) released from escrow in accordance with the provisions of subsection (b) above shall nevertheless remain subject to the market stand-off provisions of Section 3.3 above and the Company’s Right of First Refusal until such provisions terminate in accordance herewith.

 

7.                                      Right of First Refusal.  Before any Shares may be sold or transferred (assuming compliance with the other provisions of this Agreement), other than pursuant to an Exempt Transfer, the Company shall have a right to repurchase such Shares (the “Right of First Refusal”) as follows:

 

7.1                               Transfer Notice.  The Owner (or any successor in interest) must give written notice (“Transfer Notice”) to the Company describing fully the proposed transfer, including the proposed transfer price and the name and address of the proposed transferee.  The Transfer Notice shall be signed both by the Owner and the proposed transferee and must constitute a binding commitment of both parties to the transfer of the Common Stock (subject to the exercise by the Company of its Right of First Refusal).

 

7.2                               Company’s Right to Repurchase.  The Company and its assignees shall have the right to purchase the Shares on the terms described in the Transfer Notice (subject, however, to any change in such terms permitted in Section 7.3 below) by delivery of a written notice within thirty (30) days after the date when the Transfer Notice was received by the Company; provided, however, in the event a transfer is proposed to be made without consideration, the Company shall have the right to purchase the Shares at the then current fair market value of the Shares as determined in good faith by the Company’s Board of Directors.

 

7.3                               Owner’s Right to Transfer.  If the Company fails to exercise the Right of First Refusal within thirty (30) days after the date when it received the Transfer Notice, the Owner may conclude the proposed transfer not later than three (3) months following the Company’s receipt of the Transfer Notice, but only on the terms and conditions described in the Transfer Notice.  Any proposed transfer on terms and conditions different from those described in the Transfer Notice, as well as any subsequent proposed transfer by the holder, shall again be subject to the Right of First Refusal and shall require compliance with the procedure described in this Article 7.  If the Company exercises its Right of First Refusal, the Owner of the Shares and the Company (or its assignees) shall consummate the sale of the Shares on the terms set forth in

 

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the Transfer Notice; provided, however, in the event a transfer is proposed to be made without consideration (e.g., in the instance of a transfer resulting from the Owner’s will or the laws of intestate succession), the Company shall have the right to purchase the Shares at the then current fair market value of the Shares as determined in good faith by the Company’s Board of Directors.

 

7.4                               Successors and Assigns.  The Right of First Refusal shall inure to the benefit of the Company’s successors and assigns and shall be binding upon any transferee of the Shares.  Without limiting the foregoing, the Company’s rights under this Article 7 shall be freely assignable, in whole or in part.

 

7.5                               Listing Date Termination.  The Right of First Refusal pursuant to this Article 7 shall terminate on the Listing Date.  “Listing Date” means the first date upon which any security of the Company is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system if such securities exchange or interdealer quotation system has been certified in accordance with the provisions of Section 25100(o) of the California Corporate Securities Law of 1968.

 

7.6                               Legend.  In addition to the legends required by Section 2.4 and Section 5.7 above, all certificates representing Shares subject to the Company’s Right of First Refusal shall be endorsed with the following legend:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD, TRANSFERRED, ENCUMBERED OR IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN AGREEMENT BETWEEN THE COMPANY AND THE INITIAL HOLDER HEREOF.  SUCH AGREEMENT PROVIDES FOR CERTAIN RESTRICTIONS ON TRANSFER OF THE SECURITIES, INCLUDING CERTAIN RIGHTS OF FIRST REFUSAL IN FAVOR OF THE COMPANY.  THE SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.”

 

8.                                      General Provisions.

 

8.1                               Assignment.  The Company may assign its Repurchase Rights under Article 5 above to any person or entity selected by the Company’s Board of Directors, including one or more stockholders of the Company.

 

8.2                               Definitions.  For purposes of this Agreement, the following provisions shall be applicable in determining the parent and subsidiary corporations of the Company:

 

(a)                                 Any corporation (other than the Company) in an unbroken chain of corporations ending with the Company shall be considered to be a parent corporation of the Company, provided each such corporation in the unbroken chain (other than the Company) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

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(b)                                 Each corporation (other than the Company) in an unbroken chain of corporations beginning with the Company shall be considered to be a subsidiary of the Company, provided each such corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

 

8.3                               No Employment or Service Contract.  Nothing in this Agreement shall confer upon Stockholder any right to continue in the service of the Company (or any parent or subsidiary corporation of the Company) for any period of time or restrict in any way the rights of the Company (or any parent or subsidiary corporation of the Company) or the Stockholder to terminate the Service Provider status of the Stockholder at any time for any reason whatsoever, with or without cause.

 

8.4                               Notices.  Any notice required in connection with (i) the Repurchase Right or (ii) the disposition of any Shares covered thereby shall be given in writing and shall be deemed effective upon personal delivery, upon deposit with a nationally recognized courier service, or upon deposit in the United States mail, registered or certified, postage prepaid and addressed to the party entitled to such notice at the address indicated below such party’s signature line on this Agreement or at such other address as such party may designate by ten (10) days advance written notice under this Section 8.4 to all other parties to this Agreement.

 

8.5                               No Waiver.  The failure of the Company (or its assignees) in any instance to exercise the Repurchase Right granted under Article 5 above or the Company’s Right of First Refusal granted under Article 7 above shall not constitute a waiver of any other repurchase rights or rights of first refusal that may subsequently arise under the provisions of this Agreement or any other agreement between the Company and the Stockholder.  No waiver of any breach or condition of this Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different nature.

 

8.6                               Cancellation of Shares.  If the Company (or its assignees) shall make available, at the time and place and in the amount and form provided in this Agreement, the consideration for the Shares to be repurchased in accordance with the provisions of this Agreement, then from and after such time, the person from whom such Shares are to be repurchased shall no longer have any rights as a holder of such Shares (other than the right to receive payment of such consideration in accordance with this Agreement), and such Shares shall be deemed purchased in accordance with the applicable provisions hereof and the Company (or its assignees) shall be deemed the owner and holder of such Shares, whether or not the certificates therefor have been delivered as required by this Agreement.

 

8.7                               Stockholder Undertaking.  The Stockholder hereby agrees to take whatever additional action and execute whatever additional documents the Company may in its judgment deem necessary or advisable in order to carry out the obligations or restrictions imposed on the Stockholder under this Agreement.

 

8.8                               Agreement Is Entire Contract.  This Agreement constitutes the entire contract between the parties hereto with regard to the subject matter hereof.

 

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8.9                               Governing Law.  This Agreement shall be governed by, and construed in accordance with, the laws of the State of California, as such laws are applied to contracts entered into and performed in such State.

 

8.10                        Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

 

8.11                        Successors and Assigns.  The provisions of this Agreement shall inure to the benefit of, and be binding upon, the Company and its successors and assigns and the Stockholder and the Stockholder’s legal representatives, heirs, legatees, distributees, assigns and transferees by operation of law, whether or not any such person shall have become a party to this Agreement and have agreed in writing to join herein and be bound by the terms and conditions hereof.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first indicated above.

 

	
 
    	
RECEPTOS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William H. Rastetter
    
	
 
    	
Name:
    	
William   H. Rastetter
    
	
 
    	
Its:
    	
Chairman   of the Board
    

 

	
STOCKHOLDER:*
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Faheem Hasnain
    	
 
    
	
Faheem Hasnain
    	
 
    

 

*                                         I have received and retained the Code Section 83(b) election that was attached hereto as Exhibit B.  As set forth in Section 3.2, I understand that I, and not the Company, will be responsible for completing the form and filing the election with the U.S. Internal Revenue Service and that if such filing is not completed within thirty (30) days after the date of this Agreement, I will forfeit the potentially significant tax benefits of Section 83(b) of the Code.  I understand further that such filing should be made by registered or certified mail, return receipt requested, and that I must retain two (2) copies of the completed form for filing with my state and federal tax returns for the current tax year and an additional copy for my records.

 

15

 

Spousal Consent

 

Marie Hasnain (Stockholder’s spouse) indicates by the execution of this Agreement such spouse’s consent to be bound by the terms herein as to such spouse’s interests, whether as community property or otherwise, if any, in the Shares.

 

 

	
 
    	
/s/ Marie Hasnain
    
	
 
    	
(Signature)
    
	
 
    	
 
    
	
 
    	
Marie Hasnain
    
	
 
    	
(Printed Name)
    

 

16

 

SCHEDULE 1

 

The “First Milestone” is as follows:

 

·                  The dosing of the first patient in the first clinical trial for a product candidate, other than any clinical trial of RPC1063 (the Company’s S1P1 agonist) for multiple sclerosis, where: (i) such clinical trial would be regarded as a Phase I, II or III clinical study (as defined in 21 C.F.R. §312.21(a), (b) or (c)), or any hybrid such as a Phase Ib or Phase II/III; and (ii) such product candidate is covered by any intellectual property right held (whether owned, co-owned, licensed or otherwise controlled) by the Company.

 

The “Second Milestone” is as follows:

 

·                  The dosing of the first patient in the first clinical trial for a product candidate where:  (i) the United States Food and Drug Administration (or any foreign equivalent administrative body unless determined by the Company’s Board of Directors not to be acceptable for this purpose) would recognize such clinical trial, assuming successful completion, as a pivotal study for submission of a New Drug Application or a Biologics License Application (or any foreign equivalent application) for the product candidate as determined in the reasonable discretion of the Company’s Board of Directors, although any Phase III clinical study (as defined in 21 C.F.R. §312.21(c)) will be presumed to satisfy this requirement; and (ii) such product candidate is covered by any intellectual property right held (whether owned, co-owned, licensed or otherwise controlled) by the Company.

 

 

EXHIBIT A

 

Assignment Separate From Certificate

 

FOR VALUE RECEIVED                                      (“Stockholder”) hereby sells, assigns and transfers unto RECEPTOS, INC., a Delaware corporation (the “Company”),                          (                ) shares of Common Stock of the Company represented by Certificate No.            herewith and does hereby irrevocably constitute and appoint                                                      Attorney to transfer the said stock on the books of the Company with full power of substitution in the premises.

 

Dated:                          , 20    .

 

 

	
 
    	
/s/ Faheem Hasnain
    
	
 
    	
(Signature)
    

 

 

Spousal Consent

 

(Stockholder’s spouse) indicates by the execution of this Assignment such spouse’s consent to be bound by the terms herein as to such spouse’s interests, whether as community property or otherwise, if any, in the Shares.

 

	
 
    	
/s/ Marie Hasnain
    
	
 
    	
(Signature)
    
	
 
    	
 
    
	
 
    	
Marie Hasnain
    
	
 
    	
(Printed Name)
    

 

INSTRUCTIONS:  PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE.  THE PURPOSE OF THIS ASSIGNMENT IS TO ENABLE THE COMPANY TO EXERCISE ITS “REPURCHASE OPTION” SET FORTH IN THE AGREEMENT WITHOUT REQUIRING ADDITIONAL SIGNATURES ON THE PART OF STOCKHOLDER.

 

 

EXHIBIT B

 

ELECTION UNDER SECTION 83(b) OF

THE INTERNAL REVENUE CODE

 

The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code with respect to the property described below and supplies the following information in accordance with the regulations promulgated thereunder:

 

(A)                               The name, address and social security number of the undersigned:

 

Faheem Hasnain

 

 

Social Security No.:

 

(B)                               Description of property with respect to which the election is being made:

 

3,768,515 shares of Common Stock of Receptos, Inc. (the “Company”).

 

(C)                               The date on which the property was transferred is November     , 2010.

 

(D)                               The taxable year to which this election relates is calendar year 2010.

 

(E)                                Nature of restrictions to which the property is subject:  The shares of stock transferred to the undersigned taxpayer are subject to the provisions of a Restricted Stock Issuance Agreement between the undersigned and the Company.  Under the provisions of the Agreement, the Company will have the right to repurchase the stock at a price which may be less than the fair market value of the shares in the event of the undersigned’s termination of employment with the Company.  This right will lapse over a four-year period, although a portion of the shares are subject to a repurchase right that may take longer to lapse.

 

(F)                                 The fair market value of the property at the time of transfer (determined without regard to any restriction other than any restriction which by its terms will never lapse) was $0.02 per share, for a total of $75,370.30.

 

(G)                               The amount paid by taxpayer for the property was $0.

 

(H)                              A copy of this statement has been furnished to the Company.

 

Dated:                       , 2010

 

	
 
    	
 
    
	
 
    	
(Signature)

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