Document:

exv10w17

 

Exhibit 10.17

2006 Key Employee Incentive Plan:

Executive

Bonus Target:

	 	 	 	 	 
	 

	 	Functional VP Target:
	 	40% of Base Salary at Plan
	 
	 	 	 	 
	 

	 	Corporate VP Target:
	 	60% of Base Salary at Plan
	 
	 	 	 	 
	 

	 	CEO Bonus Target:
	 	90% of Base Salary at Plan

Payout Variables:

The bonus payout will be based on two variables reflecting corporate financial performance:
“non-GAAP Revenue” and “non-GAAP Profit Before Tax”. “Non-GAAP Revenue” and “non-GAAP PBT” are as
defined by the annual operating plan. Extraordinary events affecting financial performance will be
discussed with the Compensation Committee before determining the financial performance used in the
Incentive Plan Calculations.

Bonus Pool Weighting

	 	 	 	 	 
	Factor	 	 	 	 
	 
	Revenue
	 	 	50	%
	 
	Profit Before Tax
	 	 	50	%

The bonus pool for Executives is then multiplied times the Relative Performance Factor.

Relative Performance Factor Calculation

	 	 	 	 	 
	Actel Percentage Revenue Growth vs. Percentage Revenue Growth of Altera, Xilinx, Lattice, and Quick Logic	 	Bonus Factor
	 
	Better than none of the four
	 	 	.8	 
	Better than one of the four
	 	 	.9	 
	Better than two of the four
	 	 	1.0	 
	Better than three of the four
	 	 	1.1	 
	Better than all four
	 	 	1.2	 

 

 

CEO Discretionary Factor

After weighting the bonus award the CEO has the discretion to modify the bonus to reflect the
Executive’s individual performance.

Threshold for Payout

No bonuses shall be paid if the threshold for PBT (75% of plan) is not met. Executives must be
employed on the date of bonus payment to be eligible for the Incentive Bonus payment.

Maximum Payout

The total bonus payments under the Key Employee Incentive Plan may not exceed 12.8% of Non-GAAP
Profit Before Tax (PBT).

 

 

2006 Key Employee Incentive Plan:

Key Employees

Bonus Target:

10%, 15% or 20% of Base Salary at Plan depending upon grade level.

Each VP has the discretion to increase an individual’s bonus target by 5% to recognize
extraordinary performance (e.g., 10% to 15%, or 20% to 25%).

Participation:

Plan participation will be communicated to all Key Employees at grade level 9 and above, except
employees on a Sales Incentive plan or separate MBO plan. Any employee with documented performance
issues will not be eligible to participate in the Plan.

For any employee in an ongoing Key role that is below grade level 9, participation must be formally
approved by the VP of Human Resources and the organization VP, and documented by Human Resources.

At the end of plan year, each VP may nominate exceptional employees for one-time participation
based on key contributions for that year. These exceptions may be added but would have to be paid
from already allocated funds. (Funds budgeted for other participants within the VP’s group.)

Eligibility:

A newly hired eligible employee who is hired during the first quarter of the fiscal year will be
eligible to receive the full percentage of the targeted bonus. A newly hired eligible employee who
is hired during the second or third quarter of the fiscal year is eligible to receive a pro-rated
bonus amount based on the date of hire. A newly hired eligible employee who is hired during the
fourth quarter of the fiscal year will not be eligible for a Key Employee Bonus payout until the
next fiscal year.

Key employees must be employed on the date of the bonus payment in order to be eligible for the Key
Employee Bonus payment.

Payout Variables:

The maximum bonus payout calculation will be based on two variables reflecting corporate financial
performance: “non-GAAP Revenue” and non-GAAP Profit Before Tax”. “Non-GAAP Revenue” and “non-GAAP
PBT” are as defined by the annual operating plan. Extraordinary events affecting financial
performance will be discussed with the Compensation Committee before determining the financial
performance used in the Incentive Plan calculations.

This maximum amount is then adjusted using a performance multiplier. The performance multiplier
will be based on the attainment of individual, departmental and corporate goals. These goals will
be set at the beginning of the plan year by the VP. Each VP has the discretion to modify
individual awards based on goal performance.

 

 

Weighting

	 	 	 	 	 
	Factor	 	Weight
	 
	Revenue
	 	 	50	%
	 
	 	 	 	 
	Profit Before Tax
	 	 	50	%

	 	 	 	 	 
	Performance Multiplier	 	Weight
	 
	Corporate
	 	 	10	%
	 
	 	 	 	 
	Department
	 	 	30	%
	 
	 	 	 	 
	Individual
	 	 	60	%

Threshold for Payout

No bonuses shall be paid if the threshold for PBT (75% of plan) is not met.

Maximum Payout

The total bonus payments under the Key Employee Incentive Plan may not exceed 12.8% of Non-GAAP
Profit Before Tax (PBT).exv10w4

 

Exhibit 10.4

CYTOKINETICS, INCORPORATED

2004 EMPLOYEE STOCK PURCHASE PLAN

Amended by the Board of Directors on March 15, 2006, Approved by the Stockholders

May 25, 2006, Amended by the Board of Directors on July 19, 2006

     The following constitutes the provisions of the 2004 Employee Stock Purchase Plan of
Cytokinetics, Incorporated

     1. Purpose. The purpose of the Plan is to provide Employees with an opportunity to
purchase Common Stock through accumulated payroll deductions. It is the intention of the Company
to have the Plan qualify as an “employee stock purchase plan” under Section 423 of the Code. The
provisions of the Plan, accordingly, shall be construed so as to extend and limit Plan
participation in a manner that is consistent with the requirements of that section of the Code.

     2. Definitions.

          (a) “Administrator” means the Board or any committee thereof designated by the Board
in accordance with Section 14.

          (b) “Board” means the Board of Directors of the Company.

          (c) “Change of Control” means the occurrence of any of the following events:

               (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company’s then outstanding voting securities; or

               (ii) The consummation of the sale or disposition by the Company of all or substantially all of
the Company’s assets; or

               (iii) The consummation of a merger or consolidation of the Company, with any other
corporation, other than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity or its parent) at
least fifty percent (50%) of the total voting power represented by the voting securities of the
Company, or such surviving entity or its parent outstanding immediately after such merger or
consolidation.

               (iv) A change in the composition of the Board, as a result of which fewer than a majority of
the Directors are Incumbent Directors. “Incumbent Directors” means Directors who either (A) are
Directors as of the effective date of the Plan (pursuant to Section 23), or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a majority of those
Directors whose election or nomination was not in connection with any transaction described

 

 

in
subsections (i), (ii) or (iii) or in connection with an actual or threatened proxy contest relating
to the election of Directors of the Company.

          (d) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a
section of the Code herein shall be a reference to any successor or amended section of the Code.

          (e) “Common Stock” means the common stock of the Company.

          (f) “Company” means Cytokinetics, Incorporated, a Delaware corporation.

          (g) “Compensation” means an Employee’s base straight time gross earnings, commissions
(to the extent such commissions are an integral, recurring part of compensation), overtime and
shift premium, but exclusive of payments for incentive compensation, bonuses and other
compensation.

          (h) “Designated Subsidiary” means any Subsidiary that has been designated by the
Administrator from time to time in its sole discretion as eligible to participate in the Plan.

          (i) “Director” means a member of the Board.

          (j) “Employee” means any individual who is a common law employee of an Employer and is
customarily employed for at least twenty (20) hours per week and more than five (5) months in any
calendar year by the Employer. For purposes of the Plan, the employment relationship shall be
treated as continuing intact while the individual is on sick leave or other leave of absence
approved by the Employer. Where the period of leave exceeds ninety (90) days and the individual’s
right to reemployment is not guaranteed either by statute or by contract, the employment
relationship shall be deemed to have terminated on the 91st day of such leave.

          (k) “Employer” means any one or all of the Company and its Designated Subsidiaries.

          (l) “Enrollment Date” means the first Trading Day of each Offering Period.

          (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended, including
the rules and regulations promulgated thereunder.

          (n) “Exercise Date” means the first Trading Day on or after May 1 and November 1 of
each year. The first Exercise Date under the Plan shall be November 1, 2004.

          (o) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:

               (i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of
The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for the Common
Stock (or the closing bid, if no sales were reported) as quoted on such exchange or

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system on the
date of determination, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable, or;

               (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean of the closing bid and asked
prices for the Common Stock on the date of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable, or;

               (iii) In the absence of an established market for the Common Stock, its Fair Market Value
shall be determined in good faith by the Administrator, or;

               (iv) For purposes of the Enrollment Date of the first Offering Period under the Plan, the Fair
Market Value shall be the initial price to the public as set forth in the final prospectus deemed
to be included within the registration statement on Form S-1 filed with the Securities and Exchange
Commission for the initial public offering of the Common Stock (the “Registration Statement”).

          (p) “Offering Periods” means the periods of approximately twenty-four (24) months
during which an option granted pursuant to the Plan may be exercised, commencing on the first
Trading Day on or after May 1 and November 1 of each year and terminating on the first Trading Day
on or after the May 1 and November 1 Offering Period commencement date approximately twelve months
later; provided, however, that the first Offering Period under the Plan shall commence with the
first Trading Day on or after the date on which the Securities and Exchange Commission declares the
Company’s Registration Statement effective and ending on the first Trading Day on or after the
earlier of (i) May 1, 2006 or (ii) twenty-seven (27) months from the beginning of the first
Offering Period; and provided, further, that the second Offering Period under the Plan shall
commence on November 1, 2004. The duration and timing of Offering Periods may be changed pursuant
to Section 4 of this Plan.

          (q) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

          (r) “Plan” means this 2004 Employee Stock Purchase Plan, as amended.

          (s) “Purchase Period” means the approximately six (6) month period commencing on one
Exercise Date and ending with the next Exercise Date, except that the first Purchase Period of any
Offering Period shall commence on the Enrollment Date and end with the next Exercise Date.

          (t) “Purchase Price” means an amount equal to eighty-five percent (85%) of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever
is lower; provided however, that the Purchase Price may be adjusted by the Administrator pursuant
to Section 20.

          (u) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,
as defined in Section 424(f) of the Code.

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          (v) “Trading Day” means a day on which the U.S. national stock exchanges and the
Nasdaq System are open for trading.

     3. Eligibility.

               (a) First Offering Period. Any individual who is an Employee immediately prior to the
first Offering Period under the Plan shall be automatically enrolled in the first Offering Period.

               (b) Subsequent Offering Periods. Any individual who is an Employee as of the
Enrollment Date of any future Offering Period shall be eligible to participate in such Offering
Period, subject to the requirements of Section 5.

               (c) Limitations. Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that, immediately after the
grant, such Employee (or any other person whose stock would be attributed to such Employee pursuant
to Section 424(d) of the Code) would own capital stock of the Company or any Parent or Subsidiary
of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%)
or more of the total combined voting power or value of all classes of the capital stock of the
Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights
to purchase stock under all employee stock purchase plans (as defined in Section 423 of the Code)
of the Company or any Parent or Subsidiary of the Company accrues at a rate which exceeds
twenty-five thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the
stock at the time such option is granted) for each calendar year in which such option is
outstanding at any time.

     4. Offering Periods. The Plan shall be implemented by consecutive, overlapping
Offering Periods with a new Offering Period commencing on the first Trading Day on or after May 1
and November 1 of each year, or on such other date as the Administrator shall determine, and
continuing thereafter until terminated in accordance with Section 20; provided, however, that the
first Offering Period under the Plan shall commence with the first Trading Day on or after the date
on which the Securities and Exchange Commission declares the Company’s Registration Statement
effective and ending on the first Trading Day on or after the earlier of (i) May 1, 2006 or (ii)
twenty-seven (27) months from the beginning of the first Offering Period; and provided, further,
that the second Offering Period under the Plan shall commence on November 1, 2004. The
Administrator shall have the power to change the duration of Offering Periods (including the
commencement dates thereof) with respect to future offerings without stockholder approval if such
change is announced prior to the scheduled beginning of the first Offering Period to be affected
thereafter.

     5. Participation.

               (a) First Offering Period. An Employee who has become a participant in the first
Offering Period under the Plan pursuant to Section 3(a) shall be entitled to continue his or her
participation in such Offering Period only if he or she submits to the Company’s payroll office (or
its designee) a properly completed subscription agreement authorizing payroll deductions in the
form provided by the Administrator for such purpose (i) no earlier than the effective date of the
filing of the Company’s Registration Statement on Form S-8 with respect to the shares of Common
Stock issuable under the Plan (the “Effective Date”) and (ii) no later than five (5) business days
from the Effective Date or such other period of time as the Administrator may determine (the
“Enrollment

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Window”). A participant’s failure to submit the subscription agreement during the
Enrollment Window pursuant to this Section 5(a) shall result in the automatic termination of his or
her participation in the first Offering Period under the Plan.

          (b) Subsequent Offering Periods. An Employee who is eligible to participate in the
Plan pursuant to Section 3(b) may become a participant by (i) submitting to the Company’s payroll
office (or its designee), on or before a date prescribed by the Administrator prior to an
applicable Enrollment Date, a properly completed subscription agreement authorizing payroll
deductions in the form provided by the Administrator for such purpose, or (ii) following an
electronic or other enrollment procedure prescribed by the Administrator.

     6. Payroll Deductions.

          (a) At the time a participant enrolls in the Plan pursuant to Section 5, he or she shall elect
to have payroll deductions made on each payday during the Offering Period in an amount not
exceeding 15% of the Compensation which he or she receives on each such payday. Effective for
Purchase Periods and Offering Periods commencing on or after November 1, 2006, eligible Employees
who wish to enroll in the Plan, and participants then participating in the Plan who are subscribing
at a rate of 0% of Compensation, may elect prior to the commencement of a Purchase Period or
Offering Period, as applicable, to have payroll deductions made on each payday during the Offering
Period in an amount not to exceed 15% of Compensation, but with a minimum contribution rate of 1%
of Compensation, subject to Sections 3(c) and 6(e). Participants will not be permitted to
subscribe at a rate of 0% of Compensation, except as required by Sections 3(c) and 6(e).

          (b) Payroll deductions authorized by a participant shall commence on the first payday
following the Enrollment Date and shall end on the last payday in the Offering Period to which such
authorization is applicable, unless sooner terminated by the participant as provided in Section 10;
provided, however, that for the first Offering Period under the Plan, payroll deductions shall
commence on the first payday on or following the end of the Enrollment Window.

          (c) All payroll deductions made for a participant shall be credited to his or her account
under the Plan and shall be withheld in whole percentages only. A participant may not make any
additional payments into such account.

          (d) A participant may discontinue his or her participation in the Plan as provided in Section
10, or may change the rate of his or her payroll deductions during the Offering Period by (i)
properly completing and submitting to the Company’s payroll office (or its designee), on or before
a date prescribed by the Administrator prior to an applicable Exercise Date, a new subscription
agreement authorizing the change in payroll deduction rate in the form provided by the
Administrator for such purpose, or (ii) following an electronic or other procedure prescribed by
the Administrator; provided, however, that a participant may only make one payroll deduction change
during each Purchase Period. If a participant has not followed such procedures to change the rate
of payroll deductions, the rate of his or her payroll deductions shall continue at the originally
elected rate throughout the Offering Period and future Offering Periods (unless terminated as
provided in
Section 10). The Administrator may, in its sole discretion, limit the nature and/or number of
payroll deduction rate changes that may be made by participants during any Offering Period. Any
change in payroll deduction rate made pursuant to this Section 6(d) shall be effective as of the
first full payroll

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period following five (5) business days after the date on which the change is
made by the participant (unless the Administrator, in its sole discretion, elects to process a
given change in payroll deduction rate more quickly). Effective for Purchase Periods and the
Offering Periods commencing on or after November 1, 2006, a subscription agreement authorizing a
decrease in the rate of payroll deductions may be submitted at any time during a Purchase Period,
but a subscription agreement authorizing an increase in the rate of payroll deductions must be, and
will only be processed if it is, received by the Company’s payroll office (or its designee) at
least five (5) days prior to the commencement of a Purchase Period to which it relates. A
subscription agreement authorizing an increase in the rate of payroll deductions will not be
processed and will have no effect after the commencement of a Purchase Period to which it relates.

          (e) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(c), or if the Administrator reasonably anticipates a participant has
contributed a sufficient amount to purchase a number of shares of Common Stock equal to or in
excess of the applicable limit for such Purchase or Offering Period (as set forth in Section 7 or
as established by the Administrator), a participant’s payroll deductions may be decreased to zero
percent (0%) at any time during a Purchase Period. Subject to Section 423(b)(8) of the Code and
Section 3(c) hereof, payroll deductions will recommence at the rate originally elected by the
participant effective as of the beginning of the first Purchase Period which is scheduled to end in
the following calendar year, or, for participants who have had their contributions reduced due to
the applicable limits on the maximum number of shares that may be purchased in any Purchase or
Offering Period, the immediately following Purchase Period, unless terminated by the participant as
provided in Section 10.

          (f) At the time the option is exercised, in whole or in part, or at the time some or all of
the Company’s Common Stock issued under the Plan is disposed of, the participant must make adequate
provision for the Company’s federal, state, or other tax withholding obligations, if any, which
arise upon the exercise of the option or the disposition of the Common Stock. At any time, the
Company may, but shall not be obligated to, withhold from the participant’s compensation the amount
necessary for the Company to meet applicable withholding obligations, including any withholding
required to make available to the Company any tax deductions or benefits attributable to the sale
or early disposition of Common Stock by the Employee.

     7. Grant of Option. On the Enrollment Date of each Offering Period, each Employee
participating in such Offering Period shall be granted an option to purchase on each Exercise Date
during such Offering Period (at the applicable Purchase Price) up to a number of shares of Common
Stock determined by dividing such participant’s payroll deductions accumulated prior to such
Exercise Date and retained in the participant’s account as of the Exercise Date by the applicable
Purchase Price; provided that in no event shall a participant be permitted to purchase during each
Purchase Period more than 1,250 shares of Common Stock (subject to any adjustment pursuant to
Section 19), and provided further that such purchase shall be subject to the limitations set forth
in Sections 3(c) and 13. The Employee may accept the grant of such option (i) with respect to the
first Offering Period under the Plan, by submitting a properly completed subscription agreement in
accordance with the requirements of Section 5(a) on or before the last day of the Enrollment
Window, and (ii) with respect to any future Offering Period under the Plan, by electing to
participate in the Plan in accordance with the requirements of Section 5(b). The Administrator
may, for future
Offering Periods, increase or decrease, in its absolute discretion, the maximum number of
shares of

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Common Stock that a participant may purchase during each Purchase Period of such Offering
Period. Exercise of the option shall occur as provided in Section 8, unless the participant has
withdrawn pursuant to Section 10. The option shall expire on the last day of the Offering Period.

     8. Exercise of Option.

          (a) Unless a participant withdraws from the Plan as provided in Section 10, his or her option
for the purchase of shares of Common Stock shall be exercised automatically on the Exercise Date,
and the maximum number of full shares subject to option shall be purchased for such participant at
the applicable Purchase Price with the accumulated payroll deductions in his or her account. No
fractional shares of Common Stock shall be purchased; any payroll deductions accumulated in a
participant’s account which are not sufficient to purchase a full share shall be retained in the
participant’s account for the subsequent Purchase Period or Offering Period, subject to earlier
withdrawal by the participant as provided in Section 10. Any other monies left over in a
participant’s account after the Exercise Date shall be returned to the participant. During a
participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by
him or her.

          (b) Notwithstanding any contrary Plan provision, if the Administrator determines that, on a
given Exercise Date, the number of shares of Common Stock with respect to which options are to be
exercised may exceed (i) the number of shares of Common Stock that were available for sale under
the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the number of shares of
Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its
sole discretion (x) provide that the Company shall make a pro rata allocation of the shares of
Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as
uniform a manner as shall be practicable and as it shall determine in its sole discretion to be
equitable among all participants exercising options to purchase Common Stock on such Exercise Date,
and continue all Offering Periods then in effect, or (y) provide that the Company shall make a pro
rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or
Exercise Date, as applicable, in as uniform a manner as shall be practicable and as it shall
determine in its sole discretion to be equitable among all participants exercising options to
purchase Common Stock on such Exercise Date, and terminate any or all Offering Periods then in
effect pursuant to Section 20. The Company may make pro rata allocation of the shares of Common
Stock available on the Enrollment Date of any applicable Offering Period pursuant to the preceding
sentence, notwithstanding any authorization of additional shares of Common Stock for issuance under
the Plan by the Company’s shareholders subsequent to such Enrollment Date.

     9. Delivery. As soon as administratively practicable after each Exercise Date on
which a purchase of shares of Common Stock occurs, the Company shall arrange the delivery to each
participant, as appropriate, the shares purchased upon exercise of his or her option in a form
determined by the Administrator (in its sole discretion) and pursuant to rules established by the
Administrator. No participant shall have any voting, dividend, or other shareholder rights with
respect to shares of Common Stock subject to any option granted under the Plan until such shares
have been purchased and delivered to the participant as provided in this Section 9.

     10. Withdrawal.

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          (a) Under procedures established by the Administrator, a participant may withdraw all but not
less than all the payroll deductions credited to his or her account and not yet used to exercise
his or her option under the Plan at any time by (i) submitting to the Company’s payroll office (or
its designee) a written notice of withdrawal in the form prescribed by the Administrator for
such purpose, or (ii) following an electronic or other withdrawal procedure prescribed by the
Administrator. All of the participant’s payroll deductions credited to his or her account shall be
paid to such participant as promptly as practicable after the effective date of his or her
withdrawal and such participant’s option for the Offering Period shall be automatically terminated,
and no further payroll deductions for the purchase of shares shall be made for such Offering
Period. If a participant withdraws from an Offering Period, payroll deductions shall not resume at
the beginning of the succeeding Offering Period unless the participant re-enrolls in the Plan in
accordance with the provisions of Section 5.

          (b) A participant’s withdrawal from an Offering Period shall not have any effect upon his or
her eligibility to participate in any similar plan which may hereafter be adopted by the Company or
in succeeding Offering Periods which commence after the termination of the Offering Period from
which the participant withdraws.

     11. Termination of Employment. Upon a participant’s ceasing to be an Employee, for any
reason, he or she shall be deemed to have elected to withdraw from the Plan and the payroll
deductions credited to such participant’s account during the Offering Period but not yet used to
purchase shares of Common Stock under the Plan shall be returned to such participant or, in the
case of his or her death, to the person or persons entitled thereto under Section 15, and such
participant’s option shall be automatically terminated. The preceding sentence notwithstanding, a
participant who receives payment in lieu of notice of termination of employment shall be treated as
continuing to be an Employee for the participant’s customary number of hours per week of employment
during the period in which the participant is subject to such payment in lieu of notice.

     12. Interest. No interest shall accrue on the payroll deductions of a participant in
the Plan.

     13. Stock.

          (a) Subject to adjustment upon changes in capitalization of the Company as provided in Section
19, the maximum number of shares of Common Stock which shall be made available for sale under the
Plan shall be 1,500,000 shares of Common Stock.

          (b) Shares of Common Stock to be delivered to a participant under the Plan shall be registered
in the name of the participant or in the name of the participant and his or her spouse.

     14. Administration. The Board or a committee of members of the Board who shall be
appointed from time to time by, and shall serve at the pleasure of, the Board, shall administer the
Plan. The Administrator shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility, to adjudicate all disputed
claims filed under the Plan and to establish such procedures that it deems necessary for
administration of the Plan (including, without limitation, to adopt such procedures and sub-plans
as are necessary or appropriate to permit the participation in the Plan by employees who are
foreign nationals or

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employed outside the United States). The Administrator, in its sole
discretion and on such terms and conditions as it may provide, may delegate to one or more
individuals all or any part of its authority and powers under the Plan. Every finding, decision
and determination made by the Administrator (or its designee) shall, to the full extent permitted
by law, be final and binding upon all parties.

     15. Designation of Beneficiary.

          (a) A participant may designate a beneficiary who is to receive any shares of Common Stock and
cash, if any, from the participant’s account under the Plan in the event of such participant’s
death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such
participant of such shares and cash. In addition, a participant may designate a beneficiary who is
to receive any cash from the participant’s account under the Plan in the event of
such participant’s death prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required for such designation to
be effective.

          (b) Such designation of beneficiary may be changed by the participant at any time. In the
event of the death of a participant and in the absence of a beneficiary validly designated under
the Plan who is living at the time of such participant’s death, the Company shall deliver such
shares and/or cash to the executor or administrator of the estate of the participant, or if no such
executor or administrator has been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to the Company, then
to such other person as the Company may designate.

          (c) All beneficiary designations under this Section 15 shall be made in such form and manner
as the Administrator may prescribe from time to time.

     16. Transferability. Neither payroll deductions credited to a participant’s account
nor any rights with regard to the exercise of an option or to receive shares of Common Stock under
the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by
will, the laws of descent and distribution or as provided in Section 15) by the participant. Any
such attempt at assignment, transfer, pledge or other disposition shall be without effect, except
that the Company may treat such act as an election to withdraw from an Offering Period in
accordance with Section 10.

     17. Use of Funds. All payroll deductions received or held by the Company under the
Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated
to segregate such payroll deductions. Until shares of Common Stock are issued under the Plan (as
evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), a participant shall only have the rights of an unsecured creditor with
respect to such shares.

     18. Reports. Individual accounts shall be maintained for each participant in the
Plan. Statements of account shall be given to participating Employees at least annually, which
statements shall set forth the amounts of payroll deductions, the Purchase Price, the number of
shares of Common Stock purchased and the remaining cash balance, if any.

     19. Adjustments, Dissolution, Liquidation or Change of Control.

-9-

 

          (a) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company, or other change in the
corporate structure of the Company affecting the Common Stock such that an adjustment is determined
by the Administrator (in its sole discretion) to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available under the Plan,
then the Administrator shall, in such manner as it may deem equitable, adjust the number and class
of Common Stock which may be delivered under the Plan, the Purchase Price per share and the number
of shares of Common Stock covered by each option under the Plan which has not yet been exercised,
and the numerical limits of Sections 7 and 13.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Offering Period then in progress shall be shortened by setting a
new Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the
consummation of such proposed dissolution or liquidation, unless provided otherwise by the Board.
The New Exercise Date shall be before the date of the Company’s proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten (10) business days
prior
to the New Exercise Date, that the Exercise Date for the participant’s option has been changed
to the New Exercise Date and that the participant’s option shall be exercised automatically on the
New Exercise Date, unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 10.

          (c) Change of Control. In the event of a Change of Control, each outstanding option
shall be assumed or an equivalent option substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. In the event that the successor corporation refuses to
assume or substitute for the option, any Purchase Periods then in progress shall be shortened by
setting a new Exercise Date (the “New Exercise Date”) and any Offering Periods then in progress
shall end on the New Exercise Date. The New Exercise Date shall be before the date of the
Company’s proposed Change of Control. The Board shall notify each participant in writing, at least
ten (10) business days prior to the New Exercise Date, that the Exercise Date for the participant’s
option has been changed to the New Exercise Date and that the participant’s option shall be
exercised automatically on the New Exercise Date, unless prior to such date the participant has
withdrawn from the Offering Period as provided in Section 10.

     20. Amendment or Termination.

          (a) The Administrator may at any time and for any reason terminate or amend the Plan. Except
as provided in Section 19, no such termination can affect options previously granted under the
Plan, provided that an Offering Period may be terminated by the Administrator on any Exercise Date
if the Administrator determines that the termination or suspension of the Plan is in the best
interests of the Company and its stockholders. Except as provided in Section 19 and this Section
20, no amendment may make any change in any option theretofore granted which adversely affects the
rights of any participant. To the extent necessary to comply with Section 423 of the Code (or any
successor rule or provision or any other applicable law, regulation or stock exchange rule), the
Company shall obtain stockholder approval in such a manner and to such a degree as required.

-10-

 

          (b) Without stockholder consent and without regard to whether any participant rights may be
considered to have been “adversely affected,” the Administrator shall be entitled to change the
Offering Periods, limit the frequency and/or number of changes in the amount withheld during an
Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other
than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant
in order to adjust for delays or mistakes in the Company’s processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods and/or accounting and
crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each
participant properly correspond with amounts withheld from the participant’s Compensation, and
establish such other limitations or procedures as the Administrator determines in its sole
discretion advisable which are consistent with the Plan.

          (c) In the event the Administrator determines that the ongoing operation of the Plan may
result in unfavorable financial accounting consequences, the Board may, in its discretion and, to
the extent necessary or desirable, modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to:

               (i) altering the Purchase Price for any Offering Period including an Offering Period underway
at the time of the change in Purchase Price;

               (ii) shortening any Offering Period so that Offering Period ends on a new Exercise Date,
including an Offering Period underway at the time of the Board action; and

               (iii) allocating shares.
Such modifications or amendments shall not require stockholder approval or the consent of any Plan
participants.

     21. Notices. All notices or other communications by a participant to the Company
under or in connection with the Plan shall be deemed to have been duly given when received in the
form specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.

     22. Conditions Upon Issuance of Shares. Shares of Common Stock shall not be issued
with respect to an option under the Plan unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of 1933, as amended,
including the rules and regulations promulgated thereunder, the Exchange Act and the requirements
of any stock exchange upon which the shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.

          As a condition to the exercise of an option, the Company may require the person exercising
such option to represent and warrant at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.

-11-

 

     23. Term of Plan. The Plan shall become effective upon the earlier to occur of its
adoption by the Board or its approval by the stockholders of the Company. It shall continue in
effect until terminated under Section 20.

     24. Automatic Transfer to Low Price Offering Period. To the extent permitted by any
applicable laws, regulations, or stock exchange rules if the Fair Market Value of the Common Stock
on any Exercise Date in an Offering Period is lower than the Fair Market Value of the Common Stock
on the Enrollment Date of such Offering Period, then all participants in such Offering Period shall
be automatically withdrawn from such Offering Period immediately after the exercise of their option
on such Exercise Date and automatically re-enrolled in the immediately following Offering Period.

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SAMPLE SUBSCRIPTION AGREEMENT

CYTOKINETICS, INCORPORATED

2004 EMPLOYEE STOCK PURCHASE PLAN

SUBSCRIPTION AGREEMENT

			
	                    Original Application
	 	Offering Date:                    
	                    Change in Payroll Deduction Rate	 	 
	                    Change of Beneficiary(ies)	 	 

	1.	 	                    hereby elects to participate in the Cytokinetics, Incorporated 2004
Employee Stock Purchase Plan (the “Plan”) and subscribes to purchase shares of the Company’s
Common Stock in accordance with this Subscription Agreement and the Plan. Capitalized terms
not otherwise defined herein will have the meanings given to them in the Plan.
	 
	2.	 	I hereby authorize payroll deductions from each paycheck in the amount of ___% of my
Compensation on each payday (from 1 to 15%) during the Offering Period in accordance with the
Plan. I acknowledge and agree that I may not increase the payroll deduction rate for a
Purchase Period after it has commenced and may only increase payroll deductions for future
Purchase Periods in accordance with the terms of the Plan or as otherwise determined by the
Administrator. (Please note that no fractional percentages are permitted.)
	 
	3.	 	I understand that said payroll deductions shall be accumulated for the purchase of shares of
Common Stock at the applicable Purchase Price determined in accordance with the Plan. I
understand that if I do not withdraw from an Offering Period, any accumulated payroll
deductions will be used to automatically exercise my option.
	 
	4.	 	I have received a copy of the complete Plan. I understand that my participation in the Plan
is in all respects subject to the terms of the Plan. I understand that my ability to exercise
the option under this Subscription Agreement is subject to shareholder approval of the Plan.
	 
	5.	 	Shares of Common Stock purchased for me under the Plan should be issued in the name(s) of
Employee or Employee and Spouse only.
	 
	6.	 	I understand that if I dispose of any shares received by me pursuant to the Plan within 2
years after the Offering Date (the first day of the Offering Period during which I purchased
such shares) or one year after the Exercise Date, I will be treated for federal income tax
purposes as having received ordinary income at the time of such disposition in an amount equal
to the excess of the fair market value of the shares at the time such shares were purchased by
me over the price which I paid for the shares. I hereby agree to notify the Company in
writing

 

 

	 	 	 
	 

	 	within 30 days after the date of any disposition of my shares and I will make adequate
provision for Federal, state or other tax withholding obligations, if any, which arise upon
the disposition of the Common Stock. The Company may, but will not be obligated to,
withhold from my compensation the amount necessary to meet any applicable withholding
obligation including any withholding necessary to make available to the Company any tax
deductions or benefits attributable to sale or early disposition of Common Stock by me. If I
dispose of such shares at any time after the expiration of the 2-year and 1-year holding
periods, I understand that I will be treated for federal income tax purposes as having
received income only at the
time of such disposition, and that such income will be taxed as ordinary income only to the
extent of an amount equal to the lesser of (1) the excess of the fair market value of the
shares at the time of such disposition over the purchase price which I paid for the shares,
or (2) 15% of the fair market value of the shares on the first day of the Offering Period.
The remainder of the gain, if any, recognized on such disposition will be taxed as capital
gain.
	 
	 	 
	7.

	 	I hereby agree to be bound by the terms of the Plan. The effectiveness of this Subscription
Agreement is dependent upon my eligibility to participate in the Plan.
	 
	 	 
	8.

	 	In the event of my death, I hereby designate the following as my beneficiary(ies) to receive
all payments and/or shares due me under the Plan:

	 	 	 	 	 
	 

	 	NAME:  (Please print)	 	 
	 

	 	 	 	 
	 

	 	 	 	                              (First)                                        (Middle)                                        (Last)

	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	Relationship	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	Percentage Benefit
	 	 	 	(Address)
	 
	 	 	 	 	 	 

	 	 	 	 	 
	 

	 	NAME:  (please print)	 	 
	 

	 	 	 	 
	 

	 	 	 	                              (First)                                        (Middle)                                        (Last)

	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	Relationship	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	 

	 	Percentage of Benefit
	 	 	 	(Address)

-2-

 

	 	 	 	 	 	 	 	 	 
	 

	 	Employee’s Social
Security Number:	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	Employee’s Address:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING
PERIODS UNLESS TERMINATED BY ME.
	 
	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Signature of Employee	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Spouse’s Signature (If beneficiary other than spouse)	 	 

-3-

 

SAMPLE WITHDRAWAL NOTICE

CYTOKINETICS, INCORPORATED

2004 EMPLOYEE STOCK PURCHASE PLAN

NOTICE OF WITHDRAWAL

     The undersigned participant in the Offering Period of the Cytokinetics, Incorporated 2004
Employee Stock Purchase Plan which began on                     , ___(the “Offering Date”) hereby
notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby
directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions
credited to his or her account with respect to such Offering Period. The undersigned understands
and agrees that his or her option for such Offering Period will be automatically terminated. The
undersigned understands further that no further payroll deductions will be made for the purchase of
shares in the current Offering Period and the undersigned shall be eligible to participate in
succeeding Offering Periods only by delivering to the Company a new Subscription Agreement.

	 	 	 	 	 	 	 
	 	 	Name and Address of Participant:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Signature:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:

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