exv10w2



 








Exhibit 10.2









INCENTIVE STOCK OPTION AGREEMENT




                    , Optionee:




     Questcor Pharmaceuticals Inc. (the “Company”), pursuant to its 2006 Equity Incentive Award
Plan (the “Plan”) has this day granted to you, the optionee named above, an option to purchase
shares of the common stock of the Company (“Common Stock”). This option is intended to qualify and
will be treated as an “incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”).



     The grant hereunder is in connection with and in furtherance of the Company’s compensatory
benefit plan for participation of the Company’s employees (including officers), directors or
consultants. Any capitalized term not defined herein shall have the same meaning ascribed to it in
the Plan.



The details of your option are as follows:



1. The total number of shares of Common Stock subject to this option is                      (                    ).
Subject to the limitations contained herein, this option shall vest and be exercisable over a
period of four years beginning                      ___, 20___under the following schedule: 1/4th of
the total number of options will vest and be exercisable on the first (1st) anniversary
of the date of this Agreement. Thereafter, the remaining shares will vest at the rate of
1/48th of the total options subject to the grant on each monthly anniversary of the date
of the grant. Notwithstanding the foregoing, in the event of a Change in Control of the Company,
then this option shall become vested as provided in Section 12.2 of the Plan.



2. The exercise price of this option is                      ($                    ) per share, being not less than the
fair market value of the Common Stock on the last trading day prior to the date of grant of this
option.




     (a) Payment of the exercise price per share is due in full in cash (including check) upon
exercise of all or any part of each installment which has become exercisable by you; provided,
however, that, if at the time of exercise the Company’s Common Stock is publicly traded and quoted
regularly in the Wall Street Journal, payment of the exercise price, to the extent permitted by
applicable statutes and regulations, may be made by delivery of already-owned shares of Common
Stock, or a combination of cash and already-owned Common Stock. Such Common Stock (i) shall be
valued at its fair market value on the date of exercise, (ii) if originally acquired from the
Company, must have been held for the period required to avoid a charge to the Company’s reported
earnings, and (iii) must be owned free and clear of any liens, claims, encumbrances or security
interests.



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     (b) Notwithstanding the foregoing, this option may be exercised pursuant to a program
developed under Regulation T as promulgated by the Federal Reserve Board which results in the
receipt of cash (or check) by the Company prior to the issuance of Common Stock.


3. The minimum number of shares with respect to which this option may be exercised at any one time
is one hundred (100), except (a) as to an installment subject to exercise, as set forth in
paragraph 1, which amounts to fewer than one hundred (100) shares, in which case, as to the
exercise of that installment, the number of shares in such installment shall be the minimum number
of shares, and (b) with respect to the final exercise of this option this minimum shall not apply.
In no event may this option be exercised for any number of shares, which would require the issuance
of anything other than whole shares.



4. Notwithstanding anything to the contrary contained herein, this option may not be exercised
unless the shares issuable upon exercise of this option are then registered under the Securities
Act or, if such shares are not then so registered, the Company has determined that such exercise
and issuance would be exempt from the registration requirements of the Securities Act.



5. The term of this option commences on the date hereof and, unless sooner terminated as set forth
below or in the Plan, terminates on                      (which date shall be no more than ten (10) years
from the date this option is granted). In no event may this option be exercised after the date on
which it terminates. This option shall terminate prior to the expiration of its term as follows:
ninety (90) calendar days after the termination of your employment with the Company or an affiliate
of the Company (as defined in the Plan) for any reason or for no reason unless:




     (a) such termination of employment is due to your permanent and total disability (within the
meaning of Section 422(c)(6) of the Code), in which event the option shall terminate on the earlier
of the termination date set forth above or twelve (12) months following such termination of
employment; or



     (b) such termination of employment is due to your death, in which event the option shall
terminate on the earlier of the termination date set forth above or twelve (12) months after your
death; or



     (c) during any part of such three (3) month period the option is not exercisable solely
because of the condition set forth in paragraph 4 above, in which event the option shall not
terminate until the earlier of the termination date set forth above or until it shall have been
exercisable for an aggregate period of three (3) months after the termination of employment; or



     (d) exercise of the option within three (3) months after termination of your employment with
the Company or with an affiliate would result in liability under section 16(b) of the Exchange Act,
in which case the option will terminate on the earlier of (i) the termination date set forth above,
(ii) the tenth (10th) day after the last date upon which exercise would result in such liability or
(iii) six (6) months and ten (10) days after the termination of your employment with the Company or
an affiliate.



     However, this option may be exercised following termination of employment only as to that
number of shares as to which it was exercisable on the date of termination of employment under the
provisions of paragraph 1 of this option. Further, if you leave the employment of the Company
before the six-month anniversary of the commencement of this Stock Option grant, then your right



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to exercise this option as to any shares as to which it was otherwise exercisable prior to
termination is immediately terminated.


6. This option may be exercised, to the extent specified above, by delivering a notice of exercise
(in a form designated by the Company) together with the exercise price to the Secretary of the
Company, or to such other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.




     (a) By exercising this option you agree that:



          (i) the Company may require you to enter an arrangement providing for the payment by you to
the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise
of this option; (2) the lapse of any substantial risk of forfeiture to which the shares are subject
at the time of exercise; or (3) the disposition of shares acquired upon such exercise; and




          (ii) you will notify the Company in writing within fifteen (15) days after the date of any
disposition of any of the shares of the Common Stock issued upon exercise of this option that
occurs within two (2) years after the date of this option grant or within one (1) year after such
shares of Common Stock are transferred upon exercise of this option.



7. This option is not transferable, except by will or by the laws of descent and distribution, and
is exercisable during your life only by you.



8. This option is not an employment contract and nothing in this option shall be deemed to create
in any way whatsoever any obligation on your part to continue in the employ of the Company, or of
the Company to continue your employment with the Company.



9. Any notices provided for in this option or the Plan shall be given in writing and shall be
deemed effectively given upon receipt or, in the case of notices delivered by the Company to you,
five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the
address specified below or at such other address as you hereafter designate by written notice to
the Company.



10. This option is subject to all the provisions of the Plan, a copy of which is attached hereto
and its provisions are hereby made a part of this option, and this option is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of this option
and those of the Plan, the provisions of the Plan shall control.




[Signature on Following Page]




Dated the                      day of                     ,                     .




Very truly yours,




QUESTCOR PHARMACEUTICALS, INC.




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	 	By	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	Duly authorized on behalf	 	 
	 

	 	 	 	of the Board of Directors	 	 






The undersigned:




     (a) Acknowledges receipt of the foregoing option and the attachments referenced therein and
understands that all rights and liabilities with respect to this option are set forth in the option
and the Plan; and



     (b) Acknowledges that as of the date of grant of this option, it sets forth the entire
understanding between the undersigned optionee and the Company and its affiliates regarding the
acquisition of stock in the Company and supersedes all prior oral and written agreements on that
subject with the exception of the following agreements only:



     NONE                     



                    (Initial)




	 	 	 	 	 	 	 
	 

	 	OTHER	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 





	 	 	 	 	 
	 

	 	 	 	 
	 

	 	Optionee	 	 
	 

	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 	 	 
	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	SS# / Tax I.D.#
	 	 	 	 
	 

	 	 	 	 





Attachments:




     Form of Exercise



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NOTICE OF EXERCISE




Date of Exercise:                                         




Questcor Pharmaceuticals, Inc.

3260 Whipple Road

Union City, California 94587




Ladies and Gentlemen:




     This constitutes notice under my stock option that I elect to purchase the number of shares
for the price set forth below.



	 	 	 	 	 	 	 	 	 
	Type of option (check one)	 	Incentive __     Nonstatutory __
	 
	 	 	 	 	 	 	 	 
	Stock option dated
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Stock option grant ID#
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Number of shares as
to which option is
exercised:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Certificates to be
issued in name of:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total exercise price:
	 	$	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	+Cash payment delivered
herewith:
	 	$	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 





+All checks must be made payable to “Questcor Pharmaceuticals Inc.”



By this exercise, I agree (i) to provide such additional documents as you may require pursuant to
the terms of the 2006 Equity Incentive Award Plan, (ii) to provide for the payment by me to you (in
the manner designated by you) of your withholding obligation, if any, relating to the exercise of
this option, and (iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any shares of Common Stock
issued upon exercise of this option that occurs within two (2) years after the date of grant of
this option or within one (1) year after such shares of Common Stock are issued upon exercise of
this option.




Very truly yours,




                                                            





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