PEREGRINE PHARMACEUTICALS, INC. INCENTIVE STOCK OPTION AGREEMENT
PEREGRINE
PHARMACEUTICALS, INC.
2005
STOCK INCENTIVE PLAN
INCENTIVE
STOCK OPTION AGREEMENT (the “Agreement”) dated as of _________, between
PEREGRINE PHARMACEUTICALS, INC., a Delaware corporation (collectively with
its
direct and indirect subsidiaries, the “Company”), and ________, an employee of
the Company (“Optionee” or “Participant”).
The
Compensation Committee of the Board of Directors of the Company (the
“Committee”) has determined that the objectives of the Peregrine
Pharmaceuticals, Inc. 2005 Stock Incentive Plan (the “Plan”) will be furthered
by granting to Optionee options and/or other incentives pursuant to the Plan.
Any capitalized terms not otherwise defined in this Agreement shall have the
meaning ascribed to them in the Plan.
In
consideration of the foregoing and of the mutual undertakings set forth in
this
Agreement, the Company and Optionee agree as follows:
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Grant
of Option
and other rights.
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(a) The
Company hereby grants to Optionee options (the “Options”) to purchase
_________ Shares
of
Common Stock of the Company (the “Shares”) at a purchase price of ___ per Share.
It is intended that _______ of the Options qualify as "Incentive Stock Options"
to the maximum extent permissible under the Internal Revenue Code.
(b) For
purposes of this Agreement, the term “Cause” means the Participant’s
(i)
embezzlement, fraud or any conduct related to the performance of the
Participant’s duties for the Company that constitutes a crime, (ii)
unauthorized disclosure of confidential information or breach of any
confidentiality or non-disclosure agreement with the Company or any of its
Subsidiaries, (iii)
willful
and habitual breach of duties,
after
notice to the Participant affording the Participant a reasonable opportunity
to
cure, or (iv)
breach
or violation of any statutory or common law duty of loyalty to the Company
or
the Company’s Affiliates.
2. Exercisability. Subject
to the further terms of this Agreement, the Options shall vest and become
exercisable in accordance with Schedule 1 hereto. Unless earlier terminated
pursuant to the provisions of the Plan or paragraph 5 of this Agreement, the
unexercised portion of the Options shall expire and cease to be exercisable
at
5:00 pm PST ten (10) years from the date of this Agreement. This Agreement
shall
not confer upon Optionee any right with respect to continuation of her/his
employment or consulting relationship with the Company, nor shall it interfere
with or affect in any manner the right or power of the Company, or a parent
or
subsidiary of the Company, to terminate any agreement with Optionee in
accordance with the terms thereof.
3. Method
of Exercise.
The
Options or any part of them may be exercised only by the giving of written
notice to the Company in substantially the form annexed hereto as Schedule
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hereto, or on such other form and in such other manner as the Committee shall
prescribe from time to time. Such written notice must be accompanied by payment
of the full purchase price for the number of Shares with respect to which the
Options are being exercised. Such payment may be made by one or a combination
of
the following methods: (i) by a check acceptable to the Company; or
(ii)
by
such
other method as the Committee may authorize including, in the discretion of
the
Committee, the recourse promissory note of the Optionee. The date of exercise
of
the Options shall be the date on which written notice of exercise is hand
delivered to the Company and payment of the full purchase price for the number
of Shares with respect to which the Options are being exercised, during normal
business hours, at its address as provided in Section 7 of this Agreement,
or,
if mailed, the date on which it is postmarked, provided such notice is actually
received.
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4. Optionee's
Representations.
As a
condition to the exercise of an Option, the Company may require Optionee to
make
any representation and warranty to the Company as may be required by any
applicable law or regulation.
5. Termination
of Employment; Death.
Upon
termination of Optionee’s employment with or status as a consultant to, the
Company for any reason, the Options will immediately terminate and expire,
except as provided in paragraphs (a) or (b) of this Section 5.
(a) If
Optionee resigns as an employee of, or consultant to, the Company with the
Company's prior written consent, or if the Company terminates Optionee's
employment by the Company without Cause (as defined herein), the Option will
be
exercisable but only to the extent it
was
exercisable at the time of such termination or resignation and only until the
earlier of the expiration date of the Option, determined pursuant to Section
2
of this Agreement, or the expiration of three (3) months following such
termination or resignation.
(b) If
Optionee dies or becomes Permanently Disabled while employed by, or rendering
services as a consultant to, the Company or after Optionee's employment or
status as a consultant to the Company terminates but during a period
in
which the Option is exercisable pursuant to paragraph (a) of
this
Section 5, the Option will be exercisable but only to the extent it was
exercisable at the time of death and only until the earlier of the expiration
date of the Option, determined pursuant to Section 2 of this Agreement, or
the
expiration of twelve (12) months following the date of Optionee's
death.
6. Plan
Provisions to Prevail.
This
Agreement is subject to all of the terms and provisions of the Plan. Without
limiting the generality of the foregoing, by entering into this Agreement
Optionee agrees that no member of the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any award
thereunder or this Agreement. In the event that there is any inconsistency
between the provisions of this Agreement and of the Plan, the provisions of
the
Plan shall govern.
7. Notices.
Any
notice to be given to the Company hereunder shall be in writing and shall be
addressed to Xxxx X. Xxxxx, Corporate Secretary, or at such other address as
the
Company may hereafter designate to Optionee by notice as provided in this
Section 7. Any notice to be given to Optionee hereunder shall be addressed
to
Optionee at the address set forth beneath her/his signature hereto, or at such
other address as Optionee may hereafter designate to the Company by notice
as
provided herein. A notice shall be deemed to have been duly given when
personally delivered or mailed by registered or certified mail to the party
entitled to receive it. Optionee expressly agrees to notify the Company of
any
transfer of the Common Stock or other action reasonably expected to cause any
Option designated as an Incentive Stock Option to be retroactively classified
for tax purposes as a Non-Qualified Option.
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8. Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and the successors and assigns of the Company and to the extent consistent
with
Section 5 of this Agreement and with the Plan, the heirs and personal
representatives of Optionee.
9. Governing
Law.
This
Agreement shall be interpreted, construed and administered in accordance with
the laws of the State of California as they apply to contracts made, delivered
and performed in the State of California. Any dispute arising hereunder shall
be
resolved by binding arbitration before the American Arbitration Association
under its Commercial Arbitration Rules, before a single arbitrator in Orange
County, California. The parties will mutually determine the arbitrator from
a
list of arbitrators obtained from the American Arbitration Association office
located in Orange County, California. If the parties are unable to agree on
the
arbitrator, the arbitrator will be selected by the American Arbitration
Association with a preference for selecting a retired federal district judge
or
state superior court judge as the arbitrator.
10. Withholding.
If the
Optionee takes any action that would cause the Options to be classified as
nonqualified options for tax purposes, the Optionee will promptly provide the
necessary tax withholding, if applicable, in the Committee’s view, pursuant to
Article IV, Section V of the Plan.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
and year first written above.
PEREGRINE
PHARMACEUTICALS, INC.
By:________________________________
OPTIONEE:
__________________________________
Signature
Name:____________________________
Social
Security Number:
_________________________________
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SCHEDULE
1 TO INCENTIVE STOCK OPTION AGREEMENT
PURSUANT
TO PEREGRINE PHARMACEUTICALS, INC., INC.
2005
STOCK INCENTIVE PLAN
(This
Schedule 1 shall be incorporated by reference and become a part of the Incentive
Stock Option Agreement between the Company and the Optionee.)
I. INCENTIVE
STOCK OPTIONS:
Incentive stock options do not result in compensation income on exercise by
the
Optionee and result in capital gain or loss when the stock is sold. Incentive
stock options may only be issued to employees of the Company. There are a number
of other legal requirements that the Company and the Optionee must satisfy
in
order for options to be classified as incentive stock options. Some of the
rules
affecting incentive stock options are (a) the stock received on the exercise
of
an incentive stock option must be held for two years from the date of grant
of
the option and one year from the date of exercise of the option, (b) no more
than $100,000 in options may first become exercisable in any one year, and
(c)
the exercise of the incentive stock option may generate an item of tax
preference for purposes of calculating the alternative minimum tax liability
of
the Optionee. Violation of any of those requirements by the Company or the
Optionee can result in the Option being treated as a Non-qualified stock
option.
Date
of
Grant:
Earliest
Exercise Date:
Exercise
Price:
Number
of
Shares:
Vesting
Schedule:
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Vesting
Date
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Options
Vested
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Expiration
Date:
Governing
Law; Resolution of Disputes.
This
Agreement has been made, executed and delivered in, and the interpretation,
performance and enforcement hereof shall be governed by and construed under
the
laws of the State of California. Any dispute arising hereunder shall be resolved
by binding arbitration before the American Arbitration Association under its
Commercial Arbitration Rules, before a single arbitrator in Orange County,
California. The parties will mutually determine the arbitrator from a list
of
arbitrators obtained from the American Arbitration Association office located
in
Orange County, California. If the parties are unable to agree on the arbitrator,
the arbitrator will be selected by the American Arbitration Association with
a
preference for selecting a retired federal district judge or state superior
court judge as the arbitrator.
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I
have
read the Peregrine Pharmaceuticals, Inc. 2005 Stock Incentive Plan, the terms
of
which are incorporated herein. As Optionee, I hereby acknowledge that as of
the
date of the Options referenced above, it sets forth the entire understanding
between the undersigned Optionee and the Company and its Affiliates regarding
the Options and supersedes all prior oral and written agreements on that subject
with the exception of (i) the options and any other stock awards previously
granted and delivered to the undersigned under stock award plans of the Company,
and (ii) the following agreements only:
NONE _______
(Initial)
OTHER______________________________________________________________________
IN
WITNESS WHEREOF, this Incentive Stock Option Agreement pursuant to the Peregrine
Pharmaceuticals, Inc. 2005 Stock Incentive Plan has been delivered by the
parties hereto.
| Date: ______________ |
“Optionee”
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_________________________________
Name _________________________________
Address
_______________________________
______________________________________
_________________________________
Social
Security Number ____________________
The
Company hereby agrees to
all
the
terms of the Agreement.
Peregrine
Pharmaceuticals, Inc.
By:_____________________________________
Name:
Title:
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SCHEDULE
2
PEREGRINE
PHARMACEUTICALS, INC.
EXERCISE
NOTICE
Peregrine
Pharmaceuticals, Inc.
00000
Xxxxxxxx Xxxxxx
Xxxxxx,
XX 00000
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1.
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Exercise
of Option.
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Effective
as of today, ______________,
_________________
the
undersigned (“Optionee”) hereby elects to exercise Optionee's Options to
purchase _______
shares
of Common Stock (the “Shares”) of Peregrine Pharmaceuticals, Inc. (the
“Company”) under and pursuant to the Incentive Stock Option Agreement dated as
of ___________________
(the
“Option Agreement”) between the Company and Optionee pursuant to the Option
Agreement.
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2.
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Rights
as Shareholder
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(i) Until
the
certificate evidencing the Shares is issued (as evidenced by the appropriate
entry on the stock ownership register of the Company or of a duly authorized
transfer agent of the Company), no right to receive distributions or any other
rights as a shareholder shall exist with respect to the Shares, notwithstanding
the exercise of the Option. The Company shall issue (or cause to be issued)
such
certificate promptly upon exercise of the Option.
(ii) Upon
issuance of the certificate, Optionee shall enjoy rights as a shareholder of
Common Stock until such time as Optionee disposes of the Shares or the
Company.
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3.
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Governing
Law; Severability.
This Notice shall be governed by and construed in accordance with
the laws
of the State of California excluding that body of law pertaining
to
conflicts of law. Should any provision of this Notice be determined
by a
court of law to be illegal or unenforceable, the other provisions
shall
nevertheless remain effective and shall remain enforceable. Any dispute
arising hereunder shall be resolved by binding arbitration before
the
American Arbitration Association under its Commercial Arbitration
Rules,
before a single arbitrator in Orange County. The parties will mutually
determine the arbitrator from a list of arbitrators obtained from
the
American Arbitration Association office located in Orange County.
If the
parties are unable to agree on the arbitrator, the arbitrator will
be
selected by the American Arbitration Association with a preference
for
selecting a retired federal district judge or state superior court
judge
as the arbitrator.
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4.
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Notices.
Any notice required or permitted hereunder shall be given in writing
and
shall be deemed effectively given upon personal delivery or upon
deposit
in the United States mail by certified mail, with postage and fees
prepaid, addressed to the other party at its address as shown below
beneath its signature, or to such other address as such party may
designate in writing from time to time to the other
party.
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5.
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Further
Instruments.
The parties agree to execute such further instruments and to take
such
further action as may be reasonably necessary to carry out the purposes
and intent of this Notice.
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6.
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Delivery
of Payment.
Optionee herewith delivers to the Company the full purchase price
for the
Shares as set forth in paragraph 1 of the Option
Agreement.
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7.
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Entire
Agreement.
The Option Agreement is incorporated herein by reference. This Notice,
the
Option Agreement and the Plan constitute the entire agreement of
the
parties and supersede in their entirety all prior undertakings and
agreements of the Company and Optionee with respect to the subject
matter
hereof. In the event of a conflict or discrepancy between the terms
of
this Agreement and the Peregrine Pharmaceuticals, Inc. 2005 Stock
Incentive Plan (the “Plan”), the terms of the Plan shall
control.
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8.
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Representatives
of Optionee.
Optionee acknowledges that Optionee has received, read and understood
the
Option Agreement and this Notice and agrees to abide by and be bound
by
the terms and conditions of the Option Agreement and this
Notice.
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| Submitted by: |
Accepted
by:
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| OPTIONEE: |
PEREGRINE
PHARMACEUTICALS, INC.
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| By:__________________________________ |
By:__________________________________
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Name:________________________________
Address:______________________________
_____________________________________
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