Exhibit 10.11

 

SEATTLE GENETICS, INC.

 

1998 STOCK OPTION PLAN

 

NOTICE OF STOCK OPTION GRANT

 

«Optionee»

«Title»

 

You have been granted an option to purchase Common Stock of Seattle Genetics,
Inc. (the “Company”) as follows:

 

Board Approval Date:    «Date_of_Grant»

Date of Grant (Later of Board Approval Date or

Commencement of

Employment/Consulting):

   «Date_of_Grant» Exercise Price Per Share:    $«Exercise_Price» Total Number
of Shares Granted:    «Number_of_Shares» Total Exercise Price:   
«Total_Exercise_Price_» Type of Option:    «Type_of_Option» Expiration Date:   
«Expiration_Date» Vesting Commencement Date:    «Vesting_Commencement_Date»
Vesting/Exercise Schedule:    «Vesting_Schedule» Termination Period:   
«Termination_Period»

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Transferability:    This Option may not be transferred.

 

By your signature and the signature of the Company’s representative below, you
and the Company agree that this option is granted under and governed by the
terms and conditions of the Seattle Genetics, Inc. 1998 Stock Option Plan and
the Stock Option Agreement, both of which are attached and made a part of this
document.

 

In addition, you agree and acknowledge that your rights to any Shares underlying
the Option will be earned only as you provide services to the Company over time,
that the grant of the Option is not as consideration for services you rendered
to the Company prior to your Vesting Commencement Date, and that nothing in this
Notice or the attached documents confers upon you any right to continue your
employment or consulting relationship with the Company for any period of time,
nor does it interfere in any way with your right or the Company’s right to
terminate that relationship at any time, for any reason, with or without cause.

 

       

        SEATTLE GENETICS, INC.

 

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      By:    

 

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«Optionee»

      Name:               Title:      

«SSN»

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Social Security Number

           

 

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SEATTLE GENETICS, INC.

 

1998 STOCK OPTION PLAN

 

STOCK OPTION AGREEMENT

 

1.    Grant of Option.    Seattle Genetics, Inc., a Delaware corporation (the
“Company”), hereby grants to «Optionee» (“Optionee”), an option (the “Option”)
to purchase the total number of shares of Common Stock (the “Shares”) set forth
in the Notice of Stock Option Grant (the “Notice”), at the exercise price per
Share set forth in the Notice (the “Exercise Price”) subject to the terms,
definitions and provisions of the Seattle Genetics, Inc. 1998 Stock Option Plan
(the “Plan”) adopted by the Company, which is incorporated in this Agreement by
reference. Unless otherwise defined in this Agreement, the terms used in this
Agreement shall have the meanings defined in the Plan. This Stock Option
Agreement shall be deemed executed by the Company and Optionee upon execution by
such parties of the Notice.

 

2.    Designation of Option.    This Option is intended to be an Incentive Stock
Option as defined in Section 422 of the Code only to the extent so designated in
the Notice, and to the extent it is not so designated or to the extent the
Option does not qualify as an Incentive Stock Option, it is intended to be a
Nonstatutory Stock Option.

 

Notwithstanding the above, if designated as an Incentive Stock Option, in the
event that the Shares subject to this Option (and all other Incentive Stock
Options granted to Optionee by the Company or any Parent or Subsidiary,
including under other plans of the Company) that first become exercisable in any
calendar year have an aggregate fair market value (determined for each Share as
of the date of grant of the option covering such Share) in excess of $100,000,
the Shares in excess of $100,000 shall be treated as subject to a Nonstatutory
Stock Option, in accordance with Section 5(c) of the Plan.

 

3.    Exercise of Option.    This Option shall be exercisable during its term in
accordance with the Vesting/Exercise Schedule set out in the Notice and with the
provisions of Section 10 of the Plan as follows:

 

(a)    Right to Exercise.

 

(i)    This Option may not be exercised for a fraction of a share.

 

(ii)    In the event of Optionee’s death, disability or other termination of
employment, the exercisability of the Option is governed by Section 5 below,
subject to the limitations contained in this Section 3.

 

(iii)    In no event may this Option be exercised after the Expiration Date of
the Option as set forth in the Notice.

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(b)    Method of Exercise.

 

(i)    This Option shall be exercisable by delivering to the Company a written
notice of exercise (in the form attached as Exhibit A or in any other form of
notice approved by the Plan Administrator) which shall state Optionee’s election
to exercise the Option, the number of Shares in respect of which the Option is
being exercised, and such other representations and agreements as to the
holder’s investment intent with respect to such Shares as may be required by the
Company pursuant to the provisions of the Plan. Such written notice shall be
signed by Optionee and shall be delivered to the Company by such means as are
determined by the Plan Administrator in its discretion to constitute adequate
delivery. The written notice shall be accompanied by payment of the Exercise
Price. This Option shall be deemed to be exercised upon receipt by the Company
of such written notice accompanied by the Exercise Price.

 

(ii)    As a condition to the exercise of this Option and as further set forth
in Section 12 of the Plan, Optionee agrees to make adequate provision for
federal, state or other tax withholding obligations, if any, which arise upon
the vesting or exercise of the Option, or disposition of Shares, whether by
withholding, direct payment to the Company, or otherwise.

 

(iii)    The Company is not obligated, and will have no liability for failure,
to issue or deliver any Shares upon exercise of the Option unless such issuance
or delivery would comply with the Applicable Laws, with such compliance
determined by the Company in consultation with its legal counsel. This Option
may not be exercised until such time as the Plan has been approved by the
stockholders of the Company, or if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would
constitute a violation of any applicable federal or state securities or other
law or regulation, including any rule under Part 221 of Title 12 of the Code of
Federal Regulations as promulgated by the Federal Reserve Board. As a condition
to the exercise of this Option, the Company may require Optionee to make any
representation and warranty to the Company as may be required by the Applicable
Laws. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to Optionee on the date on which the Option is exercised
with respect to such Shares.

 

4.    Method of Payment.    Payment of the Exercise Price shall be by any of the
following, or a combination of the following, at the election of Optionee:

 

(a)    cash or check; or

 

(b)    following the date, if any, upon which the Common Stock is a Listed
Security, delivery of a properly executed exercise notice together with
irrevocable instructions to a broker approved by the Company to deliver promptly
to the Company the amount of sale or loan proceeds required to pay the exercise
price.

 

5.    Termination of Relationship.    Following the date of termination of
Optionee’s Continuous Service Status for any reason (the “Termination Date”),
Optionee may exercise the Option only as set forth in the Notice and this
Section 5. To the extent that Optionee is not

 

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entitled to exercise this Option as of the Termination Date, or if Optionee does
not exercise this Option within the Termination Period set forth in the Notice
or the termination periods set forth below, the Option shall terminate in its
entirety. In no event, may any Option be exercised after the Expiration Date of
the Option as set forth in the Notice.

 

(a)    Termination.    In the event of termination of Optionee’s Continuous
Service Status other than as a result of Optionee’s disability or death,
Optionee may, to the extent otherwise so entitled at the date of such
termination (the “Termination Date”), exercise this Option during the
Termination Period set forth in the Notice.

 

(b)    Other Terminations.    In connection with any termination other than a
termination covered by Section 5(a), Optionee may exercise the Option only as
described below:

 

(i)    Termination upon Disability of Optionee.    In the event of termination
of Optionee’s Continuous Service Status as a result of Optionee’s disability,
Optionee may, but only within twelve months from the Termination Date, exercise
this Option to the extent Optionee was entitled to exercise it as of such
Termination Date.

 

(ii)    Death of Optionee.    In the event of the death of Optionee (a) during
the term of this Option and while an Employee or Consultant of the Company and
having been in Continuous Service Status since the date of grant of the Option,
or (b) within thirty (30) days after Optionee’s Termination Date, the Option may
be exercised at any time within six months following the date of death by
Optionee’s estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent Optionee was entitled to
exercise the Option as of the Termination Date.

 

6.    Non-Transferability of Option.    This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by him or her. The terms
of this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee.

 

7.    Tax Consequences.    Below is a brief summary as of the date of this
Option of certain of the federal tax consequences of exercise of this Option and
disposition of the Shares under the laws in effect as of the Date of Grant. THIS
SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.

 

(a)    Incentive Stock Option.

 

(i)    Tax Treatment upon Exercise and Sale of Shares.    If this Option
qualifies as an Incentive Stock Option, there will be no regular federal income
tax liability upon the exercise of the Option, although the excess, if any, of
the fair market value of the Shares on the date of exercise over the Exercise
Price will be treated as an adjustment to the alternative minimum tax for
federal tax purposes and may subject Optionee to the alternative minimum tax in
the year of exercise. If Shares issued upon exercise of an Incentive Stock
Option are held for

 

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at least one year after exercise and are disposed of at least two years after
the Option grant date, any gain realized on disposition of the Shares will also
be treated as long-term capital gain for federal income tax purposes. If Shares
issued upon exercise of an Incentive Stock Option are disposed of within such
one-year period or within two years after the Option grant date, any gain
realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the difference between the Exercise
Price and the lesser of (i) the fair market value of the Shares on the date of
exercise, or (ii) the sale price of the Shares.

 

(ii)    Notice of Disqualifying Dispositions.    With respect to any Shares
issued upon exercise of an Incentive Stock Option, if Optionee sells or
otherwise disposes of such Shares on or before the later of (i) the date two
years after the Option grant date, or (ii) the date one year after the date of
exercise, Optionee shall immediately notify the Company in writing of such
disposition. Optionee acknowledges and agrees that he or she may be subject to
income tax withholding by the Company on the compensation income recognized by
Optionee from the early disposition by payment in cash or out of the current
earnings paid to Optionee.

 

(b)    Nonstatutory Stock Option.    If this Option does not qualify as an
Incentive Stock Option, there may be a regular federal (and state) income tax
liability upon the exercise of the Option. Optionee will be treated as having
received compensation income (taxable at ordinary income tax rates) equal to the
excess, if any, of the fair market value of the Shares on the date of exercise
over the Exercise Price. If Optionee is an Employee, the Company will be
required to withhold from Optionee’s compensation or collect from Optionee and
pay to the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise. If Shares issued upon exercise of a
Nonstatutory Stock Option are held for at least one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for federal
income tax purposes.

 

8.    Effect of Agreement.    Optionee acknowledges receipt of a copy of the
Plan and represents that he or she is familiar with the terms and provisions
thereof (and has had an opportunity to consult counsel regarding the Option
terms), and hereby accepts this Option and agrees to be bound by its contractual
terms as set forth herein and in the Plan. Optionee hereby agrees to accept as
binding, conclusive and final all decisions and interpretations of the Plan
Administrator regarding any questions relating to the Option. In the event of a
conflict between the terms and provisions of the Plan and the terms and
provisions of the Notice and this Agreement, the Plan terms and provisions shall
prevail. The Option, including the Plan, constitutes the entire agreement
between Optionee and the Company on the subject matter hereof and supersedes all
proposals, written or oral, and all other communications between the parties
relating to such subject matter.

 

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EXHIBIT A

 

NOTICE OF EXERCISE

 

To:                Seattle Genetics, Inc.

Attn:             Stock Option Administrator

Subject:        Notice of Intention to Exercise Stock Option

 

This is official notice that the undersigned (“Optionee”) intends to exercise
Optionee’s option to purchase                      shares of Seattle Genetics,
Inc. Common Stock, under and pursuant to the Company’s 1998 Stock Option Plan
and the Stock Option Agreement dated                     , as follows:

 

    Grant Number:  

 

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        Date of Purchase:  

 

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        Number of Shares:  

 

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        Purchase Price:  

 

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Method of Payment

of Purchase Price:

 

 

 

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    Social Security No.:  

 

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        The shares should be issued as follows:    

 

    Name:  

 

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        Address:  

 

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        Signed:  

 

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        Date:  

 

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