Exhbit 10.3
 
STOCK OPTION AGREEMENT
 
STOCK OPTION AGREEMENT made as of the date day of month, year (yyyy).
 
BETWEEN:
ONCOTHYREON INC., a corporation,
incorporated under the laws of the State of Delaware
 
(hereinafter called the "Company")
 
                        OF THE FIRST PART
 
- and -
 
First & Last Name, an employee / a director
of the Company or one of its Subsidiaries or
an entity controlled by the Company
 
(hereinafter called the "Optionee")
 
                        OF THE SECOND PART
 
WHEREAS the Company has established a Share Option Plan (such Share Option Plan,
as may be supplemented or amended from time to time, is hereinafter called the
"Plan") for directors and full time employees of the Company or its subsidiaries
(meaning a “subsidiary corporation,” whether now or hereafter existing, as
defined in Section 424(f) of the Internal Revenue Code, as amended) and service
providers of the Company or any entity controlled by the Company;
 
AND WHEREAS the Optionee is eligible to participate in the Plan and the granting
of an option to the Optionee pursuant to the Plan on the terms hereinafter set
forth has been duly authorized;
 
NOW THEREFORE THIS AGREEMENT WITNESSETH that it is agreed by and between the
parties hereto as follows:
 
 
1.
In this Agreement the term "Share" shall mean one or more common shares in the
capital of the Company as constituted at the date of this Agreement and the term
"Triggering Event" shall have the meaning ascribed thereto in Exhibit A hereto.

 
 
2.
The Company hereby grants to the Optionee, subject to the terms and conditions
hereinafter set out, an irrevocable option to purchase # of shares (in
words) Shares of the Company (hereinafter called the "Optioned Shares") at the
exercise price of option price $ ##.### (in words) per Share (hereinafter called
the "Purchase Price").

 
 
3.
The Optionee shall, subject to the terms and conditions hereinafter set out,
have the right to exercise the option hereby granted with respect to all or any
part of the Optioned Shares at any time or from time to time on and after the
first (1st) anniversary of the date of grant of such option but prior to the
close of business on the eighth (8th) anniversary of the date of grant of such
option (hereinafter called the “Expiry Date”); provided that the Optionee shall
not be entitled to purchase hereunder more than twenty-five (25%) per cent of
the Optioned Shares in the aggregate before the second (2nd) anniversary of the
date of grant of such option, more than fifty (50%) per cent of the Optioned
Shares in the aggregate before the third (3rd) anniversary of the date of grant
of such option, more than seventy-five (75%) per cent of the Optioned Shares in
the aggregate before the fourth (4th) anniversary of the date of grant of such
option.

 
 
 
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For the avoidance of doubt, subject to the terms and conditions set forth
herein, twenty-five (25%) per cent of the Optioned Shares shall vest and become
exercisable on each annual anniversary of the date of grant of such option, such
that the Optioned Shares shall be fully vested and exercisable on the fourth
(4th) anniversary of the date of grant of such option.
 
Notwithstanding the foregoing if a Triggering Event shall occur subsequent to
the most recent date on which the shareholders of the Company approve the Plan,
the Optionee shall have the right to immediately exercise the option hereby
granted as to all of the Optioned Shares including, without limitation, those
Optioned Shares which cannot be exercised immediately prior to the occurrence of
the Triggering Event, provided the Optionee at the time of the occurrence of the
Triggering Event is an Employee, Director or Service Provider (as defined in the
Plan).  Further, notwithstanding that paragraph 4 hereof, may provide for a
shorter period, the Optionee shall have a minimum of ninety (90) days from the
date of the occurrence of the Triggering Event to exercise the option hereby
granted, provided the Optionee at the time of the occurrence of the Triggering
Event is an Employee, Director or Service Provider and provided further that the
Expiry Date does not occur prior to the expiration of such ninety (90) day
period in which case the minimum period shall be from the date of the occurrence
of the Triggering Event to the Expiry Date.
 
At the close of business on the Expiry Date the option hereby granted shall
forthwith expire and terminate and be of no further force or effect whatsoever
as to such of the Optioned Shares in respect of which such option has not then
been exercised.
 
 
4.
In the event of the termination of the Optionee's employment with the Company or
any Subsidiary of the Company, or the Optionee ceasing to be a Service Provider,
prior to the close of business on the Expiry Date for any reason other than: (i)
death; or (ii) termination of the Optionee's employment by the Company or its
Subsidiary, as the case may be, or the Optionee's termination as a Service
Provider, in either case without cause (as determined by the Company in its sole
discretion), the option hereby granted to the Optionee in respect of his
employment or as a Service Provider shall forthwith cease and terminate and be
of no further force or effect whatsoever as to such of the Optioned Shares in
respect of which such option has not been previously exercised.

 
Other than with respect to the President and each of the Vice-Presidents of the
Company, in the event of the termination of the Optionee’s employment by the
Company or any of its Subsidiaries, as the case may be, or the Optionee's
termination as a Service Provider, in either case without cause (as determined
by the Company in its sole discretion), any option hereby granted in respect of
his employment or as a result of his being a Service Provider will continue to
vest and may be exercised by the Optionee in accordance with the provisions of
paragraph 3 hereof at any time up to and including, but not after, the date
which is 180 days after the date of the termination of his employment or his
ceasing to be a Service Provider, as the case may be, or prior to the close of
business on the Expiry Date, whichever is the earlier.
 
With respect to the President and each of the Vice-Presidents of the Company, in
the event of the termination of such Optionee’s employment by the Company or any
of its Subsidiaries, as the case may be, or such Optionee's termination as a
Service Provider, in either case without cause, or the Optionee ceasing to be a
Service Provider, any option hereby granted in respect of his employment or as a
result of his being a Service Provider will continue to vest and may be
exercised by the Optionee in accordance with the provisions of paragraph 3
hereof at any time up to and including, but not after, the date which is the
second anniversary of the date of the termination of his employment or his
ceasing to be a Service Provider, as the case may be, or prior to the close of
business on the Expiry Date, whichever is the earlier.
 
 
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In the event of the Optionee ceasing to be a Director, any option hereby granted
as a result of his being a Director will continue to vest and may be exercised
by the Optionee in accordance with the provisions of paragraph 3 hereof at any
time up to and including, but not after, the date which is 180 days after the
date of his ceasing to be a Director or prior to the close of business on the
Expiry Date, whichever is the earlier.
 
 
5.
In the event of the death of the Optionee while in the employment of the Company
or any Subsidiary or while a Director or Service Provider, as the case may be,
the option hereby granted may be exercised by the legal representative of the
Optionee in the same manner and to the same extent as the Optionee, if living,
could have exercised it under the provisions of paragraph 3 hereof at any time
up to and including, but not after, the date which is 180 days after the date of
the death of the Optionee or prior to the close of business on the Expiry Date,
whichever is the earlier.

 
 
6.
Notwithstanding paragraphs 4 and 5 hereof: (i) if an Optionee who was granted an
option in one capacity (e.g., as an employee of the Company) continues on
immediately thereafter with the Company or any of its Subsidiaries in another
capacity (e.g., as a Service Provider or an employee of a Subsidiary of the
Company), then the provisions of paragraph 4 hereof shall not apply to terminate
such option solely as a result of such change; and (ii) the board of directors
of the Company shall have the right by resolution to waive termination of the
option hereby granted where same would otherwise cease and terminate and to fix
the time for vesting of the option hereby granted and within which such Optionee
may exercise the option hereby granted, but the time permitted for vesting and
exercise in said resolution shall not extend beyond the Expiry Date.

 
 
7.
Subject to the foregoing, the option hereby granted shall be exercisable by the
Optionee or his legal representative giving written notice to the Company at its
principal office in the City of Seattle either by mailing the same addressed to
the Company at such office or by delivering such notice to the Corporate
Controller of the Company (not being himself the Optionee) and by the Optionee
making payment for the Optioned Shares as hereinafter provided.

 
Such notice shall specify the number of Optioned Shares in respect of which the
option hereby granted is being exercised and either shall be accompanied by
payment to the Company in the City of Seattle of the full purchase price for the
number of Optioned Shares so specified, or shall specify that payment of the
full purchase price for the number of Optioned Shares so specified shall be made
to the transfer agent and registrar of the Shares in exchange for a certificate
or certificates representing the number of the Optioned Shares so specified.
Such notice, if mailed, shall be deemed to have been given on the day upon which
such notice is actually received by the Company and, if delivered as aforesaid,
shall be deemed to have been given on the date of delivery.
 
Upon receipt of such notice, the Company shall forthwith instruct the transfer
agent and registrar of the Shares to deliver to the Optionee or his legal
personal representative, as the case may be (or as otherwise directed in the
notice exercising the option) within twenty (20) days thereafter a certificate
or certificates in the name of the Optionee or his legal personal representative
as the case may be for the number of Optioned Shares in respect of which the
option is being exercised.  In the event that the Optionee has specified that
payment of the Purchase Price for the number of Optioned Shares so specified is
to be made to the transfer agent and registrar of the Shares, in which event the
transfer agent and registrar of the Shares in exchange for a certificate or
certificates representing such number of Optioned Shares, the Company shall so
advise the transfer agent and registrar of the Shares, in which event the
transfer agent and registrar of the Shares shall deliver the certificate or
certificates only against receipt by it of payment to the Company in the City of
Seattle of the full purchase price for the number of Optioned Shares in respect
of which the option is being exercised.
 
 
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The option shall be deemed to have been exercised with respect to the number of
Shares specified in such notice on the date that payment of the Purchase Price
for such number of Optioned Shares is received by the Company or by the transfer
agent and registrar of the Shares on behalf of the Company, as the case may be.
 
 
8.
Nothing herein contained or done pursuant hereto shall obligate the Optionee to
purchase and/or pay for or obligate the Company to issue any Optioned Shares
except those in respect of which the Optionee shall have exercised this option
in the manner hereinbefore provided.

 
 
9.
In the event that the Shares of the Company are changed, consolidated,
converted, subdivided or reclassified or if any dividend is payable in Shares of
the Company or other action of a similar nature affecting the number of Shares
of the Company is taken, then in such event the number of Shares in respect of
which this option is granted and the number of Shares issuable upon the exercise
of this option shall be correspondingly adjusted without any change in the total
price applicable to the Optioned Shares.

 
 
10.
The Optionee shall have no rights whatsoever as a shareholder of the Company in
respect of any of the Optioned Shares (including any right to receive dividends
or other distributions in respect thereof) except in respect of Optioned Shares
which shall have been taken up and paid for in full pursuant hereto.

 
 
11.
Time shall be of the essence in this Option Agreement.

 
 
12.
(a)
Notwithstanding anything hereinbefore contained to the contrary, the Optionee
shall not be entitled to exercise any option hereby granted with respect to the
Optioned Shares unless and until the Plan has been approved by the shareholders
of the Company at a meeting of shareholders of the Company duly convened for
that purpose.

 
 
(b)
Notwithstanding any contrary provision of this Option Agreement, no certificate
representing the Shares will be issued to the Optionee, unless and until
satisfactory arrangements will have been made by the Optionee with respect to
the payment of income, employment and other taxes which the Company determines
must be withheld with respect to such Shares.  To the extent determined
appropriate by the Company in its discretion, it will have the right (but not
the obligation) to satisfy any tax withholding obligations by reducing the
number of Shares otherwise deliverable to the Optionee.  If the Optionee fails
to make satisfactory arrangements for the payment of any required tax
withholding obligations hereunder at the time of the Option exercise, the
Optionee acknowledges and agrees that the Company may refuse to honor the
exercise and refuse to deliver Shares if such withholding amounts are not
delivered at the time of exercise.

 
 
 
 
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(c)
It is understood and acknowledged that the Company has offered the Optionee no
tax or other advice in connection with this option and assumes no responsibility
therefor.  It is the responsibility of the Optionee to obtain his own
independent tax and other advice with respect to this option.

 
 
13.
This Option Agreement shall enure to the benefit of and shall be binding upon
the Company and its successors and shall also enure to the benefit of and be
binding upon the Optionee and, as provided in paragraph 5 hereof, his legal
personal representative.  This Option Agreement and the option granted hereby
shall not be assignable by the Company or by the Optionee or his legal personal
representative.  Subject to prior approval of the stock exchanges on which the
Shares are listed and any other relevant regulatory authority, the terms and
conditions of this Option Agreement may be amended, modified or altered by the
Company with the consent of the Optionee provided that such amendment,
modification or alteration is not contrary to the provisions of the Plan and
this Option Agreement.

 
IN WITNESS WHEREOF this Option Agreement has been executed by the parties
hereto.
 
ONCOTHYREON INC.
 

 
By:___________________________________________________________________                                                                                
Robert L. Kirkman, MD
President & CEO

OPTIONEE

___________________________________________
Signature

___________________________________________
Printed Name

___________________________________________

___________________________________________
Residence Address

 
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EXHIBIT A
 
 
 
(a)
"Change in Control" shall be deemed to have occurred if, on or after the date
hereof (i) the board of directors of the Company passes a resolution to the
effect that, for purposes of the Share Option Plan of the Company and this
agreement, a Change in Control has occurred or (ii) any person or any group of
two or more persons acting jointly or in concert becomes the beneficial owner,
directly or indirectly, or acquires the right to control or direct, twenty-five
(25%) per cent or more of the outstanding voting securities of the Company or
any successor to the Company in any manner, including without limitation as a
result of a takeover bid or an amalgamation of the Company with any other
corporation or any other business combination or reorganization, and for
purposes hereof "voting security" means any security other than a debt security
carrying a voting right either under all circumstances or under some
circumstances that have occurred and are continuing;

 
 
(b)
"Offer" means an offer to purchase, a solicitation of an offer to sell or an
acceptance of an offer to sell Shares made by an Offeror to all or substantially
all the holders of Shares whose last address on the records of the Company is in
Canada other than the Offeror or any associate of the Offeror or any person
acting jointly or in concert with the Offeror in relation to the Offer and shall
include any amended, supplemented or extended Offer and any Offer made through
the facilities of a stock exchange on which the Shares are listed;

 
 
(c)
"Offeror" means any person, other than an agent, who makes an Offer, including
the Company, and shall include any persons who make an Offer or Offers acting
jointly or in concert;

 
 
(d)
"Triggering Event" means a Change in Control having occurred or an Offer having
been made.

 
 
 
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