Form Notice of Grant and Stock Option Agreement



 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»









			
	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.

				
	  

	 	 	 	By:  	 	  


	 «Optionee»
	 	 	 	Name:  	 	 
	 	 	 	 	Title:  	 	 
	 «SSN»

	 	 	 	 	 	 
	 Social Security Number
	 	 	 	 	 	 

  

 -2- 








 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. 







 (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 
  

 -2- 








 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 
  

 -3- 








 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. 
  

 -4- 








 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:	 	  

	 	 
				
	 	 	Date of Purchase:	 	  

	 	 
				
	 	 	Number of Shares:	 	  

	 	 
				
	 	 	Purchase Price:	 	  

	 	 
				
	 	 	 Method of Payment
 of Purchase
Price:
	 	  
  

	 	 

  

							
	 	 	Social Security No.:	 	  

	 	 
			
	 	 	The shares should be issued as follows:	 	 

  

							
	 	 	Name:	 	  

	 	 
				
	 	 	Address:	 	  

	 	 
				
	 	 	 	 	  

	 	 
				
	 	 	 	 	  

	 	 
				
	 	 	Signed:	 	  

	 	 
				
	 	 	Date:	 	  

	 	 

  

 -5-