Document:

arwr-ex101_33.htm

Exhibit 10.1

 

		
	
Name:
	
 

	
Number of Restricted Stock Units subject to Award:
	
 

	
Date of Grant:
	
 

	
Vesting Schedule:
	
 

	
Grant ID:
	
 

 

Arrowhead Pharmaceuticals, Inc.
2021 Incentive Plan

Performance Restricted Stock Unit Agreement

This agreement (this “Agreement”) evidences an award (the “Award”) consisting of, in aggregate, the number of restricted stock units set forth in the table above (the “Restricted Stock Units” or “RSUs”) granted by Arrowhead Pharmaceuticals, Inc. (the “Company”) to the individual named above (the “Grantee”) pursuant to and subject to the terms of the Arrowhead Pharmaceuticals, Inc. 2021 Incentive Plan (as amended from time to time, the “Plan”), which is incorporated herein by reference. 

1.Grant of Restricted Stock Units.  The Company grants to the Grantee on the date set forth above (the “Date of Grant”) an award consisting of the right to receive on the terms provided herein and in the Plan, one share of Stock with respect to each Restricted Stock Unit forming part of the Award, in each case, subject to adjustment pursuant to Section 7 of the Plan in respect of transactions occurring after the date hereof.  

2.Meaning of Certain Terms.  Except as otherwise defined herein, all capitalized terms used herein have the same meaning as in the Plan.  

3.Vesting.  Unless earlier terminated, forfeited, relinquished or expired, the Restricted Stock Units shall vest as follows: _____ of the total number of Award shares upon the achievement of each of the _____ performance criteria (each a “Vesting Performance Goal”) set forth on Exhibit A attached hereto as determined in accordance with the terms of Exhibit A, but only if the Vesting Performance Goal is achieved during the applicable performance period on or before the applicable deadline specified on Exhibit A for such Vesting Performance Goal (the “Vesting Deadline”).  In the event that the Grantee’s employment with the Company terminates for any reason before the vesting date of all or any portion of the Award, as determined in accordance with Exhibit A, the then-unvested portion of the Award shall immediately terminate and be forfeited.  

4.Delivery of Stock.  The Company shall deliver to the Grantee as soon as practicable upon the vesting of the Restricted Stock Units or any portion thereof in accordance with the terms of Exhibit A, but in all events no later than thirty (30) days following the date on which such Restricted Stock Units vest, one share of Stock with respect to each such vested Restricted Stock Unit, subject to the terms of the Plan and this Agreement.

5.Dividends; Other Rights.  The Award shall not be interpreted to bestow upon the Grantee any equity interest or ownership in the Company or any Affiliate prior to the date on which the Company delivers shares of Stock to the Grantee (if any).  The Grantee is not entitled to vote any shares of Stock by reason of the granting of this Award or to receive or be credited with any dividends declared and payable on any share of Stock prior to the date on which any such share is delivered to the Grantee hereunder.  The Grantee shall have the rights of a shareholder only as to those shares of Stock, if any, that are actually delivered under this Award.  

6.Forfeiture; Recovery of Compensation.  

(a)To the extent that Grantee does not vest in any Restricted Stock Units, all interest in such Restricted Stock Units shall be forfeited.  Grantee has no right or interest in any Restricted Stock Units that are forfeited.

(b)The Administrator may cancel, rescind, withhold or otherwise limit or restrict the Award at any time if the Grantee is not in compliance with all applicable provisions of this Agreement and the Plan.

(c)By accepting the Award the Grantee expressly acknowledges and agrees that his or her rights (and those of any permitted transferee of the Award) under the Award to any Stock acquired under the Award or any proceeds from the disposition thereof, are subject to Section 6(a)(6) of the Plan (including any successor provision).  Nothing in the preceding sentence shall be construed as limiting the general application of Section 11 of this Agreement.

7.Nontransferability.  Neither the Award nor the Restricted Stock Units may be transferred except as expressly permitted under Section 6(a)(3) of the Plan.

8.Certain Tax Matters.  The Grantee expressly acknowledges and agrees that the Grantee’s rights hereunder, including the right to be issued shares of Stock upon the vesting of the Restricted Stock Units (or any portion thereof), are subject to the Grantee’s promptly paying, or in respect of any later requirement of withholding being liable promptly to pay at such time as such withholdings are due, to the Company in cash (or by such other means as may be acceptable to the Administrator in its discretion) all taxes required to be withheld, if any.  No shares of Stock will be transferred pursuant to the vesting of the Restricted Stock Units (or any portion thereof) unless and until the Grantee or the person then holding the Award has remitted to the Company an amount in cash sufficient to satisfy any federal, state, or local requirements with respect to tax withholdings then due and has committed (and by accepting this Award the Grantee shall be deemed to have committed) to pay in cash all tax withholdings required at any later time in respect of the transfer of such shares, or has made other arrangements satisfactory to the Administrator with respect to such taxes.  The Grantee also authorizes the Company and its subsidiaries to withhold any required tax withholdings amount from any amounts otherwise owed to the Grantee, but nothing in this sentence shall be construed as relieving the Grantee of any liability for satisfying his or her obligations under the preceding provisions of this Section. 

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9.Net Settlement.  With the written consent of the Company and approval by the Administrator, the payment of the Grantee’s tax withholding obligations may be made via “net settlement”, whereby the Grantee elects to satisfy all applicable tax withholding requirements via issuance from Company to the Grantee an amount of shares consisting of the number of shares vested less shares withheld to cover the tax withholding obligations (“the withheld shares”).  In this case, the Company will remit to the appropriate taxing authorities withheld taxes on behalf of the Grantee in an amount equal to the value of the withheld shares.  The number of withheld shares will be calculated by valuing the withheld shares based upon the closing price on the applicable vesting date.  Net settlement resulting in partial shares will be rounded up.  Tax withholding due related to federal and state income taxes will be made at minimum withholding requirements.

10.Effect on Employment.  Neither the grant of the Award, nor the issuance of Shares upon vesting of the Award, will give the Grantee any right to be retained in the employ or service of the Company or any of its Affiliates, affect the right of the Company or any of its Affiliates to discharge or discipline such Grantee at any time, or affect any right of such Grantee to terminate his or her Employment at any time.

11.Provisions of the Plan.  A copy of the Plan as in effect on the Date of Grant has been furnished to the Grantee.  By accepting the Award, the Grantee agrees to be bound by the terms of the Plan and this Agreement.  In the event of any conflict between the terms of this Agreement and the Plan, the terms of the Plan shall control.  

12.Acknowledgments.  The Grantee acknowledges and agrees that (a) this Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument, (b) this agreement may be executed and exchanged using facsimile, portable document format (PDF) or electronic signature, which, in each case, shall constitute an original signature for all purposes hereunder and (c) such signature by the Company will be binding against the Company and will create a legally binding agreement when this Agreement is countersigned by the Grantee.

 

13.Electronic Delivery and Acceptance. The Company may, in its sole discretion, decide to deliver any documents related to the Award and participation in the Plan or future Awards that may be granted under the Plan by electronic means or to request the Grantee’s consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and, if requested, agrees to accept this Award and participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.

 

[The remainder of this page is intentionally left blank.]

 

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer.  

 

	
 
	
 
	
 
	
ARROWHEAD Pharmaceuticals, INC.

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
By:
	
 
	
 

	
 
	
 
	
 
	
Name:
	
 
	
 

	
 
	
 
	
 
	
Title:
	
 
	
 

	
Date:
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
Acknowledged and Agreed:
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
Name (Print):
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
Date:
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

 

[Signature Page to Performance Restricted Stock Unit Agreement]

 

Exhibit A

 

The number of Restricted Stock Units earned and vested, if any, will be determined based upon the Compensation Committee’s determination, in its sole discretion, of the achievement of one or more of the Vesting Performance Goals set forth below:  

 

				
	
Vesting Performance Goal
	
Number of Shares to

vest upon achievement

of Vesting Performance

Goal
	
Date of

commencement of

performance period
	
Vesting Deadline

(end of

performance period) 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

 

The vesting will be certified by the Compensation Committee as soon as practicable following its determination.  The date of such certification shall be the vesting date for the portion of the Award that becomes vested as a result of such certification.  Notwithstanding the foregoing, the date of such certification and vesting date for any Vesting Performance Goal shall not occur before _____, 202_. 

In the event that one or more of the Vesting Performance Goals is not achieved (as determined by the Compensation Committee in its sole discretion) on or before the applicable Vesting Deadline, that portion of the Award shall be deemed terminated and forfeited as of such Vesting Deadline.  

For the avoidance of doubt, the Compensation Committee must certify the achievement of any Vesting Performance Goal and the resulting number of earned and vested Restricted Stock Units prior to the vesting and settlement of any portion of the Award.

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Exhibit 10.2

 

STOCK OPTION GRANT

2021 INCENTIVE PLAN

NOTICE OF GRANT

(PART I OF THE STOCK OPTION AWARD AGREEMENT)

 

			
	
To:
	
 
	
(“Optionee”)

	
 
	
 
	
 

	
From:
	
Arrowhead Pharmaceuticals, Inc.

 

We are pleased to inform you that you have been approved for a grant of an option (your “Option”) to purchase shares of Arrowhead Pharmaceuticals, Inc.’s common stock.

 

Your Option will be governed by the Company’s 2021 Incentive Plan (the “Plan”), as currently in effect and as may be amended hereafter from time to time, the attached Stock Option Award Agreement (the “Option Agreement”) and the following specific provisions (which are subject to adjustment under the Plan and the Option Agreement):

 

The “Date of Grant” for your Option is:  

 

The “Expiration Date” of your Option is:  

 

The “Number of Shares” covered by your Option is:  

 

The “Exercise Price” per share for your Option is:  

 

The “Commencement Date” of your Option is:  

 

Vesting:  As long as you remain an employee of the Company, your Option will vest and become exercisable with respect to _______ of the Number of Shares one year from the Commencement Date and then in _______ equal monthly installments thereafter.  Your Option cannot be exercised except to the extent vested; if all other terms and conditions are satisfied, your Option will be fully vested and exercisable as of the fourth anniversary of the Commencement Date.  Of course, you can never exercise the Option for more than the Number of Shares or after the Expiration Date (in each case as adjusted under the terms of the Plan and the Option Agreement).  This Option is a non-statutory Stock Option under the U.S. Internal Revenue Code of 1986, as amended.

Electronic Acceptance:  The Option is contingent upon your agreement to the provisions of this Notice of Grant and the terms and conditions of the Plan and the Option Agreement, which are hereby delivered via the online Document Library of the Company’s stock option administration portal (the “Portal”).  Your electronic acceptance of the grant in the Portal constitutes your agreement to these terms and conditions as binding as a manual signature.  Your electronic acceptance also signifies your consent to be governed by the terms and conditions of use of the Portal, also made available in the Document Library.  Provisions of the Plan, the Option Agreement and this Notice of Grant and the terms of use of the Portal are subject to adjustment.  Paper copies of any of these documents can be requested from the Plan Administrator.

 

Grant Number: 

 

 

ARROWHEAD PHARMACEUTICALS, INC. 

STOCK OPTION AWARD AGREEMENT 

Unless otherwise defined herein, the terms defined in the Arrowhead Pharmaceuticals, Inc. 2021 Incentive Plan (the “Plan”) shall have the same defined meanings in this Stock Option Award Agreement (the “Option Agreement”). 

AGREEMENT 

A.     Grant of Option. 

(i) Arrowhead Pharmaceuticals, Inc. (the “Company”) hereby grants to the optionee named in the Notice of Grant attached as Part I of this Option Agreement (the “Optionee”), ”), on the date of grant set forth in the Notice of Grant, an option (the “Option”) to purchase the number of shares of the Company’s common stock (“Shares”), as set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise Price”), subject to the terms and conditions of the Plan, as currently in effect and as may be amended hereafter from time to time, the terms of which are incorporated herein by reference. In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Option Agreement, the terms and conditions of the Plan shall prevail. 

(ii) This Option shall be treated as a non-statutory Stock Option (“NSO”) under Section 422 of the U.S. Internal Revenue Code of 1986, as amended. 

B.     Exercise of Option. 

(i) Right to Exercise.  This Option is exercisable during its term in accordance with the vesting schedule set out in the Notice of Grant and the applicable provisions of the Plan and this Option Agreement. 

(ii) Exercise Period.  In no event shall this Option be exercised later than the Expiration Date set forth in the Notice of Grant. Specifically, any vested portion of this Option may be exercised after a termination of Employment, but not later than the Expiration Date set forth in the Notice of Grant. 

(iii) Method of Exercise.  This Option is exercisable by delivery of an exercise notice, in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised (the “Exercised Shares”), and such other representations and agreements as may be required by the Company pursuant to the provisions of the Plan. The Exercise Notice shall be completed by the Optionee and delivered to the Secretary of the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised with respect to the Exercised Shares upon receipt by the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price. 

(iv) Compliance with Applicable Laws.  No Shares shall be issued pursuant to the exercise of this Option unless such issuance and exercise complies with applicable laws. Assuming such compliance, for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect to such Exercised Shares. 

 

 

C.     Method of Payment. 

Payment of the aggregate Exercise Price shall be by any of the following, or a combination thereof, at the election of the Optionee: 

1.  Cash; or 

2.  Check; or 

3.  Consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan; or 

4.  Surrender of other Shares which (i) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares. 

D.     Non-Transferability of Option.  This Option may not be transferred in any manner other than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by the Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 

E.     Term of Option.  This Option may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option Agreement. 

F.     Tax Consequences.  Some of the federal tax consequences relating to this Option, as of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES. 

(i) Exercise of Option.  The Optionee may incur regular federal income tax liability upon exercise of an NSO. The Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate Exercise Price. If the Optionee is an Employee or a former Employee, the Company will be required to withhold from his or her compensation or collect from Optionee and pay to the applicable taxing authorities an amount in cash equal to a percentage of this compensation income at the time of exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. This Option does not qualify as an incentive stock option under Section 422 of the U.S. Internal Revenue Code of 1986, as amended. 

(ii) Disposition of Shares.  If the Optionee holds NSO Shares for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes. 

G.     Entire Agreement: Governing Law. The Plan is incorporated herein by reference. The Plan, this Option Agreement and the Notice of Grant constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof. This agreement is governed by the internal substantive laws but not the choice of law rules of California. 

 

 

H.    Forfeiture; Recovery of Compensation.  By accepting this Option the Optionee expressly acknowledges and agrees that his or her rights (and those of any permitted transferee) under this Option or to any Shares acquired under this Option or any proceeds from the disposition thereof are subject to Section 6(a)(6) of the Plan (including any successor provision).

I.     NO GUARANTEE OF CONTINUED SERVICE.  OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. 

J.     Electronic Delivery and Acceptance.  The Company may, in its sole discretion, decide to deliver any documents related to this Award or future Awards by electronic means or to request the Optionee’s consent to participate in the Plan by electronic means. The Optionee hereby consents to receive such documents by electronic delivery and, if requested, agrees to accept this Award and participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.

Optionee has reviewed the Plan, this Option Agreement and the Notice of Grant in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and fully understands all provisions of the Plan, this Option Agreement and the Notice of Grant. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Compensation Committee upon any questions relating to the Plan, this Option Agreement and the Notice of Grant. Optionee further agrees to notify the Company upon any change in the residence address indicated in this Option Agreement. 

 

	
ARROWHEAD Pharmaceuticals, INC.

	
 
	
 

	
 
	
 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

 

	
Date:
	
 

	
 
	
 

 

		
	
Accepted by:
	
 

	
 
	
 

	
 
	
 

	
 

	
 
	
 

	
Name (Print):
	
 

	
 
	
 

	
Date:
	
 

 

 

 

EXHIBIT A 

ARROWHEAD PHARMACEUTICALS, INC. 

2021 INCENTIVE PLAN

EXERCISE NOTICE 

Arrowhead Pharmaceuticals, Inc. 

177 East Colorado Boulevard, Suite 700

Pasadena, California 91105 

Attention: Secretary 

1. Exercise of Option.  Effective as of today,                     ,                      the undersigned (“Purchaser”) hereby elects to purchase              shares (the “Shares”) of the common stock of Arrowhead Pharmaceuticals, Inc. (the “Company”) under the Stock Option Agreement dated                     ,          (the “Option Agreement”). The purchase price for the Shares shall be $            , as required by the Option Agreement. Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the Option Agreement. 

2. Delivery of Payment.  Purchaser herewith delivers to the Company the full purchase price for the Shares. 

3. Representations of Purchaser.  Purchaser acknowledges that Purchaser has received and read and understands the Plan and the Option Agreement and agrees to abide by and be bound by their terms and conditions. 

4. Rights as Shareholder.  Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to the Optionee as soon as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date of issuance, except as provided in Section 7 of the Plan. 

5. Tax Consultation.  Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice. 

6. Entire Agreement: Governing Law.  The Plan, the Option Agreement and the Notice of Grant are incorporated herein by reference. This Exercise Notice, the Plan, the Option Agreement and the Notice of Grant constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Purchaser with respect to the subject matter hereof. This agreement is governed by the internal substantive laws, but not the choice of law rules, of California. 

 

 

 

	
 
	
 
	
 
	
 
	
 

	
Submitted by:
	
 
	
 
	
 
	
Accepted by:

	
PURCHASER
	
 
	
 
	
 
	
ARROWHEAD PHARMACEUTICALS, INC.

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
Signature
	
 
	
 
	
 
	
By

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
Print Name
	
 
	
 
	
 
	
Title

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
Date Received
	
 
	
 
	
 
	
Date Received

	
 
	
 
	
 

	
Address:
	
 
	
 
	
 
	
Address:

	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
177 East Colorado Blvd, Suite 700

Pasadena, CA  91105

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