EMPLOYEE
REPURCHASE RIGHT AND
PERMANENT RIGHT OF
FIRST REFUSAL
XOMA CORPORATION
RESTRICTED STOCK PLAN
RESTRICTED STOCK PURCHASE AGREEMENT
Agreement made as of the day of , 19 by and among XOMA Corporation, a
Delaware corporation (the "Corporation"), ,a key employee (the "Purchaser") of
the Corporation and a participant in the Corporation's Restricted Stock Plan
(the "Plan"), and __________, the Purchaser's spouse.
I. PURCHASE OF SHARES
1.1 Purchase. The Purchaser hereby purchases, and the Corporation hereby
sells to the Purchaser, __________ shares of the Corporation's common stock (the
"Purchased Shares") at a purchase price of $ per share (the "Purchase Price")
pursuant to the provisions of the Plan.
1.2 Payment. Concurrently with the execution of this Agreement, the
Purchaser shall deliver to the Corporation the full amount of the Purchase
Price, payable (i) in cash or cash equivalent; (ii) in shares of common stock
held by the Purchaser; (iii) payment effected through a broker-dealer sale and
remittance procedure pursuant to which the Purchaser (A) shall provide
irrevocable written instructions to the designated broker-dealer to effect the
immediate sale of the Purchased Shares and remit to the Corporation, out of the
sale proceeds, an amount equal to the aggregate Purchase Price plus all
applicable Federal and State income and employment taxes required to be withheld
by the Corporation by reason of such purchase and (B) shall provide written
directives to the Corporation to deliver the certificates for the Purchased
Shares directly to such broker-dealer; or (iv) by promissory note authorized by
the Plan Administrator and payable to the Corporation's order.
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1.3 Stockholder Rights. As soon as reasonably practicable following receipt
of the Section 1.2 payment, the Corporation shall issue a stock certificate for
the Purchased Shares to the Purchaser. Upon such issuance and until such time as
the Corporation actually exercises its repurchase rights under this Agreement,
Purchaser (or any successor in interest) shall have all the rights of a
stockholder (including voting and dividend rights) with respect to the Purchased
Shares, subject, however, to the transfer restrictions of Article II.
II. TRANSFER RESTRICTIONS
2.1 Restriction on Transfer. Purchaser shall not transfer, assign, encumber
or otherwise dispose of any of the Purchased Shares which are subject to the
Corporation's Repurchase Right under Article III or the Corporation's First
Refusal Right under Article IV. Such restrictions on transfer, however, shall
not be applicable to (i) a gratuitous transfer of the Purchased Shares made to
the Purchaser's spouse or issue, including adopted children, or to a trust for
the exclusive benefit of the Purchaser or the Purchaser's spouse or issue, (ii)
a transfer of title to the Purchased Shares effected pursuant to the Purchaser's
will or the laws of interstate succession, or (iii) a transfer to the
Corporation in pledge as security for any purchase-money indebtedness incurred
in the acquisition of the Purchased Shares.
2.2 Transferee Obligations. Each person (other than the Corporation) to
whom the Purchased Shares are transferred by means of one of the permitted
transfers specified in Section 2.1 must, as a condition precedent to the
validity of such transfer, acknowledge in writing to the Corporation that such
person is bound by the provisions of this Agreement and that the transferred
shares are subject to both the Corporation's Repurchase Right and the
Corporation's First Refusal Right created hereunder, to the same extent such
shares would be so subject if retained by the Purchaser.
2.3 Definition of Owner. For purposes of Articles III and IV, the term
"Owner" shall include the Purchaser and all subsequent holders of the Purchased
Shares who derive their chain of ownership through a permitted transfer from the
Purchaser in accordance with Section 2.1.
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III. REPURCHASE RIGHT
3.1 Grant. The Corporation is hereby granted the right (the "Repurchase
Right"), exercisable at any time during the sixty (60)-day period following the
date the Purchaser ceases for any reason to be an Employee of the Corporation or
(if later) during the sixty (60)-day period following the date of this
Agreement, to repurchase at the lesser of (i) the Purchase Price or (ii) the
fair market value of the Purchased Shares (adjusted to reflect the formula price
restrictions of Section 4.4) any or all of the Purchased Shares in which the
Purchaser has not acquired a vested interest in accordance with the vesting
provisions of Section 3.3 (such shares to be hereinafter called the "Unvested
Shares"). For purposes of this Agreement, the Purchaser shall be deemed to be an
Employee of the Corporation for so long as the Purchaser remains an active
employee of the Corporation or any subsidiary corporation (as defined in Section
5.4).
3.2 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 sixty (60)-day period specified in Section 3.1.
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. Prior to the close of business
on the date specified for the repurchase, the Owner shall deliver to the
Secretary of the Corporation the certificates representing the Unvested Shares
to be repurchased, each certificate to be properly endorsed for transfer. The
Corporation shall concurrently with the receipt of such stock certificates pay
to the Owner, in cash or cash equivalents (including the cancellation of any
outstanding purchase-money indebtedness), an amount equal to the Purchase Price
previously paid for the Unvested Shares which are to be repurchased. Such
Unvested Shares shall thereupon be canceled and cease to be issued and
outstanding shares of the Corporation's common stock.
3.3 Termination of the Repurchase Right. The Repurchase Right shall
terminate, and the Owner shall accordingly vest in the Purchased Shares, in
accordance with the following provisions:
(a) The Repurchase Right shall terminate with respect to any Unvested
Shares for which it is not timely exercised under Section 3.2.
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(b) The Repurchase Right shall terminate, and cease to be exercisable, with
respect to any and all Purchased Shares in which the Purchaser vests in
accordance with the schedule below. Accordingly, provided the Purchaser
continues to be an Employee of the Corporation, the Purchaser shall acquire a
vested interest in, and the Repurchase Right shall lapse with respect to, one or
more Purchased Shares in accordance with the following vesting provisions:
(i) The Purchaser shall not acquire any vested interest in, nor shall the
Repurchase Right lapse with respect to, any Purchased Shares during the initial
__________ (_) calendar month period measured from the Grant Date of the Option.
(ii) Upon the expiration of such initial ________ (_)-month period, the
Purchaser shall acquire a vested interest in, and the Repurchase Right shall
lapse with respect to, that number of Purchased Shares equal to
_________________ percent (_%) of the Total Purchasable Shares under the Option
(without adjustment for shares already Purchased pursuant to such Option).
(iii) The Purchaser shall acquire a vested interest in, and the Repurchase
Right shall lapse with respect to, the remaining Purchased Shares in a series of
____________ (__)consecutive monthly installments, each equal to _____________
(__) of the Purchased Shares, with the first such installment to vest at the end
of the _____________ (__) calendar month period measured from the Grant Date.
3.4 Fractional Shares. No fractional shares shall be repurchased by the
Corporation. Accordingly, should the Repurchase Right extend to a fractional
share (in accordance with the vesting computation provisions of Section 3.3) at
the time the Purchaser ceases to be an Employee of the Corporation, then such
fractional share shall be added to any fractional share in which the Purchaser
is then vested in order to make one whole vested share no longer subject to the
Repurchase Right.
3.5 Additional Shares or Substituted Securities. Should any change be made
to the Corporation's outstanding Common Stock by reason of any stock dividend,
stock split, combination of shares, recapitalization or other transaction
affecting the Corporation's outstanding Common Stock as a class 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 Purchased
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Shares shall be immediately subject to the Repurchase Right, but only to the
extent the Purchased Shares are at the time covered by such right, and
appropriate adjustments to reflect the distribution of such securities or
property shall be made to the number of Purchased Shares for all purposes
relating to the Repurchase Right, and the Corporation (or its successor) may
require the establishment of an escrow account for any money (other than cash
dividends) distributed with respect to the Purchased Shares covered by the
Repurchase Right in order to facilitate the exercise of such right. Appropriate
adjustments shall also be made 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 Corporation's capital structure; provided, however, that
the aggregate purchase price shall remain the same.
3.6 Permanent Right of First Refusal. Any shares in which the Purchaser
acquires a vested interest under this Article III may not be transferred,
assigned, encumbered or otherwise made the subject of disposition in
contravention of the Corporation's First Refusal Right under Article IV.
IV. PERMANENT RIGHT OF FIRST REFUSAL
4.1 Grant. The Corporation is hereby granted a permanent right of first
refusal ("First Refusal Right") with respect to each and every proposed
disposition of the Purchased Shares by the Purchaser, other than a permitted
transfer under Section 2.1. The First Refusal Right shall be a permanent
restriction on the Purchased Shares and shall accordingly bind the Purchaser,
any other Owner of the Purchased Shares and each and every other holder of
record of the Purchased Shares, all of whom shall be collectively referred to in
this Article IV as the "Holder."
4.2 Notice of Intended Disposition. In the event the Holder desires to sell
or otherwise transfer for value any or all of the Purchased Shares which are
vested pursuant to the provisions of Section 3.3 (the vested shares which are
the subject of such offer to be hereinafter called, solely for purposes of this
Article IV, the "Target Shares"), the Holder shall promptly deliver to the
Secretary of the Corporation written notice of such intention, including the
number of Purchased Shares the Holder wishes to sell and a summary of the terms
and conditions of any bona fide third-party offer received for the shares (the
"Disposition Notice").
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4.3 Exercise of Right. The Corporation (or its assigns) shall, for a period
of sixty (60) days following receipt of the Disposition Notice under paragraph
4.2, have the right to repurchase all of the Target Shares specified in the
Disposition Notice at a price per share determined in accordance with the
Section 4.4 formula. Such right shall be exercisable by written notice delivered
to the Holder prior to the expiration of the sixty (60) day exercise period. If
such right is exercised, the Corporation (or its assigns) shall effect the
repurchase of the Target Shares, including payment of the formula price, not
more than sixty (60) days thereafter; and at such time the Holder shall deliver
to the Corporation the certificates representing the Target Shares to be
repurchased, each certificate to be properly endorsed for transfer.
4.4 Formula Price. The price per share at which the Corporation may
exercise its First Refusal Right under Section 4.3 shall be determined in
accordance with the following formula:
X = M - $ __ , where
X = the price per share at which the Corporation may repurchase the Target
Shares, and
M = the fair market value per share of the Target Shares (determined under
Section 4.7 without regard to the Corporation's permanent First Refusal Right)
on the date immediately preceding the date such right is exercised.
4.5 Non-Exercise of Right. In the event the Exercise Notice is not given to
the Holder within sixty (60) days following the date of the Corporation's
receipt of the Disposition Notice, the Holder shall have a period of fifteen
(15) days thereafter in which to sell or otherwise dispose of the Target Shares
(I) at a price not less than that, and on terms no more favorable than those,
set forth in the Disposition Notice or, if no terms are set forth in the
Disposition Notice, (II) for a current cash payment equal to the fair market
value (adjusted to reflect the First Refusal Right) of the Target Shares. The
third-party purchaser and all subsequent purchasers of the Target Shares shall
acquire the Target Shares subject to the First Refusal Right under this Article
IV. In the event the Holder does not effect an authorized sale or other
disposition of the Target Shares within the specified fifteen (15) day period,
the Holder must once again provide the requisite Section 4.2 notice prior to any
subsequent disposition of the Purchased Shares.
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4.6 Recapitalization. In the event of any stock dividends stock split,
recapitalization or other transaction affecting the Corporation's outstanding
securities without receipt of consideration, then any new, substituted or
additional securities or other property (including money paid other than as a
cash dividend) which is by reason of such transaction distributed with respect
to the Purchased Shares shall be immediately subject to the Corporation's First
Refusal Rights under this Article IV, but only to the extent the Shares are at
the time covered by such right.
4.7 Valuation. For purposes of determining the Section 4.4 formula price,
the fair market value per share of the Target Shares or the relevant valuation
date shall be determined as follows:
(i) If the Corporation's common stock is not at the time listed or admitted
to trading on any stock exchange, but is traded in the over-the-counter market,
the fair market value shall be the closing selling price of one share of such
common stock on the valuation date in the over-the-counter market, as such price
is quoted on the NASDAQ National Market System. If there are no reported closing
selling price for the valuation date, then the closing selling price on the last
date preceding the valuation date for which such price is granted shall be
determinative of fair market value.
(ii) If the Corporation's common stock is at the time listed or admitted to
trading on any stock exchange, the fair market value shall be the closing
selling price of one share of common stock on the valuation date on the stock
exchange determined by the Plan Administrator to be the primary market for the
common stock, as such price is officially quoted on such exchange. If there is
no reported sale of common stock on such exchange on the valuation date, then
the fair market value shall be the closing selling price on the exchange on the
last date preceding the valuation date for which such quotation exists.
4.8 Nonlapse. The First Refusal Right under this Article IV is intended to
be a "restriction which by its terms will never lapse" within the meaning of
Section 83(d) of the Internal Revenue Code and shall accordingly be binding upon
each and every Holder of the Purchased Shares.
4.9 Transferee Obligations. Each person to whom the Target Shares are
transferred by means of a transfer effected in accordance with this Article IV
must as a condition prece-
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dent to the validity of such transfer acknowledge in writing to the Corporation
that such person is bound by the provisions of this Agreement and that the
transferred shares shall remain subject to the Corporation's First Refusal Right
hereunder.
V. GENERAL PROVISIONS APPLICABLE TO REPURCHASE RIGHT AND FIRST REFUSAL RIGHT.
5.1 Assignment. The Corporation may assign its Repurchase Right under
Article III and/or its First Refusal Right under Article IV to any person or
entity selected by the Corporation's Board of Directors, including (without
limitation) one or more shareholders of the Corporation.
If the assignee of the Repurchase Right is other than a subsidiary
corporation of the Corporation, then such assignee must make a cash payment to
the Corporation, upon the assignment of the Repurchase Right, in an amount equal
to the excess (if any) of the fair market value of the Unvested Shares at the
time subject to the Repurchase Right and the aggregate repurchase price payable
for such Unvested Shares.
5.2 Notices. Any notice required in connection with the exercise of the
Corporation's Repurchase Right or First Refusal Right shall be given in writing
and shall be deemed effective upon personal delivery 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 10 days advance written notice under this Section 5.2 to all other
parties to this Agreement.
5.3 No Waiver. The failure of the Corporation (or its assigns) in any
instance to exercise the Repurchase Right granted under Article III or the First
Refusal Right under Article IV 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 with the Corporation. 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.
5.4 Definitions. For purposes of this Agreement, each corporation (other
than the Corporation) in an unbroken
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chain of corporations beginning with the Corporation shall be considered to be a
subsidiary of the Corporation, 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.
5.5 Cancellation of Shares. If the Corporation (or its assigns) shall make
available, at the time and place and in the amount and form provided in this
Agreement, the consideration for the Purchased 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
Corporation (or its assigns) shall be deemed the owner and holder of such
shares, whether or not the certificates therefor have been delivered as required
by this Agreement.
5.6 Legend. All certificates representing the Purchased Shares shall be
endorsed with the following legend:
"THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY MAY NOT BE SOLD,
ASSIGNED, TRANSFERRED, ENCUMBERED, OR IN ANY MANNER DISPOSED OF EXCEPT
IN CONFORMITY WITH THE TERMS OF A WRITTEN AGREEMENT, DATED
____________, 19 _ , BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF
THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH
AGREEMENT GRANTS THE CORPORATION (AND ITS ASSIGNS) CERTAIN REPURCHASE
RIGHTS AND RIGHTS OF FIRST REFUSAL TO REPURCHASE THE SHARES UPON ANY
PROPOSED SALE, ASSIGNMENT, TRANSFER, ENCUMBRANCE OR OTHER DISPOSITION
OF THE SHARES OR UPON TERMINATION OF SERVICE WITH THE CORPORATION. THE
FIRST REFUSAL RIGHTS ARE PERMANENT AND WILL BE BINDING UPON EACH AND
EVERY HOLDER OF THE SHARES. THE CORPORATION WILL UPON WRITTEN REQUEST
FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE."
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VI. MISCELLANEOUS PROVISIONS
6.1 Purchaser Undertaking. Purchaser hereby agrees to take whatever
additional action and execute whatever additional documents the Corporation may
in its judgment deem necessary or advisable in order to carry out or effect one
or more of the obligations or restrictions imposed on either the Purchaser or
the Purchased Shares pursuant to the express provisions of this Agreement.
6.2 Agreement is Entire Contract. This Agreement constitutes the entire
contract between the parties hereto with regard to the subject matter hereof.
This Agreement is made pursuant to the provisions of the Plan and shall in all
respects be construed in conformity with the express terms and provisions of the
Plan.
6.3 No Employment Contract. Nothing in this Agreement or in the Plan shall
confer upon the Purchaser any right to continue in the employ of the Corporation
(or any subsidiary corporation of the Corporation employing Purchaser) for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any subsidiary corporation of the Corporation
employing Purchaser) or the Purchaser, which rights are hereby expressly
reserved by each, to terminate the Employee status of Purchaser at any time for
any reason whatsoever, with or without cause.
6.4 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.
6.5 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
6.6 Successors and Assigns. The provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and the Purchaser and the Purchaser'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.
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6.7 Power of Attorney. Purchaser's spouse hereby appoints Purchaser his or
her true and lawful attorney in fact, for him or her and in his or her name,
place and xxxxx, and for his or her use and benefit, to agree to any amendment
or modification of this Agreement and to execute such further instruments and
take such further actions as may reasonably be necessary to carry out the intent
of this Agreement. Purchaser's spouse further gives and grants unto Purchaser as
his or her attorney in fact full power and authority to do and perform every act
necessary and proper to be done in the exercise of any of the foregoing powers
as fully as he or she might or could do if personally present, with full power
of substitution and revocation, hereby ratifying and confirming all the
Purchaser shall lawfully do and cause to be done by virtue of this power of
attorney.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
XOMA CORPORATION
By
Address:___________________________________
___________________________________
___________________________________
___________________________________
, Purchaser
Address:___________________________________
___________________________________
___________________________________
___________________________________
, Purchaser Spouse
