PEREGRINE PHARMACEUTICALS, INC. PERFORMANCE SHARE AWARD AGREEMENT/ STOCK BONUS PLAN
EXHIBIT
10.106
PEREGRINE
PHARMACEUTICALS, INC.
STOCK
BONUS PLAN
Peregrine
Pharmaceuticals, Inc., a Delaware corporation (“Peregrine” or the “Company”),
hereby awards to [NAME]
(the
“Grantee”), a participant in the Peregrine Stock Bonus Plan (the “Bonus Plan”),
as it may be amended, a Performance Share Award (the “Award”) for the number of
shares of Common Stock of the Company (“Stock”) as set forth in Section 1 and
subject to adjustments as provided in Sections 4 and Section 5 below. The Award
is made effective as of the 13th day of February, 2006. The Award is under
the
Company’s 2005 Stock Incentive Plan (“Incentive Plan”), and any shares of Stock
earned and to be issued pursuant hereto shall be issued from and in accordance
with the Incentive Plan.
1. Award.
Grantee
is hereby granted a Performance Share Award (the “Award”), which Award
represents the right to earn and receive up to [SHARES]
shares
of
Stock, subject to adjustment as provided in Sections 4 and 5 and the terms
and
conditions set forth in this Agreement.
2. Performance
Goals.
The
Company will issue shares of Stock to Grantee under this Agreement upon the
Company’s attainment of certain predetermined milestones (each a “Milestone”) as
set forth on an exhibit to the Stock Bonus Plan Summary, a copy of which is
attached hereto as Exhibit
A.
The
specific date that the Grantee will be deemed to have earned the shares of
Stock
with respect to a Milestone is described in the Stock Bonus
Summary.
3. Form
and Timing of Delivery of Certificate.
Any
Stock that Grantee shall have earned and become entitled to receive upon the
attainment of any such Milestone shall be issued in accordance with the schedule
on, and in the manner described in, the Stock Bonus Summary.
4. Termination
of Employment.
Upon
the
termination of the Grantee’s employment with the Company for any reason, Grantee
shall be entitled to receive only those shares of Stock earned with respect
to
Milestones attained prior to the date of such termination but not yet issued
in
accordance with Exhibit
A.
5. Adjustments.
Neither
the existence of the Bonus Plan nor this Award shall affect, in any way, the
right or power of the Company to make or authorize: any or all adjustments,
recapitalizations, reorganizations, or other changes in the Company’s capital
structure or its business; or any merger or consolidation of the Company; or
the
dissolution or liquidation of the Company; or any sale or transfer of all or
any
part of its assets or business; or any corporate act or proceeding, whether
of a
similar character or otherwise; all of which, and the resulting adjustments
in,
or impact on, the Award are more fully defined in the Incentive
Plan.
6. Withholding
and Deductions.
(a) Grantee
is ultimately liable and responsible for all taxes owed by the Grantee in
connection with the Award, regardless of any action the Company or any
subsidiary takes with respect to any tax withholding obligations that arise
in
connection with the Award. Neither the Company nor any subsidiary makes any
representation or undertaking regarding the treatment of any tax withholding
in
connection with the grant of the Award or the subsequent issuance or sale of
Stock subject to the Award. The Company and its subsidiaries do not commit
and
are under no obligation to structure the Award to reduce or eliminate Grantee’s
tax liability.
(b) Prior
to
any event in connection with the Award (e.g., issuance) that the Company
determines may result in any tax withholding obligation, whether United States
federal, state, local or non-U.S., including any employment tax obligation
(the
“Tax Withholding Obligation”), Grantee must arrange for the satisfaction of the
minimum amount of such Tax Withholding Obligation in a manner acceptable to
the
Company. Unless Grantee determines to satisfy the Tax Withholding Obligation
by
some other means in accordance with subsection (c) below, Grantee’s acceptance
of this Award constitutes the Grantee’s instruction and authorization to the
Company and any brokerage firm determined acceptable to the Company for such
purpose to sell on the Grantee’s behalf a whole number of shares of Stock from
those shares issuable to the Grantee as the Company determines to be appropriate
to generate cash proceeds sufficient to satisfy the minimum applicable Tax
Withholding Obligation. Such shares of Stock will be sold on the day such Tax
Withholding Obligation arises (e.g., an issuance date) or as soon thereafter
as
practicable. Grantee will be responsible for all broker’s fees and other costs
of sale, and Grantee agrees to indemnify and hold the Company harmless from
any
losses, costs, damages, or expenses relating to any such sale. To the extent
the
proceeds of such sale exceed Grantee’s minimum Tax Withholding Obligation, the
Company agrees to pay such excess in cash to Grantee. Grantee acknowledges
that
the Company or its designee is under no obligation to arrange for such sale
at
any particular price, and that the proceeds of any such sale may not be
sufficient to satisfy Grantee’s minimum Tax Withholding Obligation. Accordingly,
Grantee agrees to pay to Company or any subsidiary as soon as practicable,
including through additional payroll withholding, any amount of the Tax
Withholding Obligation that is not satisfied by the sale of Shares described
above.
(c) At
any
time no later than the date immediately prior to the date the Company issues
shares of Stock, Grantee may elect to satisfy the Grantee’s Tax Withholding
Obligation with respect to such shares of Stock by delivering to the Company
an
amount that the Company determines is sufficient to satisfy the Tax Withholding
Obligation by (x) wire transfer to such account as the Company may direct,
(y)
delivery of a certified check payable to the Company, or (z) such other means
as
specified from time to time by the Company.
7. Compliance
with Exchange Act.
If the
Grantee is subject to Section 16 of the Securities Exchange Act of 1934, as
amended, the shares of Stock granted pursuant to this Award is intended to
comply with all applicable conditions of Rule 16b-3 or its successors under
the
Exchange Act.
2
8. Non-Assignability.
The
Award and Grantee’s rights under this Agreement shall not be transferable other
than by will or by the laws of descent and distribution. The Performance Share
Award is otherwise non-assignable. The terms hereof shall be binding on the
executors, administrators, heirs and successors of the Grantee.
9. Voting
Rights.
The
Grantee will have no voting rights with respect to shares of Stock subject
to
the Performance Share Award not earned and issued to Grantee.
10. Tax
Issues.
Pursuant to Section 83 of the Internal Revenue Code of 1986 the value of
the shares of Stock received by Grantee will be taxed as ordinary income as
of
the date of receipt by the Grantee.
11. Employment
Agreement.
Notwithstanding anything to the contrary contained in this Agreement, (a)
neither the Bonus Plan, Incentive Plan nor this Agreement is intended to create
an express or implied contract of employment for a specified term between the
Grantee and the Company and (b) unless otherwise expressed or provided, in
writing, by an authorized officer, the employment relationship between the
Grantee and the Company shall be defined as “employment at will” wherein either
party, without prior notice, may terminate the relationship with or without
cause.
12. Regulatory
Approvals and Listing.
The
Company shall not be required to issue any certificate for shares of Stock
upon
the attainment of any Milestone as set forth in this Agreement prior to
satisfying any regulatory approval, registration, qualification or other
requirements of the Securities and Exchange Commission, the Internal Revenue
Service or any other governmental agency which the Committee, in its sole
discretion, shall determine to be necessary or advisable.
13. Administration.
This
Agreement shall at all times be subject to the terms and conditions of the
Bonus
Plan and the Incentive Plan, and each Plan shall in all respects be administered
by the Compensation Committee in accordance with the terms of and as provided
in
the Incentive Plan. The Compensation Committee shall have the sole and complete
discretion with respect to the interpretation of this Agreement and the Bonus
Plan, and all matters reserved to it by the Plan. The decisions of the majority
of the Compensation Committee with respect thereto and to this Agreement shall
be final and binding upon Grantee and the Company. In the event of any conflict
between the terms and conditions of this Agreement and the Incentive Plan,
the
provisions of the Incentive Plan shall control.
14. Waiver
and Modification.
The
provisions of this Agreement may not be waived or modified unless such waiver
or
modification is in writing signed by the Company.
15. Validity
and Construction.
The
validity and construction of this Award shall be governed by the laws of the
State of California.
TO
THE EXTENT THIS AGREEMENT IS SILENT ON
AN ISSUE OR THERE IS A CONFLICT BETWEEN THE INCENTIVE PLAN AND THIS AGREEMENT,
THE PLAN PROVISIONS SHALL CONTROL.
3
IN
WITNESS WHEREOF, the Company has caused this Performance Share Award Agreement
to be executed, effective as of February 13th,
2006.
PEREGRINE
PHARMACEUTICALS, INC.
By
________________________________
Xxxx
Xxxxx, Chief Financial Officer
________________________________
Grantee
4
Exhibit
A
PEREGRINE
PHARMACEUTICALS, INC.
STOCK
BONUS PLAN SUMMARY
1. |
Approval
Date. This Stock Bonus Plan (the “Plan”) has been approved by
the Company’s Compensation Committee of the Board on February 13 ,
2006.
|
2.
|
Max.
No. of Shares.
Up
to 1,737,166
shares of Peregrine’s common stock may be earned by all Grantees upon the
attainment of milestones set forth in the below Milestone
Table.
|
3.
|
Plan.
The shares shall be reserved for issuance under the Company’s 2005 Stock
Incentive Plan.
|
4.
|
Date
of Stock Issuance For Milestones Achieved.
|
Milestone
Timeframe
|
Shares
Issuance Period
|
|
For
all milestones achieved and bonuses “earned” before March 31,
2006
|
During
April 2006
|
|
For
all milestones achieved and bonuses “earned” between April 1, 2006
and
June 30, 2006
|
During
July 2006
|
|
For
all milestones achieved and bonuses “earned” between July 1, 2006
and
September 30, 2006
|
During
October 2006
|
|
For
all milestones achieved and bonuses “earned” between October 1, 2006
and
December 31, 2006
|
During
January 2007
|
|
For
all milestones achieved and bonuses “earned” between January 1, 2007
and
April 1, 2007
|
During
April 2007
|
For
purposes of financial statement purposes, a bonus will be deemed
“earned”,
and the recipient’s right to receive the bonus shall accrue, as
follows:
|
If
the milestone is achieved by the Bonus Target Date, and the milestone
triggers a press release, then the bonus shall be earned on the date
the
press release is publicly
disseminated.
|
If
the milestone is achieved by the Bonus Target Date, and the milestone
has
not triggered the dissemination of a press release within ten (10)
trading
days following the date the milestone is achieved, then the bonus
shall be
earned on the date that is the tenth trading day following the date
the
milestone is achieved.
|
5.
|
Black-Out
Periods.
In
the event the planned date of issuance of shares occurs on a black-out
day
in which no shares could be sold in the open market to cover the
estimated
income taxes, the Company will then postpone the issuance of shares
until
3 trading days following the date of the material non-public information
is disclosed in a press release or Form 8-K. The Company shall not
be
liable for any decrease the trading price of its Stock during a black-out
period that postpones the issuance of any
shares.
|
5
6.
|
Form
4 Reporting.
Xxxxx Xxxx, Xxxx Xxxxx and Xxxxx Xxxx will report the receipt of
the
shares within two (2) days of the date that they are earned pursuant
to
paragraph 4 above.
|
7.
|
Plan
Provisions to Prevail.
In
the event that there is any inconsistency between the provisions
of this
Stock Bonus Plan and of the 2005 Stock Incentive Plan, the provisions
of
the 2005 Stock Incentive Plan shall
govern.
|
8.
|
Tax
Withholding Obligation and Tax Advice Allowance.
Because the receipt of shares of Stock is taxable to the recipient
as
ordinary income (i.e., compensation) on the date of receipt, the
Company
has an obligation to withhold all payroll taxes due with respect
to the
receipt of the shares of Stock and to remit such taxes at the end
of the
applicable pay period. In order to facilitate the collection of
withholding taxes, each participant must have established a brokerage
account with RBC Xxxx Xxxxxxxx (“RBC”). Further, by your participation in
the Plan (and by your execution of the Performance Share Award Agreement
(the “Award Agreement”), you agree and consent to the Company’s standing
instruction to RBC to immediately sell, following receipt thereof,
enough
shares of Stock to cover the required statutory bonus withholdings
which
are at the following rates:
|
a.
|
Federal
- 25%
|
b.
|
California
- 9.3%
|
c.
|
Social
Security (FICA) - 6.2%
|
d.
|
Medicare
- 1.45%
|
The
above
equate to a total withholding rate of 41.95%. Please refer to the Award
Agreement for further discussion of the tax withholding process.
Each
plan
participant shall receive an allowance of up to $500 to determine federal and
state tax withholding obligations and estimated tax payments to be made from
the
issuance of common stock. Participants shall be reimbursed upon the submission
of an expense report and related invoice.
9.
|
Fair
Market Value of Income.
Participants shall be taxed at the fair market value of the stock
on the
date the shares are physically received by the employee or consultant.
Fair market value shall be determined to be the closing stock price
of the
Company’s common stock on the date of receipt by RBC.
|
6
Milestone
Table
[**]
**
Information omitted pursuant to a request of confidentiality filed separately
with the Securities and Exchange Commission.