EXHIBIT 10.3
 
 
PALATIN TECHNOLOGIES, INC.
RESTRICTED SHARE UNIT AGREEMENT
(Non-Employee Director)
 
Notice of Restricted Share Unit Award
 
Palatin Technologies, Inc., a Delaware corporation (the “Company”), grants to
the Grantee named below, in accordance with the terms of the Palatin
Technologies, Inc. 2011 Stock Incentive Plan, as amended and restated (the
“Plan”) and this Restricted Share Unit Agreement (the “Agreement”), the
following number of Restricted Share Units, on the Date of Grant set forth
below:
 

  Name of Grantee: [ ]         Number of Restricted Share Units: [ ]        
Date of Grant: [ ]

 
 
Terms of Agreement
 
1. Grant of Restricted Share Units. Subject to and upon the terms, conditions,
and restrictions set forth in this Agreement and in the Plan, the Company hereby
grants to the Grantee, as of the Date of Grant set forth above, the total number
of share units (the “Restricted Share Units”) set forth above.  Each Restricted
Share Unit shall represent the contingent right to receive one Share and shall
at all times be equal in value to one Share. The Restricted Share Units shall be
credited in a book entry account established for the Grantee until payment in
accordance with Section 4 hereof.
 
2. Vesting of Restricted Share Units.
 
(a) The Restricted Share Units shall vest to the extent of 50% of the Restricted
Share Units on each of the first and second anniversaries of the Date of Grant
(each such date a “Vesting Date”) (subject to such rounding conventions as may
be implemented by the Company from time to time), provided that the Grantee
shall have continued to serve as a Director through the applicable Vesting Date.
 
(b) Notwithstanding Section 2(a), the Restricted Share Units that have not yet
vested under Section 2(a) shall immediately vest if, prior to the applicable
Vesting Date: (i) the Grantee dies while serving as a Director; (ii) the
Grantee’s service as a Director is terminated as a result of the failure of the
Board to nominate the Grantee for re-election to the Board for any reason other
than for “Cause” (as defined below); or (iii) a “Change in Control Event” occurs
while the Grantee is serving as a Director.  For purposes of this Agreement, a
“Change in Control Event” means a Change in Control that constitutes a “change
in the ownership,” a “change in the effective control” or a “change in the
ownership of a substantial portion of the assets” of the Company within the
meaning of Section 409A of the Code.
 
 
 

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(c) For purposes of this Agreement, “Cause” shall mean: (i) the Grantee’s
material breach of, or habitual neglect or failure to perform the material
aspects of his or her duties as a Director; (ii) the Grantee’s engaging in
conduct that is materially detrimental to the interests of the Company such that
the Company sustains a material loss or injury as a result thereof; or (iii) the
conviction of the Grantee of, or the entry of a pleading of guilty or nolo
contendere by the Grantee to, any crime involving moral turpitude or any felony.
 
3. Forfeiture of Restricted Share Units.
 
(a) The Restricted Share Units that have not yet vested pursuant to Section 2
shall be forfeited automatically without further action or notice if the Grantee
ceases to serve as a Director prior to a Vesting Date other than as provided in
Section 2(b).
 
(b) All unpaid Restricted Share Units, whether or not vested, shall be forfeited
automatically without further action or notice if the Grantee’s service as a
Director is terminated as a result of the failure of the Board to nominate the
Grantee for re-election to the Board for any reason other than for Cause.
Further, the Restricted Share Units and any amount paid hereunder shall be
subject to the forfeiture and repayment provisions of Section 20 of the Plan.
 
4. Payment.
 
(a) Except as may be otherwise provided in this Section, the Company shall
deliver to the Grantee (or the Grantee’s estate in the event of death) the
Shares underlying the vested Restricted Share Units within sixty (60) days
following the earlier of:
 
(i)           The date of Grantee’s “separation from service” (within the
meaning of Section 409A of the Code) for any reason other than as a result of
the failure of the Board to nominate the Grantee for re-election to the Board
for any reason other than for Cause; or
 
(ii)           The occurrence of a Change in Control Event.
 
(b) Notwithstanding the foregoing, if the Restricted Share Units become payable
as a result of Section 4(a)(i) and the Grantee is a “specified employee”, within
the meaning of Section 409A of the Code (as determined pursuant to the Company’s
policy for identifying specified employees) on the date of the Grantee’s
separation from service, then to the extent required to comply with Section 409A
of the Code, the Shares underlying the vested Restricted Share Units shall
instead be delivered to the Grantee within sixty (60) days after the first
business day that is more than six months after the date of his or her
separation from service (or, if the Grantee dies during such six-month period,
within sixty (60) days after the Grantee’s death).
 
(c) The Company’s obligations with respect to the Restricted Share Units shall
be satisfied in full upon the delivery of the Shares underlying the vested
Restricted Share Units.
 
5. Transferability.  The Restricted Share Units may not be transferred,
assigned, pledged or hypothecated in any manner, or be subject to execution,
attachment or similar process, by operation of law or otherwise, unless
otherwise provided under the Plan. Any purported transfer or encumbrance in
violation of the provisions of this Section 5 shall be void, and the other party
to any such purported transaction shall not obtain any rights to or interest in
such Restricted Share Units.
 
 
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6. Dividend, Voting and Other Rights.  The Grantee shall not possess any
incidents of ownership (including, without limitation, dividend and voting
rights) in the Shares underlying the Restricted Share Units until such Shares
have been delivered to the Grantee in accordance with Section 4 hereof. The
obligations of the Company under this Agreement will be merely that of an
unfunded and unsecured promise of the Company to deliver Shares in the future,
and the rights of the Grantee will be no greater than that of an unsecured
general creditor. No assets of the Company will be held or set aside as security
for the obligations of the Company under this Agreement.
 
7. Taxes.  The Grantee is responsible for any federal, state, local or other
taxes with respect to the Restricted Share Units.  The Company does not
guarantee any particular tax treatment or results in connection with the grant
or vesting of the Restricted Share Units or the delivery of Shares.
 
8. Adjustments.  The number and kind of shares of stock deliverable pursuant to
the Restricted Share Units are subject to adjustment as provided in Section 16
of the Plan.
 
9. Compliance with Law.  The Company shall make reasonable efforts to comply
with all applicable federal and state securities laws and listing requirements
with respect to the Restricted Share Units; provided that, notwithstanding any
other provision of this Agreement, and only to the extent permitted under
Section 409A of the Code, the Company shall not be obligated to deliver any
Shares pursuant to this Agreement if the delivery thereof would result in a
violation of any such law or listing requirement.
 
10. Amendments.  Subject to the terms of the Plan, the Committee may modify this
Agreement upon written notice to the Grantee. Any amendment to the Plan shall be
deemed to be an amendment to this Agreement to the extent that the amendment is
applicable hereto.  Notwithstanding the foregoing, no amendment of the Plan or
this Agreement shall adversely affect in a material way the rights of the
Grantee under this Agreement without the Grantee’s consent unless the Committee
determines, in good faith, that such amendment is required for the Agreement to
either be exempt from the application of, or comply with, the requirements of
Section 409A of the Code, or as otherwise may be provided in the Plan.
 
11. Severability.  In the event that one or more of the provisions of this
Agreement shall be invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from
the other provisions hereof, and the remaining provisions hereof shall continue
to be valid and fully enforceable.
 
12. Relation to Plan.  This Agreement is subject to the terms and conditions of
the Plan. This Agreement and the Plan contain the entire agreement and
understanding of the parties with respect to the subject matter contained in
this Agreement, and supersede all prior written or oral communications,
representations and negotiations in respect thereto. In the event of any
inconsistency between the provisions of this Agreement and the Plan, the Plan
shall govern.  Capitalized terms used herein without definition shall have the
meanings assigned to them in the Plan. The Committee acting pursuant to the
Plan, as constituted from time to time, shall, except as expressly provided
otherwise herein, have the right to determine any questions which arise in
connection with the grant of the Restricted Share Units.
 
 
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13. Successors and Assigns.  Without limiting Section 5, the provisions of this
Agreement shall inure to the benefit of, and be binding upon, the successors,
administrators, heirs, legal representatives and assigns of the Grantee, and the
successors and assigns of the Company.
 
14. Governing Law.  The interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Delaware, without giving
effect to the principles of conflict of laws thereof.
 
15. Use of Grantee’s Information.  Information about the Grantee and the
Grantee’s participation in the Plan may be collected, recorded and held, used
and disclosed for any purpose related to the administration of the Plan. The
Grantee understands that such processing of this information may need to be
carried out by the Company and by third party administrators whether such
persons are located within the Grantee’s country or elsewhere, including the
United States of America. The Grantee consents to the processing of information
relating to the Grantee and the Grantee’s participation in the Plan in any one
or more of the ways referred to above.
 
16. Electronic Delivery.  The Grantee hereby consents and agrees to electronic
delivery of any documents that the Company may elect to deliver (including, but
not limited to, prospectuses, prospectus supplements, grant or award
notifications and agreements, account statements, annual and quarterly reports,
and all other forms of communications) in connection with this and any other
award made or offered under the Plan. The Grantee understands that, unless
earlier revoked by the Grantee by giving written notice to the Secretary of the
Company, this consent shall be effective for the duration of the Agreement. The
Grantee also understands that he or she shall have the right at any time to
request that the Company deliver written copies of any and all materials
referred to above at no charge. The Grantee hereby consents to any and all
procedures the Company has established or may establish for an electronic
signature system for delivery and acceptance of any such documents that the
Company may elect to deliver, and agrees that his or her electronic signature is
the same as, and shall have the same force and effect as, his or her manual
signature. The Grantee consents and agrees that any such procedures and delivery
may be effected by a third party engaged by the Company to provide
administrative services related to the Plan.
 
17. Acknowledgement of Receipt of Prospectus Information.  By executing this
Agreement, the Grantee acknowledges receipt of a copy of the Plan, Plan Summary
and Prospectus, and the Company’s most recent Annual Report and Proxy Statement
(the “Prospectus Information”). The Grantee represents that he is familiar with
the terms and provisions of the Prospectus Information and hereby accepts the
award of Restricted Share Units on the terms and conditions set forth herein and
in the Plan.
 
 
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Date of
Grant.
 
PALATIN TECHNOLOGIES, INC.

By:                                                                
Name: ______________________________
Title: _______________________________

GRANTEE

____________________________________
Name: _______________________________

 
 
 
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