Exhibit 10.1
PDL
BIOPHARMA, INC.
STOCK
OPTION AGREEMENT
PDL
BioPharma, Inc. has granted to the Participant named in the
Notice of Grant of Stock Option (the “ Grant
Notice ” ) to which this Stock Option Agreement
(the “ Option Agreement ” ) is attached
an option (the “ Option ” ) to purchase
certain shares of Stock upon the terms and conditions set forth in
the Grant Notice and this Option Agreement. The Option has
been granted pursuant to and shall in all respects be subject to
the terms and conditions of the PDL BioPharma, Inc. 2005
Equity Incentive Plan (the “ Plan ” ), as
amended to the Date of Grant, the provisions of which are
incorporated herein by reference. By signing the Grant
Notice, the Participant: (a) acknowledges receipt of and
represents that the Participant has read and is familiar with the
Grant Notice, this Option Agreement, the Plan and a prospectus for the Plan in the form most
recently registered with the Securities and Exchange Commission
(the “ Plan Prospectus ” ) ,
(b) accepts the Option subject to all of the terms and
conditions of the Grant Notice, this Option Agreement and the Plan
and (c) agrees to accept as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions
arising under the Grant Notice, this Option Agreement or the
Plan.
1.
DEFINITIONS AND
CONSTRUCTION .
1.1
Definitions . Unless otherwise defined herein,
capitalized terms shall have the meanings assigned to such terms in
the Grant Notice or the Plan.
1.2
Construction . Captions and titles contained
herein are for convenience only and shall not affect the meaning or
interpretation of any provision of this Option Agreement.
Except when otherwise indicated by the context, the singular shall
include the plural and the plural shall include the singular.
Use of the term “or” is not intended to be exclusive,
unless the context clearly requires otherwise.
2.
TAX
STATUS OF OPTION .
This Option is
intended to be a Nonstatutory Stock Option and shall not be treated
as an Incentive Stock Option within the meaning of
Section 422(b) of the Code.
3.
ADMINISTRATION
.
All questions of
interpretation concerning this Option Agreement shall be determined
by the Committee. All determinations by the Committee shall
be final and binding upon all persons having an interest in the
Option. Any Officer shall have the authority to act on behalf
of the Company with respect to any matter, right, obligation, or
election which is the responsibility of or which is allocated to
the Company herein, provided the Officer has apparent
authority with respect to such matter, right, obligation, or
election.
4.
EXERCISE OF THE
OPTION .
4.1
Right to Exercise . Except as otherwise
provided herein, the Option shall be exercisable on and after the
Initial Vesting Date and prior to the termination of the Option (as
provided in Section 6) in an amount not to exceed the number
of Vested Shares less the number of shares previously acquired upon
exercise of the Option. In no event shall the Option be
exercisable for more shares than the Number of Option Shares, as
adjusted pursuant to Section 9.
4.2
Method of Exercise . Exercise of the Option
shall be by means of electronic or written notice (the “
Exercise Notice ” ) in a form authorized by the
Company. An electronic Exercise Notice must be digitally
signed or authenticated by the Participant in such manner as
required by the notice and transmitted to the Company or an
authorized representative of the Company (including a third-party
administrator designated by the Company). In the event that
the Participant is not authorized or is unable to provide an
electronic Exercise Notice, the Option shall be exercised by a
written Exercise Notice addressed to the Company, which shall be
signed by the Participant and delivered in person, by certified or
registered mail, return receipt requested, by confirmed facsimile
transmission, or by such other means as the Company may permit, to
the Company, or an authorized representative of the Company
(including a third-party administrator designated by the
Company). Each Exercise Notice, whether electronic or
written, must state the Participant’s election to exercise
the Option, the number of whole shares of Stock for which the
Option is being exercised and such other representations and
agreements as to the Participant’s investment intent with
respect to such shares as may be required pursuant to the
provisions of this Option Agreement. Further, each Exercise
Notice must be received by the Company prior to the termination of
the Option as set forth in Section 6 and must be accompanied
by full payment of the aggregate Exercise Price for the number of
shares of Stock being purchased. The Option shall be deemed
to be exercised upon receipt by the Company of such electronic or
written Exercise Notice and the aggregate Exercise
Price.
4.3
Payment of Exercise Price.
(a)
Forms of
Consideration Authorized . Except as otherwise provided
below, payment of the aggregate Exercise Price for the number of
shares of Stock for which the Option is being exercised shall be
made (i) in cash or by check or cash equivalent, (ii) if
permitted by the Company, by tender to the Company, or attestation
to the ownership, of whole shares of Stock owned by the Participant
having a Fair Market Value not less than the aggregate Exercise
Price, (iii) by means of a Cashless Exercise, as defined in
Section 4.3(b), or (iv) by any combination of the
foregoing.
(b)
Limitations
on Forms of Consideration.
(i)
Tender of Stock. Notwithstanding the foregoing, the
Option may not be exercised by tender to the Company, or
attestation to the ownership, of shares of Stock to the extent such
tender or attestation would constitute a violation of the
provisions of any law, regulation or agreement restricting the
redemption of the Company ’ s stock. If required by the Company, the
Option may not be exercised by tender to the Company, or
attestation to the ownership, of shares of Stock unless such shares
either have been owned by the Participant for more than six
(6) months or such other period, if any, required by the
Company (and not used for another option exercise by attestation
during such period) or were not acquired, directly or indirectly,
from the Company.
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(ii)
Cashless Exercise. A “ Cashless
Exercise ” means the delivery of a properly executed
notice together with irrevocable instructions to a broker in a form
acceptable to the Company providing for the assignment to the
Company of the proceeds of a sale or loan with respect to some or
all of the shares of Stock acquired upon the exercise of the Option
pursuant to a program or procedure approved by the Company
(including, without limitation, through an exercise complying with
the provisions of Regulation T as promulgated from time to
time by the Board of Governors of the Federal Reserve
System). The Company reserves, at any and all times, the
right, in the Company ’ s sole and absolute discretion, to establish,
decline to approve or terminate any such program or procedure,
including with respect to the Participant notwithstanding that such
program or procedures may be available to others.
4.4
Tax Withholding . At the time the Option is
exercised, in whole or in part, or at any time thereafter as
requested by the Company, the Participant hereby authorizes
withholding from payroll and any other amounts payable to the
Participant, and otherwise agrees to make adequate provision for
(including by means of a Cashless Exercise to the extent permitted
by the Company), any sums required to satisfy the federal, state,
local and foreign tax withholding obligations of the Participating
Company Group, if any, which arise in connection with the
Option. The Company shall have no obligation to deliver
shares of Stock until the tax withholding obligations of the
Participating Company Group have been satisfied by the
Participant.
4.5
Beneficial Ownership of Shares; Certificate Registration
. The Participant hereby authorizes the Company,
in its sole discretion, to deposit for the benefit of the
Participant with any broker with which the Participant has an
account relationship of which the Company has notice any or all
shares acquired by the Participant pursuant to the exercise of the
Option. Except as provided by the preceding sentence, a
certificate for the shares as to which the Option is exercised
shall be registered in the name of the Participant, or, if
applicable, in the names of the heirs of the Participant.
4.6
Restrictions on Grant of the Option and Issuance of Shares
. The grant of the Option and the issuance of
shares of Stock upon exercise of the Option shall be subject to
compliance with all applicable requirements of federal, state or
foreign law with respect to such securities. The Option may
not be exercised if the issuance of shares of Stock upon exercise
would constitute a violation of any applicable federal, state or
foreign securities laws or other law or regulations or the
requirements of any stock exchange or market system upon which the
Stock may then be listed. In addition, the Option may not be
exercised unless (i) a registration statement under the
Securities Act shall at the time of exercise of the Option be in
effect with respect to the shares issuable upon exercise of the
Option or (ii) in the opinion of legal counsel to the Company,
the shares issuable upon exercise of the Option may be issued in
accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. THE
PARTICIPANT IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED
UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY,
THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN
DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of
the Company to obtain from any regulatory body having jurisdiction
the authority, if any, deemed by the Company’s legal counsel
to be necessary to the lawful issuance and sale of any shares
subject to the Option shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which
such
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requisite
authority shall not have been obtained. As a condition to the
exercise of the Option, the Company may require the Participant to
satisfy any qualifications that may be necessary or appropriate, to
evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be
requested by the Company.
4.7
Fractional Shares . The Company shall not be
required to issue fractional shares upon the exercise of the
Option.
5.
NONTRANSFERABILITY
OF THE OPTION .
During the lifetime of the Participant, the
Option shall be exercisable only by the Participant or the
Participant’s guardian or legal representative. The
Option shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge,
encumbrance, or garnishment by creditors of the Participant or the
Participant’s beneficiary, except transfer by will or by the
laws of descent and distribution. Following the death of the
Participant, the Option, to the extent provided in Section 7,
may be exercised by the Participant ’s legal
representative or by any person empowered to do so under the
deceased Participant’s will or under the then applicable laws
of descent and distribution.
6.
TERMINATION OF
THE OPTION .
The
Option shall terminate and may no longer be exercised after the
first to occur of (a) the close of business on the Option
Expiration Date, (b) the close of business on the last date
for exercising the Option following termination of the
Participant ’s Service as described in Section 7,
or (c) a Change in Control to the extent provided in
Section 8.
7.
EFFECT OF
TERMINATION OF SERVICE .
7.1
Option Exercisability. The Option shall terminate
immediately upon the Participant’s termination of Service to
the extent that it is then unvested and shall be exercisable after
the Participant’s termination of Service to the extent it is
then vested only during the applicable time period as determined
below and thereafter shall terminate.
(a)
Disability . If the
Participant ’ s Service terminates because of the Disability
of the Participant, the Option, to the extent unexercised and
exercisable for Vested Shares on the date on which the
Participant ’ s Service terminated, may be exercised by the
Participant (or the Participant ’ s guardian or legal representative) at any time
prior to the expiration of twelve (12) months after the date on
which the Participant ’ s Service terminated, but in any event no later
than the Option Expiration Date.
(b)
Death .
If the Participant’s
Service terminates because of the death of the Participant, the
Option, to the
extent unexercised and exercisable for Vested Shares
on the date on which the
Participant’s Service terminated, may be exercised by the
Participant’s legal representative or other person who
acquired the right to exercise the Option by reason of the
Participant’s death at any time prior to the expiration of
twelve (12) months after the date on which the Participant’s
Service terminated, but in any event no later than the Option
Expiration Date. The Participant’s Service shall be
deemed to have terminated on account of death if the Participant
dies within three (3) months after the Participant’s
termination of Service.
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(c)
Termination After Change in
Control . If the Participant’s Service ceases
as a result of a Termination After Change in Control (as defined
below), then (i) the Option, to the extent unexercised and
exercisable for Vested Shares on the date on which the
Participant’s Service terminated, may be exercised by the
Participant (or the Participant’s guardian or legal
representative) at any time prior to the expiration of six
(6) months after the date on which the Participant’s
Service terminated, but in any event no later than the Option
Expiration Date.
(d)
Termination After Agreement to
Resign Employment . If the Participant’s
Service as an Employee ceases as a result of an Agreement to Resign
Employment (as defined below) and as of the effective date of the
termination of Participant’s S
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