Exhibit 10.5
PERSEID THERAPEUTICS
LLC
2009 EQUITY INCENTIVE
PLAN
1. Purposes of the Plan . The
purposes of this Plan are to attract and retain the best available
personnel for positions of substantial responsibility, to provide
additional incentive to Employees, Directors, Members and
Consultants, and to promote the success of the Company’s
business by the grant of Common Units in the Company as Profits
Interest Units.
2. Definitions . As used
herein, the following definitions will apply:
(a) “ Administrator
” means the Board of Managers or any of its Committees as
will be administering the Plan, in accordance with Section 4
of the Plan.
(b) “ Applicable Laws
” means the requirements relating to the administration of
equity-based awards under U.S. state corporation laws, U.S. federal
and state securities laws, the Code, and the applicable law of any
foreign country or jurisdiction where Awards are, or will be,
granted under the Plan.
(c) “ Award ”
means, individually or collectively, a grant under the Plan of
Common Units as Profits Interest Units.
(d) “ Award Agreement
” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the
Plan. The Award Agreement is subject to the terms and conditions of
the Plan.
(e) “ Board ”
means the Board of Managers of the Company.
(f) “ Buy-Out Units
” has the meaning defined in the Investors’ Rights
Agreement.
(g) “ Cause ”
means (i) willful and continued failure to substantially
perform the Service Provider’s duties with the Company (other
than as a result of the Service Provider’s Disability) after
a written demand for substantial performance is delivered to the
Service Provider by the Company, which demand specifically
identifies the manner in which the Company believes that the
Service Provider has not substantially performed the Service
Provider’s duties and that has not been cured within fifteen
(15) days following receipt by the Service Provider of the
written demand; (ii) commission of a felony (other than a
traffic-related offense) that in the written determination of the
Company is likely to cause or has caused material injury to the
Company’s business; (iii) dishonesty with respect to a
significant matter relating to the Company’s business; or
(iv) material breach of any agreement by and between the
Service Provider and the Company, which material breach has not
been cured within fifteen (15) days following receipt by the
Service Provider of written notice from the Company identifying
such material breach.
(h) “ Buy-Out Option
” has the meaning defined in the Investors’ Rights
Agreement.
(i) “ Code ”
means the Internal Revenue Code of 1986, as amended. Any reference
to a section of the Code herein will be a reference to any
successor or amended section of the Code.
(j) “ Committee ”
means a committee of the Board.
(k) “ Common Unit
” has the meaning defined in the Operating
Agreement.
(l) “ Company ”
means Perseid Therapeutics LLC, a Delaware limited liability
company, or any successor thereto.
(m) “ Consultant
” means any person, including an advisor, who is engaged by
the Company or a Parent or Subsidiary to render services to such
entity, including service providers who are employees of entities
engaged to provide such services.
(n) “ Conversion
” means the conversion of the legal form of the Company to a
corporation.
(o) “ Director ”
means a member of the Board.
(p) “ Disability
” means total and permanent disability as defined in Code
Section 22(e)(3).
(q) “ Distribution
Threshold ” has the meaning defined in the Operating
Agreement.
(r) “ Employee ”
means any person, including officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company.
(s) “ Exercise Price
” has the meaning defined in the Investors’ Rights
Agreement.
(t) “ Fair Market Value
” of a Profits Interest Unit means (i) as of any date
prior to the expiration of the Buy-Out Option, (x) the value
of Common Units derived from the deemed value of the Company in
light of the applicable Exercise Price for the Buy-Out Units, the
then fully-diluted capitalization of the Company, and the then
liquidation preferences, participation rights and other terms and
conditions of the Company’s Units less (y) the
applicable Distribution Threshold for the Profits Interest Units
and, (ii) as of the expiration of the Buy-Out Option and any
date following such expiration, (x) the fair market value of
the Common Units determined in good faith by the Administrator less
(y) the applicable Distribution Threshold for the Profits
Interest Units. Assuming there is no change to the initial
structure and capitalization of the Company and assuming there are
no unpaid dividends, the value of a Common Unit upon the exercise
of the Buy-Out Option shall be equal the per unit exercise price of
the Buy-Out Units less the liquidation preference of such
unit.
(u) “ Good Reason
” means: (i) a reduction by the Company in the base
compensation of the Service Provider of ten percent (10%) or
more, except if agreed to in writing by the Service Provider; or
(ii) the relocation of the Service Provider to a facility or a
location more than thirty (30) miles from the Service
Provider’s then present business location, except if agreed
to in writing by the Service Provider; provided, however, that such
events shall not constitute grounds
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for a Good Reason termination unless the Service
Provider has provided notice to the Company of the existence of the
one or more of the above conditions within ninety (90) days of
its initial existence and the Company has been provided at least
thirty (30) days to remedy the condition.
(v) “ Investors’
Rights Agreement ” shall mean that certain
Investors’ Rights Agreement by and among the Company,
Maxygen, Inc. and Astellas Pharma Inc.
(w) “ Joint Venture
Agreement ” means that certain Master Joint Venture
Agreement entered into by the Maxygen, Inc., Astellas Pharma Inc.
and Astellas Bio Inc.
(x) “ Liquidity Event
” has the meaning defined in the Operating
Agreement.
(y) “ Operating
Agreement ” means the Limited Liability Company Agreement
of Perseid Therapeutics LLC, as amended from time to
time.
(z) “ Member ”
means any Member of the Company, as defined in the Operating
Agreement, who is providing services.
(aa) “ Parent ”
means a “parent corporation,” whether now or hereafter
existing, as defined in Code Section 424(e).
(bb) “ Participant
” means the holder of an outstanding Award.
(cc) “ Plan ”
means this 2009 Equity Incentive Plan.
(dd) “ Profits Interest
Units ” shall mean a Common Unit granted as a
“profits interest” unit pursuant the Operating
Agreement and the Plan.
(ee) “ Service Provider
” means an Employee, Member, Director or
Consultant.
(ff) “ Securities Act
” means the Securities Act of 1933, as amended.
(gg) “ Subsidiary
” means a “subsidiary corporation,” whether now
or hereafter existing, as defined in Code
Section 424(f).
(hh) “ Voting Agreement
” means the Voting Agreement dated as of September 18,
2009, by and among the Company, Maxygen, Inc. and Astellas Bio
Inc.
3.
Units Subject to the Plan .
(a) Units Subject to the Plan
. Subject to the provisions of Section 11 of the Plan, the
maximum aggregate number of Common Units that may be subject to
Awards and granted under the Plan is 15,000,000 Common Units. The
Common Units may be authorized but unissued, or reacquired, Common
Units.
(b) Lapsed Awards . If an
Award is forfeited to the Company due to failure to vest or is
repurchased by the Company, Common Units which were subject thereto
will become available for future grant under the Plan (unless the
Plan has terminated).
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(c) Unit Reserve . The
Company, during the term of this Plan, will at all times reserve
and keep available such number of Common Units as will be
sufficient to satisfy the requirements of the Plan.
4. Administration of the Plan
.
(a) Procedure . The Plan will
be administered by (A) the Board or (B) a Committee,
which Committee will be constituted to satisfy Applicable Laws. To
the extent that any such Committee does not include the Minority
Preferred Designee (as defined in the Voting Agreement), then the
Minority Preferred Designee shall be entitled to attend in a
non-voting, observer capacity all meetings of such Committee and to
receive all notices and other communications (including, without
limitation, Actions by Written Consent Without a Meeting) that are
sent to members of such Committee in their capacity as such. Prior
to the expiration of the Buy-Out Option, the vote of the Minority
Preferred Designee shall be required for any amendment to the
Plan.
(b) Powers of the
Administrator . Subject to the provisions of the Plan, and in
the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator will have the
authority, in its discretion:
(i) to select the Service Providers
to whom Awards may be granted hereunder;
(ii) to determine the number of
Common Units to be covered by each Award granted
hereunder;
(iii) to approve forms of Award
Agreements for use under the Plan;
(iv) to determine the terms and
conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder. Such terms and conditions include, but are
not limited to the time or times when Awards may vest (which may be
based on performance criteria), any vesting acceleration or waiver
of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Common Units relating thereto, based in
each case on such factors as the Administrator will
determine;
(v) to construe and interpret the
terms of the Plan and Awards granted pursuant to the
Plan;
(vi) to prescribe, amend and rescind
rules and regulations relating to the Plan, including rules and
regulations relating to sub-plans established for the purpose of
satisfying applicable foreign laws or for qualifying for favorable
tax treatment under applicable foreign laws;
(vii) to modify or amend each Award
(subject to Section 17(c) of the Plan);
(viii) to repurchase Profits
Interest Units pursuant to Section 6(c);
(ix) to authorize any person to
execute on behalf of the Company any instrument required to effect
the grant of an Award previously granted by the
Administrator;
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(x) to allow a Participant to defer
the receipt of the payment of cash or the delivery of property that
otherwise would be due to such Participant under an Award;
and
(xi) to make all other
determinations deemed necessary or advisable for administering the
Plan.
(c) Effect of
Administrator’s Decision . The Administrator’s
decisions, determinations and interpretations will be final and
binding on all Participants and any other holders of
Awards.
5. Eligibility . Awards may
be granted only to Service Providers.
6. Profits Interest Units
.
(a) Profits Interest
Agreement . Subject to the terms of the Plan and the Operating
Agreement, the Administrator may grant Profits Interest Units in
such amounts as the Administrator, in its sole discretion, will
determine. Each Profits Interest grant will be evidenced by a
Profits Interest Agreement that will specify the number of Common
Units that are being granted as Profits Interest Units, the
Distribution Threshold, the vesting schedule, if any, applicable to
the Profits Interest grant, and such other terms and conditions as
the Administrator, in its sole discretion, will
determine.
(b) Forfeiture . If a
Participant’s status as a Service Provider is terminated for
any reason by the Participant or the Company before the Profits
Interest Units have vested, unless otherwise determined by the
Administrator or unless otherwise provided in the Profits Interest
Agreement, the Participant will forfeit all non-vested Profits
Interest Units to the Company for no consideration without further
action by the Company.
(c) Repurchase Provision .
The Administrator shall have the right to repurchase any
Participant’s Profits Interest Units at any time (including
during such time as a Participant is no longer a Service Provider)
for a payment in cash at a price per Unit equal to the per-Profits
Interest Unit Fair Market Value.
(d) Rights as a Member . Each
Participant granted a Profits Interest Award shall agree to be
bound by and comply with the terms of the Operating Agreement and
shall become a party to the Operating Agreement upon executing a
Profits Interest Award Agreement. No certificate representing the
Profits Interest Unit will be issued, and the Profits Interest Unit
shall have no voting or other rights other than as expressly set
forth herein, in the applicable Award Agreement or in the Operating
Agreement.
(e) Payment . Unless
otherwise determined by the Administrator, no amount shall be paid
to the Company for the grant of Profits Interest Units.
(f) Distributions . A
Participant shall be entitled to distributions with respect to a
Profits Interest only as provided in the Operating Agreement (if at
all).
7. Conversion . Subject to
the provisions of the merger, reorganization or other agreement
setting forth the terms of a direct exchange, merger or other
reorganization transaction,
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and subject to the Operating Agreement, upon a
Conversion, all Awards granted under the Plan shall be exchanged
for or converted into shares of the resulting corporation’s
common stock, stock options or other equity-based awards, in each
case with terms substantially equivalent to the terms of the Awards
they are intended to replace.
8. Compliance With Code
Section 409A . Each Award under the Plan is intended to be
exempt from Code Section 409A pursuant to IRS Notice 2005-1,
Q&A 7, and will be construed and interpreted in accordance with
such intent, except as otherwise determined in the sole discretion
of the Administrator.
9. Leaves of Absence/Transfer
Between Locations . Unless the Administrator provides
otherwise, vesting of Awards granted hereunder will be suspended
during any unpaid leave of absence. A Participant will not cease to
be a Service Provider in the case of (i) any leave of absence
approved by the Company or (ii) transfers between locations of
the Company or between the Company and any Subsidiary. No such
leave may exceed three (3) months, unless reemployment upon
expiration of such leave is guaranteed by statute or
contract.
10. Limited Transferability of
Awards . Awards granted under the Plan shall be subject to the
terms and conditions of the Operating Agreement and any special
forfeiture conditions, rights of repurchase, rights of first
refusal or other transfer restrictions as determined by the Board.
Unless determined otherwise by the Administrator, Awards may not be
sold, pledged, assigned, hypothecated, or otherwise transferred in
any manner other than by will or by the laws of descent and
distribution. If the Administrator makes an Award transferable,
such Award may only be transferred (i) by will, (ii) by
the laws of descent and distribution, or (iii) as permitted by
Rule 701 of the Securities Act.
11. Adjustments; Liquidity
Event .
(a) Adjustments . In the
event that any recapitalization, reorganization, merger, split-up,
spin-off, subdivision or combination of Common Units, repurchase,
or exchange of Common Units or other securities of the Company, or
other change in the capital structure of the Company affecting the
Common Units occurs, the Administrator, in order to prevent
diminution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, will adjust the
number and class of Common Units that may be delivered under the
Plan and/or the number, class, and Distribution Threshold of Common
Units covered by each outstanding Award.
(b) Liquidity Event . In the
event of a Liquidity Event (other than a Liquidity Event resulting
from the exercise of the Buy-Out Option, which shall be provided
for under Section 12), each outstanding Award will be subject
to the Operating Agreement and to the agreement governing the
Liquidity Event. The agreement governing the Liquidity Event shall
provide for one more of the following: (i) Awards will be
assumed, or substantially equivalent Awards will be substituted, by
the acquiring or succeeding corporation (or an affiliate thereof)
with appropriate adjustments as to the number and kind of equity
and prices; (ii) outstanding Awards will vest and become
exercisable, realizable, or payable, or restrictions applicable to
an Award will lapse, in whole or in part prior to or upon
consummation of such Liquidity Event; (iii) outstanding Awards
will (A) terminate in exchange for an amount of cash and/or
property, if any, equal to the per- Profits Interest Unit Fair
Market Value multiplied by the number of vested Common Units
underlying the
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Award (and, for the avoidance of doubt, if as of
the date of the occurrence of the transaction the Administrator
determines in good faith that no amount would have been payable
with respect to a Common Unit under the Operating Agreement, then
such Award may be terminated by the Company without payment), or
(B) be replaced with other rights or property selected by the
Administrator in its sole discretion; or (iv) any combination
of the foregoing. In taking any of the actions permitted under this
subsection 11(b), the Administrator will not be obligated to treat
all Awards, all Awards held by a Participant, or all Awards of the
same type, similarly. Notwithstanding anything in this
Section 11(b) to the contrary, if a payment under an Award
Agreement is subject to Code Section 409A and if the change in
control definition contained in the Award Agreement does not comply
with the definition of “change of control” for purposes
of a distribution under Code Section 409A, then any payment of
an amount that is otherwise accelerated under this Section will be
delayed until the earliest time that such payment would be
permissible under Code Section 409A without triggering any
penalties applicable under Code Section 409A.
12. Exercise of Buy-Out
Option . Upon the consummation of a Liquidity Event resulting
from the exercise of the Buy-Out Option (the “Option
Closing”), (a) all outstanding vested Awards shall
terminate in exchange for a cash payment for each vested Unit equal
to the per-Profits Interest Unit Fair Market Value; and
(b) all outstanding unvested Awards shall have their remaining
vesting schedules automatically amended so as to vest 100% on the
earliest of the following dates: (A) the six-month anniversary
of the Option Closing, subject to the holder remaining a Service
Provider through such new vesting date; (B) the involuntary
termination of the Service Provider without Cause, other than due
to death or Disability, (C) the voluntary termination of the
Service Provider for Good Reason, or (D) such earlier time as
is specified by the Administrator in its sole discretion, at which
time Awards that vest shall terminate in exchange for a cash
payment for each Unit equal to the per-Profits Interest Unit Fair
Market Value. Unvested Awards subject to the previous sentence will
not vest if, prior to the six-month anniversary of the Option
Closing, the Participant voluntarily terminates as a Service
Provider without Good Reason or is terminated for Cause and such
Awards will be forfeited to the Company for no consideration
without further action by the Company upon such termination. Prior
to the earlier of the consummation of a Liquidity Event (including
a Liquidity Event resulting from the exercise of the Buy-Out
Option) or their repurchase pursuant to Section 6(c), the
Profits Interest Units shall not be entitled to receipt of any
payment pursuant to the terms of this Plan.
Example
: The Buy-Out Option is exercised on
the 2-year anniversary of the closing of the transactions
establishing the Company (the “Closing”), and the
holders of Perseid Therapeutics LLC Common Units receive $0.62 per
Unit. Employee Alpha was granted 40,000 Common Units as Profits
Interest Units on the Closing, (the “Alpha Units”) with
a $0.06 per Unit Distribution Threshold. The Alpha Units had an
original vesting schedule where 25% of the Alpha Units vested on
the first anniversary of the grant date, and 1/48
th of the Alpha Units granted vested each month
thereafter, so as to be 100% vested on the fourth anniversary of
the Alpha Units grant date, subject to the Service Provider
remaining as such through each vesting date. Accordingly, the Alpha
Units are 50% vested on the date the Buy-Out Option is exercised.
At this time, Employee Alpha receives $11,200 in respect of the
vested Alpha Units (20,000 times the per-Profits Interest Unit Fair
Market Value, which is $0.56 ($0.62 minus the $0.06 Distribution
Threshold)). The unvested Alpha Units have their remaining vesting
schedule automatically adjusted so the Common Units vest upon the
first to occur of: (A) the six-month anniversary of the Option
Closing, subject to the holder remaining a Service Provider through
such new vesting date; (B) the involuntary termination of
the
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Service Provider without Cause, other than due
to death or Disability, (C) the voluntary termination of the
Service Provider for Good Reason, or (D) such earlier time as
is specified by the Administrator in its sole discretion. Assuming
Employee Alpha remained employed through the six-month anniversary
of the Option Closing, then the remaining Alpha Units will vest and
Employee Alpha will receive a payment equal to the amount payable
for such Units under the Buy-Out Option of $11,200 (20,000 times
the per-Profits Interest Unit Fair Market Value of $0.56). The
foregoing example assumes no change to the initial structure and
capitalization of the Company
