Prepared by MERRILL CORPORATION www.edgaradvantage.com


QuickLinks
 -- Click here to rapidly navigate through this document
 



  SEATTLE GENETICS, INC.
       2000 EMPLOYEE STOCK PURCHASE PLAN         


    The following constitute the provisions of the 2000 Employee Stock Purchase Plan of Seattle Genetics, Inc. 



    1.  Purpose. The purpose of the Plan is to provide employees of the Company and its Designated Subsidiaries with an
opportunity to purchase Common Stock of the Company. It is the intention of the Company to have the Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of the Code. The
provisions of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 


    2.  Definitions.


    (a) "Board" means the Board of Directors of the Company. 


    (b) "Code" means the Internal Revenue Code of 1986, as amended. 


    (c) "Common Stock" means the Common Stock of the Company. 


    (d) "Company" means Seattle Genetics, Inc., a Delaware corporation. 


    (e) "Compensation" means total cash compensation received by an Employee from the Company or a Designated Subsidiary. By
way of illustration, but not limitation, Compensation includes regular compensation such as salary, wages, overtime, shift differentials, bonuses (other than bonuses offered in connection with, and as
an inducement for, the commencement of employment), commissions and incentive compensation, but excludes relocation payments or reimbursements, expense reimbursements, tuition or other reimbursements,
automobile allowances, housing allowances, cash payments in lieu of sick or vacation time benefits and income realized as a result of participation in any stock option, stock purchase, or similar plan
of the Company or any Designated Subsidiary. 


    (f)  "Continuous Status as an Employee" means the absence of any interruption or termination of service as an Employee.
Continuous Status as an Employee shall not be considered interrupted in the case of (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the
Administrator, provided that such leave is for a period of not more than 90 days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided
otherwise pursuant to Company policy adopted from time to time; or (iv) in the case of transfers between locations of the Company or between the Company and its Designated Subsidiaries. 


    (g) "Contributions" means all amounts credited to the account of a participant pursuant to the Plan. 



    (h) "Corporate Transaction" means a sale of all or substantially all of the Company's assets, or a merger, consolidation
or other capital reorganization of the Company with or into another corporation. 


    (i)  "Designated Subsidiaries" means the Subsidiaries which have been designated by the Board from time to time in its
sole discretion as eligible to participate in the Plan; provided however that the Board shall only have the discretion to designate Subsidiaries if the issuance of options to such Subsidiary's
Employees pursuant to the Plan would not cause the Company to incur adverse accounting charges. 


    (j)  "Employee" means any person, including an Officer, who is customarily employed for at least twenty
(20) hours per week and more than five (5) months in a calendar year by the Company or one of its Designated Subsidiaries. 


    (k) "Exchange Act" means the Securities Exchange Act of 1934, as amended. 


    (l)  "Offering Date" means the first business day of each Offering Period of the Plan. 



    (m) "Offering Period" means a period of twenty-four (24) months commencing on February 1 and
August 1 of each year, except for the first Offering Period and as otherwise as set forth in Section 4(a). 







    (n) "Officer" means a person who is an officer of the Company within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder. 


    (o) "Plan" means this Employee Stock Purchase Plan. 


    (p) "Purchase Date" means the last day of each Purchase Period of the Plan. 


    (q) "Purchase Period" means a period of six (6) months within an Offering Period, except for the first Purchase
Period as set forth in Section 4(b). 


    (r) "Purchase Price" means with respect to a Purchase Period an amount equal to 85% of the Fair Market Value (as defined
in Section 7(b) below) of a Share of Common Stock on the Offering Date or on the Purchase Date, whichever is lower; provided, however, that in the event (i) of any increase in the number
of Shares available for issuance under the Plan as a result of a stockholder-approved amendment to the Plan, and (ii) all or a portion of such additional Shares are to be issued with respect to
one or more Offering Periods that are underway at the time of such increase ("Additional Shares"), and (iii) the Fair Market Value of a Share of
Common Stock on the date of such increase (the "Approval Date Fair Market Value") is higher than the Fair Market Value on the Offering Date for any such
Offering Period, then in such instance the Purchase Price with respect to Additional Shares shall be 85% of the Approval Date Fair Market Value or the Fair Market Value of a Share of Common Stock on
the Purchase Date, whichever is lower. 


    (s) "Share" means a share of Common Stock, as adjusted in accordance with Section 19 of the Plan. 


    (t)  "Subsidiary" means a corporation, domestic or foreign, of which not less than 50% of the voting shares are held by
the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary. 


    3.  Eligibility.


    (a) Any
person who is an Employee as of the Offering Date of a given Offering Period shall be eligible to participate in such Offering Period under the Plan, subject to
the requirements of Section 5(a) and the limitations imposed by Section 423(b) of the Code. 


    (b) Any
provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) if, immediately after the grant, such
Employee (or any other person whose stock would be attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company and/or hold outstanding options to
purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any subsidiary of the Company, or (ii) if such
option would permit his or her rights to purchase stock under all employee stock purchase plans (described in Section 423 of the Code) of the Company and its Subsidiaries to accrue at a rate
which exceeds Twenty-Five Thousand Dollars ($25,000) of the Fair Market Value (as defined in Section 7(b) below) of such stock (determined at the time such option is granted) for
each calendar year in which such option is outstanding at any time. 


    4.  Offering Periods and Purchase Periods.


    (a) Offering Periods. The Plan shall be implemented by a series of Offering Periods of approximately
twenty-four (24) months duration, with new Offering Periods commencing on or about February 1 and August 1 of each year (or at such other time or times as may be
determined by the Board of Directors). If and to the extent the Board takes action prior to the effective date of the Company's Registration Statement on Form S-1 for the initial
public offering of the Company's Common Stock (the "IPO Date") to grant eligible Employees options to participate in an Offering Period beginning on the
IPO Date (such period, the "IPO Offering Period"), then such period shall begin on the IPO Date and continue until January 31, 2003. The Plan
shall continue until terminated in 


2







accordance with Section 20 hereof. The Board of Directors of the Company shall have the power to change the duration and/or the frequency of Offering Periods with respect to future offerings
without stockholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the first Offering Period to be affected. 



    (b) Purchase Periods. Each Offering Period shall consist of four (4) consecutive Purchase Periods of six
(6) months' duration. The last day of each Purchase Period shall be the "Purchase Date" for such Purchase Period. A Purchase Period commencing on
February 1 shall end on the next July 31 and Purchase Period commencing on August 1 shall end on the next January 31. If the Board takes action to cause there to be an IPO
Offering Period, then the first Purchase Period shall commence on the IPO
Date and shall end on July 31, 2001. The Board of Directors of the Company shall have the power to change the duration and/or frequency of Purchase Periods with respect to future purchases
without stockholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the first Purchase Period to be affected. 


    5.  Participation.


    (a) Except
with respect to the IPO Offering Period, if any, an eligible Employee may become a participant in the Plan by completing a subscription agreement on the form
provided by the Company and filling it with the Company prior to the applicable Offering Date. The subscription agreement shall set forth the percentage of the participant's. Compensation (subject to
Section 6(a) below) to be paid as Contributions pursuant to the Plan. With respect to the IPO Offering Period, if any, an eligible Employee will become a participant in the Plan by the Board's
taking action prior to the IPO Date to grant such persons options to purchase Shares pursuant to the Plan. 


    (b) Except
with respect to the IPO Offering Period, if any, payroll deductions shall commence on the first payroll paid following the Offering Date and shall end on the
last payroll paid on or prior to the last Purchase Period of the Offering Period to which the subscription agreement is applicable, unless sooner terminated by the participant as provided in
Section 10. With respect to the IPO Offering Period, payroll deductions shall commence on the first payroll date following the date, if any, on which the participant elects pursuant to
Section 6(b) below to have amounts withheld from his or her Compensation. 


    6.  Method of Payment For Purchase of Shares.


    (a) Except
with respect to the first Purchase Period of the IPO Offering Period, if any, this Plan shall be operated as a payroll deduction plan. 



    (i)  IPO Offering Period. A participant in the IPO Offering Period shall make payment for the purchase of Shares by
(A) making a lump sum cash payment to the Company on or prior to the first Purchase Date for such Offering Period for the amount of the purchase price for the Shares being purchased (after
which date an Employee wishing to continue participating in the Plan shall participate on a payroll deduction basis unless the participant withdraws from the Plan under Section 10), or
(B) electing, following the IPO Date, to have amounts directly withheld from the Employee's Compensation pursuant to Section 6(a)(ii). To the extent that a participant purchases Shares
on the first Purchase Date
of the IPO Offering Period by delivering a check to the Company, such delivery and purchase shall operate, unless the participant withdraws from the Plan pursuant to Section 10, as an election
by the participant to continue participating in the Plan on the payroll deduction basis described in Section 6(a)(ii) and the Company shall withhold from the participant's Compensation
beginning with the first payroll paid following such first Purchase Date at a Contribution rate equal to the ratio that the aggregate purchase price paid for Shares purchased on such Purchase Date
bears to the participant's total Compensation during that Purchase Period (which rate shall not exceed the percentage specified in Section 6(a)(ii)). 



3







    (ii) Other Periods. A participant shall elect to have payroll deductions made on each payday during an Offering Period
in an amount not less than one percent (1%) and not more than twenty percent (20%) (or such other maximum percentage as the Board may establish from time to time before an Offering Date) of such
participant's Compensation on each payday during the Offering Period; provided that to the extent a participant is participating in more than one Offering Period, the maximum aggregate percentage of
Compensation that he or she may contribute under the Plan shall be twenty percent (20%) (or such other maximum percentage as the Board may establish from time to time before an Offering Date). All
payroll deductions made by a participant shall be credited to his or her account under the Plan. Once a participant is participating in the Plan on a payroll deduction basis, he or she may not make
any additional payments into such account. 




    (b) A
participant may discontinue his or her participation in the Plan as provided in Section 10, or, on one occasion only during a Purchase Period may increase
and on one occasion only during a Purchase Period may decrease the rate of his or her Contributions with respect to the Offering Period, by completing and filing with the Company a new subscription
agreement authorizing a change in the payroll deduction rate. Any change in rate of Contributions pursuant to the preceding sentence shall be effective as of the beginning of the next calendar month
following the date of filing of the new subscription agreement, provided the agreement indicating such change is filed at least ten (10) business days prior to such date and, if not, then as of
the beginning of the next succeeding calendar month. With respect to the IPO Offering Period, any election by a participant to commence payroll deductions under the Plan following the IPO Date at a
rate of Compensation that would result in his or her purchasing less than the full amount of Shares that he or she could purchase under the option granted to him or her by the Board (including a
deemed election pursuant to the second sentence of Section 6(a)(i)) shall not count as a decrease in participation for purposes of the first sentence of this Section 6(b). 


    (c) Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b), a participant's payroll
deductions may be decreased by the Company to 0% at any time during a Purchase Period. Payroll deductions shall re-commence at the rate provided in such
participant's subscription agreement at the beginning of the first Purchase Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in
Section 10. In addition, a participant's payroll deductions may be decreased by the Company to 0% at any time during a Purchase Period in order to avoid unnecessary payroll contributions as a
result of application of the maximum share limit set forth in Section 7(a), or as a result of the limitations set forth in Section 3(b), in which case payroll deductions shall
re-commence at the rate provided in such participant's subscription agreement at the beginning of the next Purchase Period, unless terminated by the participant as provided in
Section 10. 


    (d) At
the time the option is exercised, in whole or in part, or at the time some or all of the Company's Common Stock issued under the Plan is disposed of, the
participant must make adequate provision for the Company's federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common
Stock. At any time, the Company may, but shall not be obligated to, withhold from the participant's compensation the amount necessary for the Company to meet applicable withholding obligations,
including any withholding required to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Stock by the participant. 


    7.  Grant of Option.


    (a) Except
with respect to the IPO Offering Period, if any, and subject to the final sentence of this Section 7(a), on the Offering Date of each Offering Period,
each eligible Employee participating in such Offering Period shall be granted an option to purchase on each Purchase Date a number of Shares of the Company's Common Stock determined by dividing such
Employee's Contributions 


4







accumulated prior to such Purchase Date and retained in the participant's account as of the Purchase Date by the applicable Purchase Price. With respect to the IPO Offering Period, if any, each
eligible Employee shall be granted an option to purchase on each Purchase Date a number of Shares of the Company's Common Stock determined by dividing the maximum amount specified by the Board in
granting the option (which amount shall be a percentage of such Employee's Compensation) by the applicable Purchase Price. Notwithstanding the above, the maximum number of Shares an Employee may
purchase during each Purchase Period of any Offering Period (including the IPO Offering Period) shall be 2,000 Shares (subject to any adjustment pursuant to Section 19 below), and provided
further that such purchase shall be subject to the limitations set forth in Sections 3(b) and 13. 


    (b) The
fair market value of the Company's Common Stock on a given date (the "Fair Market Value") shall be determined by
the Board in its discretion based on the closing price of the Common Stock for such date (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date),
as reported by the National Association of Securities Dealers Automated Quotation (Nasdaq) National Market or, if such price is not reported, the mean of the bid and asked prices per share of the
Common Stock as reported by Nasdaq or, in the event the Common Stock is listed on a stock exchange, the Fair Market Value per share shall be the closing sales price on such exchange on such date (or,
in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported in The Wall Street Journal. For
purposes of the IPO Offering Period, if any, the Fair Market Value of a share of the Common Stock of the Company shall be the Price to Public as set forth in the final prospectus filed with the
Securities and Exchange Commission pursuant to Rule 424 under the Securities Act of 1933, as amended. 



    8.  Exercise of Option. Except with respect to the first Purchase Period of the IPO Offering Period, if any, and unless
a participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of Shares will be exercised automatically on each Purchase Date of an Offering Period, and
the maximum number of full Shares subject to the option will be purchased at the applicable Purchase Price with the accumulated Contributions in his or her account. With respect to the first Purchase
Period of the IPO Offering Period, a participant's option thereunder shall either be exercised as provided in the preceding sentence or by the participant's delivering to the Company a check for the
full amount of the purchase price of the Shares being purchased (which number of Shares may be less than the entire number of Shares subject to the option granted by the Board) prior to the time of
purchase for such Purchase Date. No fractional Shares shall be issued. The Shares purchased upon exercise of an option hereunder shall be deemed to be transferred to the participant on the Purchase
Date. During his or her lifetime, a participant's option to purchase Shares hereunder is exercisable only by him or her. 


    9.  Delivery. As promptly as practicable after each Purchase Date of each Offering Period, the Company shall arrange the
delivery to each participant, as appropriate, of the Shares purchased upon exercise of his or her option. No fractional Shares shall be purchased; any payroll deductions accumulated in a participant's
account which are not sufficient to purchase a full Share shall be retained in the participant's account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 below. Any other amounts left over in a participant's account after a Purchase Date shall be returned to the participant. 


    10. Voluntary Withdrawal; Termination of Employment.


    (a) A
participant may withdraw all but not less than all the Contributions credited to his or her account under the Plan at any time prior to each Purchase Date by
giving written notice to the Company. All
of the participant's Contributions credited to his or her account will be paid to him or her promptly after receipt of his or her notice of withdrawal and his or her option for the current period will
be automatically terminated, and no further Contributions for the purchase of Shares will be made during the Offering Period. With respect to the IPO Offering Period, a participant who has not 


5







previously chosen to have amounts withheld from his or her Compensation shall be considered to have withdrawn from such period if he or she fails to exercise the options granted hereunder by
delivering to the Company the full amount of the purchase price for the Shares being purchased (which number of Shares may be less than the entire number of Shares subject to the option granted by the
Board) for the first Purchase Period within the IPO Offering Period. 


    (b) Upon
termination of the participant's Continuous Status as an Employee prior to the Purchase Date of an Offering Period for any reason, including retirement or
death, the Contributions credited to his or her account will be returned to him or her or, in the case of his or her death, to the person or persons entitled thereto under Section 15, and his
or her option will be automatically terminated. 


    (c) In
the event an Employee fails to remain in Continuous Status as an Employee of the Company for at least twenty (20) hours per week during the Offering
Period in which the employee is a participant, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to his or her account will be returned to him or her
and his or her option terminated. 


    (d) A
participant's withdrawal from an offering will not have any effect upon his or her eligibility to participate in a succeeding offering or in any similar plan
which may hereafter be adopted by the Company. 


    11. Automatic Withdrawal. To the extent permitted by any applicable laws, regulations or stock exchange rules, if the
Fair Market Value of the Shares on an Offering Date for an Offering Period (the "New Offering Period") commencing within an Offering Period (the "Ongoing Offering Period") then in progress, is lower
than was the Fair Market Value of the Shares on the Offering Date for the Ongoing Offering Period, then every participant in the Ongoing Offering Period shall automatically be deemed to have
(i) withdrawn from the Ongoing Offering Period at the close of the Purchase Period immediately preceding the New Offering Period, and (ii) to have enrolled in such New Offering Period. 


    12. Interest. No interest shall accrue on the Contributions of a participant in the Plan. 


    13. Stock.


    (a) Subject
to adjustment as provided in Section 19, the maximum number of Shares which shall be made available for sale under the Plan shall be 300,000 Shares,
plus an annual increase on the first day of each of the Company's fiscal years beginning in 2002 through 2010 equal to the lesser of (i) 300,000 Shares, (ii) one percent (1.0%) of the
Shares outstanding on the last day of the immediately preceding fiscal year, or (iii) such lesser number of Shares as is determined by the Board. If the Board determines that, on a given
Purchase Date, the number of shares with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the
Offering Date of the applicable Offering Period, or (ii) the number of shares available for sale under the Plan on such Purchase Date, the Board may in its sole discretion provide
(x) that the Company shall make a pro rata allocation of the Shares of Common Stock available for purchase on such Offering Date or Purchase Date, as applicable, in as uniform a manner as shall
be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Purchase Date, and continue all Offering
Periods then in effect, or (y) that the Company shall make a pro rata allocation of the shares available for purchase on such Offering Date or Purchase Date, as applicable, in as uniform a
manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Purchase Date, and terminate
any or all Offering Periods then in effect pursuant to Section 20 below. The Company may make pro rata allocation of the Shares available on the Offering Date of any applicable Offering Period
pursuant to the preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company's stockholders subsequent to such Offering Date. 


6







    (b) The participant shall have no interest or voting right in Shares covered by his or her option until such option has been exercised. 


    (c) Shares
to be delivered to a participant under the Plan will be registered in the name of the participant or in the name of the participant and his or her spouse. 



    14. Administration. The Board, or a committee named by the Board, shall supervise and administer the Plan and shall have
full power to adopt, amend and rescind any rules deemed desirable and appropriate for the administration of the Plan and not inconsistent with the Plan, to construe and
interpret the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. 


    15. Designation of Beneficiary.


    (a) A
participant may file a written designation of a beneficiary who is to receive any Shares and cash, if any, from the participant's account under the Plan in
the event of such participant's death subsequent to the end of a Purchase Period but prior to delivery to him or her of such Shares and cash. In addition, a participant may file a written
designation of a beneficiary who is to receive any cash from the participant's account under the Plan in the event of such participant's death prior to the Purchase Date of an Offering Period. If a
participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective. 


    (b) Such
designation of beneficiary may be changed by the participant (and his or her spouse, if any) at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant's death, the Company shall deliver such Shares and/or cash to the
executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver
such Shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the
Company may designate. 


    16. Transferability. Neither Contributions credited to a participant's account nor any rights with regard to the
exercise of an option or to receive Shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution, or as
provided in Section 15) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an
election to withdraw funds in accordance with Section 10. 


    17. Use of Funds. All Contributions received or held by the Company under the Plan may be used by the Company for any
corporate purpose, and the Company shall not be obligated to segregate such Contributions. 


    18. Reports. Individual accounts will be maintained for each participant in the Plan. Statements of account will be
given to participating Employees at least annually, which statements will set forth the
amounts of Contributions, the per Share Purchase Price, the number of Shares purchased and the remaining cash balance, if any. 


    19. Adjustments Upon Changes in Capitalization; Corporate Transactions.


    (a) Adjustment. Subject to any required action by the stockholders of the Company, the number of Shares covered by each
option under the Plan which has not yet been exercised and the number of Shares which have been authorized for issuance under the Plan but have not yet been placed under option (collectively, the
"Reserves"), as well as the maximum number of shares of Common Stock which may be purchased by a participant in a Purchase Period, the number of shares
of Common Stock set forth in Section 13(a) above, and the price per Share of Common Stock covered by each option under the Plan which has not yet been exercised, shall be proportionately
adjusted for any increase or 


7







decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock (including any such change in the number
of Shares of Common Stock effected in connection with a change in domicile of the Company), or any other increase or decrease in the number of Shares effected without receipt of consideration by the
Company; provided however that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an option. 


    (b) Corporate Transactions. In the event of a dissolution or liquidation of the Company, any Purchase Period and
Offering Period then in progress will terminate immediately prior to the consummation of such action, unless otherwise provided by the Board. In the event of a Corporate Transaction, each option
outstanding under the Plan shall be assumed or an equivalent option shall be substituted by the successor corporation or a parent or Subsidiary of such successor corporation. In the event that the
successor corporation refuses to assume or substitute for outstanding options, each Purchase Period and Offering Period then in progress shall be shortened and a new Purchase Date shall be set (the
"New Purchase Date"), as of which date any Purchase Period and Offering Period then in progress will terminate. The New Purchase Date shall be on or
before the date of consummation of the transaction and the Board shall notify each participant in writing, at least ten (10) days prior to the New Purchase Date, that the Purchase Date for his
or her option has been changed to the New Purchase Date and that his or her option will be exercised automatically on the New Purchase Date, unless prior to such date he or she has withdrawn from the
Offering Period as provided in Section 10. For purposes of this Section 19, an option granted under the Plan shall be deemed to be assumed, without limitation, if, at
the time of issuance of the stock or other consideration upon a Corporate Transaction, each holder of an option under the Plan would be entitled to receive upon exercise of the option the same number
and kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been,
immediately prior to the transaction, the holder of the number of Shares of Common Stock covered by the option at such time (after giving effect to any adjustments in the number of Shares covered by
the option as provided for in this Section 19); provided however that if the consideration received in the transaction is not solely common stock of the successor corporation or its parent (as
defined in Section 424(e) of the Code), the Board may, with the consent of the successor corporation, provide for the consideration to be received upon exercise of the option to be solely
common stock of the successor corporation or its parent equal in Fair Market Value to the per Share consideration received by holders of Common Stock in the transaction. 


    The
Board may, if it so determines in the exercise of its sole discretion, also make provision for adjusting the Reserves, as well as the price per Share of Common Stock covered by
each outstanding option, in the event that the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of Shares of its outstanding Common
Stock, and in the event of the Company's being consolidated with or merged into any other corporation. 


    20. Amendment or Termination.


    (a) The
Board may at any time and for any reason terminate or amend the Plan. Except as provided in Section 19, no such termination of the Plan may affect
options previously granted, provided that the Plan or an Offering Period may be terminated by the Board on a Purchase Date or by the Board's setting a new Purchase Date with respect to an Offering
Period and Purchase Period then in progress if the Board determines that termination of the Plan and/or the Offering Period is in the best interests of the Company and the stockholders or if
continuation of the Plan and/or the Offering Period would cause the Company to incur adverse accounting charges as a result of a change after the 


8







effective date of the Plan in the generally accepted accounting rules applicable to the Plan. Except as provided in Section 19 and in this Section 20, no amendment to the Plan shall make
any change in any option previously granted which adversely affects the rights of any participant. In addition, to the extent necessary to comply with Rule 16b-3 under the Exchange
Act, or under Section 423 of the Code (or any successor rule or provision or any applicable law or regulation), the Company shall obtain stockholder approval in such a manner and to such a
degree as so required. 


    (b) Without
stockholder consent and without regard to whether any participant rights may be considered to have been adversely affected, the Board (or its committee)
shall be entitled to change the Offering Periods and Purchase Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the
Company's processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward
the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant's Compensation, and establish such other limitations or procedures as the Board (or its
committee) determines in its sole discretion advisable which are consistent with the Plan. 


    21. Notices. All notices or other communications by a participant to the Company under or in connection with the Plan
shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof. 



    22. Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an option unless the exercise of such
option and the issuance and delivery of such Shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933,
as amended, the Exchange Act, the rules and regulations promulgated thereunder, applicable state securities laws and the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with respect to such compliance. 


    As
a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law. 


    23. Term of Plan; Effective Date. The Plan shall become effective upon the IPO Date. It shall continue in effect for a
term of ten (10) years unless sooner terminated under Section 20. 


9








QuickLinks


SEATTLE GENETICS, INC. 2000 EMPLOYEE STOCK PURCHASE PLAN