Exhibit 10.3

 

IOVANCE BIOTHERAPEUTICS, INC.
2018 EQUITY INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

 

THIS NONQUALIFIED STOCK OPTION AWARD AGREEMENT (this “Agreement”), is entered
into as of [ ], 20[ ] (the “Date of Grant”), by and between Iovance
Biotherapeutics, Inc., a Delaware corporation (the “Company”), and [ ] (the
“Participant”). Capitalized terms used in this Agreement and not otherwise
defined herein have the meanings ascribed to such terms in the Iovance
Biotherapeutics, Inc. 2018 Equity Incentive Plan, as amended, restated or
otherwise modified from time to time in accordance with its terms (the “Plan”).

 

WHEREAS, the Compensation Committee of the board of directors (the “Committee”)
has determined that it is in the best interests of the Company and its
stockholders to grant the award provided for herein to the Participant on the
terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, for and in consideration of the premises and the covenants of
the parties contained in this Agreement, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto,
for themselves, their successors and assigns, hereby agree as follows:

 

1.       Grant of Option.

 

(a)       Grant. The Company hereby grants to the Participant an Option to
purchase [ ] shares of Common Stock (the “Option Shares”) on the terms and
subject to the conditions set forth in this Agreement and as otherwise provided
in the Plan. The Option is a Nonqualifed Stock Option. The Option shall vest in
accordance with Section 2. The Exercise Price shall be $[ ] per Option Share.

 

(b)       Incorporation by Reference. The provisions of the Plan are
incorporated herein by reference. Except as otherwise expressly set forth
herein, this Agreement shall be construed in accordance with the provisions of
the Plan and any interpretations, rules and regulations and additional terms
adopted by the Committee from time to time pursuant to the Plan. The Committee
shall have final authority to interpret and construe the Plan and this Agreement
and to make any and all determinations under them, and its decision shall be
binding and conclusive upon the Participant and the Participant’s beneficiary in
respect of any questions arising under the Plan or this Agreement. The
Participant acknowledges that the Participant has received a copy of the Plan
and has had an opportunity to review the Plan and agrees to be bound by all the
terms and provisions of the Plan.

 

2.       Vesting. Except as may otherwise be provided herein, the Option shall
vest and become exercisable as to [_______] of the Option Shares on the one-year
anniversary of Date of Grant, and the remaining Option Shares shall vest as to
[_______] of Option Shares at the end of each quarter over the next [____]
years, commencing with the first quarter following the first anniversary of the
Date of Grant] (each such date, a “Vesting Date”), subject to the Participant’s
continued employment with, appointment as a director of, or engagement to
provide services to, the Company or any of its Affiliates through the applicable
Vesting Date. Any fractional Option Share resulting from the application of the
vesting schedule shall be aggregated and the Option Share resulting from such
aggregation shall vest on the final Vesting Date.

 

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3.       Termination of Employment or Services.

 

(a)       Generally. Except as otherwise provided herein, if the Participant’s
employment with, membership on the board of directors, or engagement to provide
services to the Company or any of its Affiliates terminates for any reason, the
unvested portion of the Option shall be canceled immediately and the Participant
shall have no rights with respect to the Option Shares subject to such unvested
portion.

 

(b)       Death or Disability. Notwithstanding anything to the contrary in
Section 3, if the Participant’s employment with, membership on the board of
directors, or engagement to provide services to the Company or any of its
Affiliates terminates due to the Participant’s death or Disability, any unvested
portion of the Option shall become fully vested as of the date of such
termination, which shall be the final Vesting Date.

 

(c)       Termination Without Cause. Notwithstanding anything to the contrary in
Section 3, if the Participant’s employment with, membership on the board of
directors, or engagement to provide services to the Company or any of its
Affiliates is terminated by the Company without Cause on or within 12 months
after, the date of a Change in Control, any unvested portion of the Option shall
become fully vested as of the date of termination, which shall be the final
Vesting Date.

 

4.       Expiration.

 

(a)       In no event shall all or any portion of the Option be exercisable
after the tenth annual anniversary of the Date of Grant (such ten-year period,
the “Option Period”); provided, that if the Option Period would expire at a time
when trading in the shares of Common Stock is prohibited by the Company’s
securities trading policy (or Company-imposed “blackout period”), the Option
Period shall be automatically extended until the 30th day following the
expiration of such prohibition (but not to the extent that any such extension
would otherwise violate Section 409A of the Code).

 

(b)       If, prior to the end of the Option Period, the Participant’s
employment with, or engagement to provide services to, the Company and all
Affiliates is terminated without Cause or by the Participant for any reason,
then the Option shall expire on the earlier of the last day of the Option Period
and the date that is 90 days after the date of such termination; provided,
however, that if the Participant’s employment or engagement to provide services
to the Company and its Affiliates is terminated and the Participant is
subsequently rehired or reengaged by the Company or any Affiliate within 90 days
following such termination and prior to the expiration of the Option, the
Participant shall not be considered to have undergone a termination of
employment or service, as applicable. In the event of a termination described in
this subsection (b), the Option shall remain exercisable by the Participant
until its expiration only to the extent that the Option was exercisable at the
time of such termination.

 

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(c)       If (i) the Participant’s employment with or engagement to provide
services to, the Company is terminated prior to the end of the Option Period on
account of the Participant’s Disability, (ii) the Participant dies while still
in the employ or engagement of the Company or an Affiliate, (iii) the
Participant dies following a termination described in subsection (b) above but
prior to the expiration of an Option, or (iv) the Participant’s employment with,
or engagement to provide services to, the Company is terminated prior to the end
of the Option Period on account of his Retirement, the Option shall expire on
the earlier of the last day of the Option Period and the date that is one (1)
year after the date of death or termination on account of Disability of or
Retirement by the Participant, as applicable. In such event, the Option shall
remain exercisable by the Participant or Participant’s beneficiary, as
applicable, until its expiration only to the extent that the Option was
exercisable by the Participant at the time of such event.

 

(d)       [If, prior to the end of the Option Period, the Participant’s
directorship with the Company is terminated without Cause or by the Participant
for any reason, then the Option shall expire on the earlier of the last day of
the Option Period and the date that is two years after the date of such
termination.]

 

(e)       If the Participant ceases employment with or engagement to provide
services to the Company or any Affiliates or is removed as a director due to a
termination for Cause, the Option (whether vested or unvested) shall be
cancelled immediately and the Participant shall have no rights with respect to
the Option Shares.

 

5.       Method of Exercise and Form of Payment.

 

(a)       No Option Shares shall be delivered pursuant to any exercise of the
Option until the Participant has paid in full to the Company the Exercise Price
and an amount equal to any U.S. federal, state, local and non-U.S. income and
employment taxes required to be withheld. The Option may be exercised by
delivery of written or electronic notice of exercise to the Company or its
designee (including a third-party-administrator) in accordance with the terms
hereof. The Exercise Price and all applicable required withholding taxes shall
be payable (i) in cash, check or cash equivalent; or (ii) by such other method
as the Committee may permit, including without limitation: (A) shares of Common
Stock valued at the Fair Market Value at the time the Option is exercised
(including, pursuant to procedures approved by the Committee, by means of
attestation of ownership of a sufficient number of shares of Common Stock in
lieu of actual delivery of such shares to the Company), provided that such
shares of Common Stock are not subject to any pledge or other security interest;
(B) in other property having a Fair Market Value equal to the Exercise Price and
all applicable required withholding taxes; or (C) if there is a public market
for the shares of Common Stock at such time, by means of a broker-assisted
“cashless exercise” pursuant to which the Company is delivered a copy of
irrevocable instructions to a stockbroker to sell the shares of Common Stock
otherwise deliverable upon the exercise of the Option and to deliver promptly to
the Company an amount equal to the Exercise Price and all applicable required
withholding taxes. Any fractional shares of Common Stock resulting from the
application of this Section 5 shall be settled in cash.

 

6.       Rights as a Stockholder. The Participant shall not be deemed for any
purpose to be the owner of any shares of Common Stock subject to this Option
unless, until and to the extent that (i) this Option shall have been exercised
pursuant to its terms, (ii) the Company shall have issued and delivered to the
Participant the Option Shares and (iii) the Participant’s name shall have been
entered as a stockholder of record with respect to such Option Shares on the
books of the Company. The Company shall cause the actions described in clauses
(ii) and (iii) of the preceding sentence to occur promptly following settlement
as contemplated by this Agreement, subject to compliance with applicable laws.

 

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7.       Compliance with Legal Requirements.

 

(a)       Generally. The granting and exercising of the Option, and any other
obligations of the Company under this Agreement, shall be subject to all
applicable U.S. federal, state and local laws, rules and regulations, all
applicable non-U.S. laws, rules and regulations and to such approvals by any
regulatory or governmental agency as may be required. The Participant agrees to
take all steps that the Committee or the Company determines are reasonably
necessary to comply with all applicable provisions of U.S. federal and state
securities law and non-U.S. securities law in exercising the Participant’s
rights under this Agreement.

 

(b)       Tax Withholding. Any exercise of the Option shall be subject to the
Participant’s satisfying any applicable U.S. federal, state and local tax
withholding obligations and non-U.S. tax withholding obligations. The Company
shall have the right and is hereby authorized to withhold from any amounts
payable to the Participant in connection with the Option or otherwise the amount
of any required withholding taxes in respect of the Option, its exercise or any
payment or transfer of the Option or under the Plan and to take any such other
action as the Committee or the Company deem necessary to satisfy all obligations
for the payment of such withholding taxes (up to the maximum permissible
withholding amounts), including the right to use a broker-assisted “cashless
exercise” as described in Section 5(i)(C) hereof. The Participant may elect to
satisfy, and the Company may require the Participant to satisfy, in whole or in
part, the tax obligations by withholding shares of Common Stock that would
otherwise be received upon exercise of the Option with a Fair Market Value equal
to such withholding liability. For exercises of the Option occurring during a
blackout period under the Company’s insider trading policy, the Company shall
arrange for the sale of a number of shares of Common Stock to be delivered to
the Participant to satisfy the applicable withholding obligations. Such shares
of Common Stock shall be sold on behalf of the Participant through the Company’s
transfer agent on the facilities of any exchange on which the Common Stock is
listed at the time of such sale.

 

8.       Miscellaneous.

 

(a)       Transferability. The Option may not be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered (a “Transfer”) by the
Participant other than by will or by the laws of descent and distribution,
pursuant to a qualified domestic relations order or as otherwise permitted under
Section 14(b) of the Plan. Any attempted Transfer of the Option contrary to the
provisions hereof, and the levy of any execution, attachment or similar process
upon the Option, shall be null and void and without effect.

 

(b)       Waiver. Any right of the Company contained in this Agreement may be
waived in writing by the Committee. No waiver of any right hereunder by any
party shall operate as a waiver of any other right, or as a waiver of the same
right with respect to any subsequent occasion for its exercise, or as a waiver
of any right to damages. No waiver by any party of any breach of this Agreement
shall be held to constitute a waiver of any other breach or a waiver of the
continuation of the same breach.

 

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(c)       Section 409A. The Option is not intended to be subject to Section 409A
of the Code. Notwithstanding the foregoing or any provision of the Plan or this
Agreement, if any provision of the Plan or this Agreement contravenes Section
409A of the Code or could cause the Participant to incur any tax, interest or
penalties under Section 409A of the Code, the Committee may, in its sole
discretion and without the Participant’s consent, modify such provision to (i)
comply with, or avoid being subject to, Section 409A of the Code, or to avoid
the incurrence of taxes, interest and penalties under Section 409A of the Code,
and/or (ii) maintain, to the maximum extent practicable, the original intent and
economic benefit to the Participant of the applicable provision without
materially increasing the cost to the Company or contravening the provisions of
Section 409A of the Code. This Section 9(c) does not create an obligation on the
part of the Company to modify the Plan or this Agreement and does not guarantee
that the Option or the Option Shares will not be subject to interest and
penalties under Section 409A.

 

(d)       Notices. Any notices provided for in this Agreement or the Plan shall
be in writing and shall be deemed sufficiently given if either hand delivered or
if sent by fax, pdf/email or overnight courier, or by postage-paid first-class
mail. Notices sent by mail shall be deemed received three business days after
mailing but in no event later than the date of actual receipt. Notices shall be
directed, if to the Participant, at the Participant’s address indicated by the
Company’s records, or if to the Company, to the attention of the General Counsel
at the Company’s principal executive office.

 

(e)       Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement shall be
severable and enforceable to the extent permitted by law.

 

(f)       No Rights to Employment, Directorship or Service. Nothing contained in
this Agreement shall be construed as giving the Participant any right to be
retained, in any position, as an employee, consultant or director of the Company
or any of its Affiliates or shall interfere with or restrict in any way the
rights of the Company or any of its Affiliates, which are hereby expressly
reserved, to remove, terminate or discharge the Participant at any time for any
reason whatsoever.

 

(g)       Fractional Shares. In lieu of issuing a fraction of a share of Common
Stock resulting from any exercise of the Option or an adjustment of the Option
pursuant to Section 11 of the Plan or otherwise, the Company shall be entitled
to pay to the Participant an amount in cash equal to the Fair Market Value of
such fractional share.

 

(h)       Beneficiary. The Participant may file with the Committee a written
designation of a beneficiary on such form as may be prescribed by the Committee
and may, from time to time, amend or revoke such designation.

 

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(i)       Successors. The terms of this Agreement shall be binding upon and
inure to the benefit of the Company and its successors and assigns, and of the
Participant and the beneficiaries, executors, administrators, heirs and
successors of the Participant.

 

(j)       Entire Agreement. This Agreement and the Plan contain the entire
agreement and understanding of the parties hereto with respect to the subject
matter contained herein and supersede all prior communications, representations
and negotiations in respect thereto. No change, modification or waiver of any
provision of this Agreement shall be valid unless the same be in writing and
signed by the parties hereto, except for any changes permitted without consent
under Section 11 or 13 of the Plan.

 

(k)       Governing Law and Venue. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware, without regard
to principles of conflicts of laws thereof, or principles of conflicts of laws
of any other jurisdiction that could cause the application of the laws of any
jurisdiction other than the State of Delaware.

 

(l)       Dispute Resolution; Consent to Jurisdiction. All disputes between or
among any Persons arising out of or in any way connected with the Plan, this
Agreement or the Option shall be solely and finally settled by the Committee,
acting in good faith, the determination of which shall be final. Any matters not
covered by the preceding sentence shall be solely and finally settled in
accordance with the Plan, and the Participant and the Company consent to the
personal jurisdiction of the United States federal and state courts sitting in
Wilmington, Delaware, as the exclusive jurisdiction with respect to matters
arising out of or related to the enforcement of the Committee’s determinations
and resolution of matters, if any, related to the Plan or this Agreement not
required to be resolved by the Committee. Each such Person hereby irrevocably
consents to the service of process of any of the aforementioned courts in any
such suit, action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, to the last known address of such Person,
such service to become effective ten (10) days after such mailing.

 

(m)       Waiver of Jury Trial. Each party hereto hereby waives, to the fullest
extent permitted by applicable law, any right it may have to a trial by jury in
any legal proceeding directly or indirectly arising out of or relating to this
Agreement or the transactions contemplated (whether based on contract, tort or
any other theory). Each party hereto (A) certifies that no representative, agent
or attorney of any other party has represented, expressly or otherwise, that
such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (B) acknowledges that it and the other parties hereto have
been induced to enter into this Agreement by, among other things, the mutual
waivers and certifications in this section.

 

(n)       Headings. The headings of the Sections hereof are provided for
convenience only and are not to serve as a basis for interpretation or
construction, and shall not constitute a part, of this Agreement.

 

(o)       Counterparts. This Agreement may be executed in counterparts
(including via facsimile and electronic image scan (pdf)), each of which shall
be deemed to be an original, but both of which together shall constitute one and
the same instrument and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other parties.

 

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(p)       Electronic Delivery. By accepting this Agreement, the Participant
consents to the electronic delivery of prospectuses, annual reports and other
information required to be delivered by U.S. Securities and Exchange Commission
rules (which consent may be revoked in writing by the Participant at any time
upon three business days’ notice to the Company, in which case subsequent
prospectuses, annual reports and other information will be delivered in hard
copy to the Participant).

 

(q)       Electronic Participation in Plan. The Company may, in its sole
discretion, decide to deliver any documents related to current or future
participation in the Plan by electronic means. The Participant hereby consents
to receive such documents by electronic delivery and agrees to participate in
the Plan through an on-line or electronic system established and maintained by
the Company or a third party designated by the Company.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, this Nonqualified Stock Option Award Agreement has been
executed by the Company and the Participant as of the day first written above.

 

  IOVANCE BIOTHERAPEUTICS, INC.               By:                          
Name:     Title:                       PARTICIPANT                   [Insert
Name]

  

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