Document:

Filed by Bowne Pure Compliance

Exhibit 10.1

APPLIED DIGITAL SOLUTIONS, INC.

2003 FLEXIBLE STOCK PLAN

(as Amended and Restated through June 20, 2008)

 

 

 

APPLIED DIGITAL SOLUTIONS, INC.

2003 FLEXIBLE STOCK PLAN

(as Amended and Restated through June 20, 2008)

TABLE OF CONTENTS

	 	 	 	 	 
	1. NAME AND PURPOSE
	 	 	B-2	 
	 
	 	 	 	 
	1.1 Name
	 	 	B-2	 
	1.2 Purpose
	 	 	B-2	 
	 
	 	 	 	 
	2. DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION
	 	 	B-2	 
	 
	 	 	 	 
	2.1 General Definitions
	 	 	B-2	 
	2.1.1 Affiliate
	 	 	B-2	 
	2.1.2 Agreement
	 	 	B-2	 
	2.1.3 Benefit
	 	 	B-2	 
	2.1.4 Board
	 	 	B-2	 
	2.1.5 Cash Award
	 	 	B-2	 
	2.1.6 Change of Control
	 	 	B-2	 
	2.1.7 Code
	 	 	B-4	 
	2.1.8 Company
	 	 	B-4	 
	2.1.9 Committee
	 	 	B-4	 
	2.1.10 Common Stock
	 	 	B-4	 
	2.1.11 Effective Date
	 	 	B-4	 
	2.1.12 Employee
	 	 	B-4	 
	2.1.13 Employer
	 	 	B-4	 
	2.1.14 Exchange Act
	 	 	B-4	 
	2.1.15 Fair Market Value
	 	 	B-4	 
	2.1.16 Fiscal Year
	 	 	B-4	 
	2.1.17 ISO
	 	 	B-5	 
	2.1.18 NQSO
	 	 	B-5	 
	2.1.19 Option
	 	 	B-5	 
	2.1.20 Other Stock Based Award
	 	 	B-5	 
	2.1.21 Parent
	 	 	B-5	 
	2.1.22 Participant
	 	 	B-5	 
	2.1.23 Performance Based Compensation
	 	 	B-5	 
	2.1.24 Performance Share
	 	 	B-5	 
	2.1.25 Plan
	 	 	B-5	 
	2.1.26 Reload Option
	 	 	B-5	 
	2.1.27 Restricted Stock
	 	 	B-5	 
	2.1.28 Rule 16b-3
	 	 	B-6	 
	2.1.29 SEC
	 	 	B-6	 
	2.1.30 Share
	 	 	B-6	 
	2.1.31 SAR
	 	 	B-6	 
	2.1.32 Subsidiary
	 	 	B-6	 
	2.2 Other Definitions
	 	 	B-6	 
	2.3 Conflicts
	 	 	B-6	 
	 
	 	 	 	 
	3. COMMON STOCK
	 	 	B-6	 
	 
	 	 	 	 
	3.1 Number of Shares
	 	 	B-6	 
	3.2 Reusage
	 	 	B-6	 
	3.3 Adjustments
	 	 	B-7	 

 i 

 

 

 

	 	 	 	 	 
	4. ELIGIBILITY
	 	 	B-7	 
	 
	 	 	 	 
	4.1 Determined By Committee
	 	 	B-7	 
	 
	 	 	 	 
	5. ADMINISTRATION
	 	 	B-7	 
	 
	 	 	 	 
	5.1 Committee
	 	 	B-7	 
	5.2 Authority
	 	 	B-7	 
	5.3 Delegation
	 	 	B-8	 
	5.4 Determination
	 	 	B-8	 
	 
	 	 	 	 
	6. AMENDMENT
	 	 	B-8	 
	 
	 	 	 	 
	6.1 Power of Board
	 	 	B-8	 
	6.2 Limitation
	 	 	B-8	 
	 
	 	 	 	 
	7. TERM AND TERMINATION
	 	 	B-9	 
	 
	 	 	 	 
	7.1 Term
	 	 	B-9	 
	7.2 Termination
	 	 	B-9	 
	 
	 	 	 	 
	8. MODIFICATION OR TERMINATION OF BENEFITS
	 	 	B-9	 
	 
	 	 	 	 
	8.1 General
	 	 	B-9	 
	8.2 Committee’s Right
	 	 	B-9	 
	8.3 Compliance with Applicable Laws
	 	 	B-9	 
	 
	 	 	 	 
	9. CHANGE OF CONTROL
	 	 	B-9	 
	 
	 	 	 	 
	9.1 Vesting and Payment
	 	 	B-9	 
	9.2 Other Action
	 	 	B-10	 
	 
	 	 	 	 
	10. AGREEMENTS AND CERTAIN BENEFITS
	 	 	B-10	 
	 
	 	 	 	 
	10.1 Grant Evidenced by Agreement
	 	 	B-10	 
	10.2 Provisions of Agreement
	 	 	B-10	 
	10.3 Transferability
	 	 	B-10	 
	 
	 	 	 	 
	11. REPLACEMENT AND TANDEM AWARDS
	 	 	B-10	 
	 
	 	 	 	 
	11.1 Replacement
	 	 	B-10	 
	11.2 Tandem Awards
	 	 	B-10	 
	 
	 	 	 	 
	12. PAYMENT, DIVIDENDS AND WITHHOLDING
	 	 	B-11	 
	 
	 	 	 	 
	12.1 Payment
	 	 	B-11	 
	12.2 Dividend Equivalents
	 	 	B-11	 
	12.3 Withholding
	 	 	B-11	 
	 
	 	 	 	 
	13. OPTIONS
	 	 	B-11	 
	 
	 	 	 	 
	13.1 Types of Options
	 	 	B-11	 
	13.2 Grant of ISOs and Option Price
	 	 	B-11	 
	13.3 Other Requirements for ISOs
	 	 	B-12	 
	13.4 NQSOs
	 	 	B-12	 

ii

 

 

 

	 	 	 	 	 
	13.5 Determination by Committee
	 	 	B-12	 
	 
	 	 	 	 
	14. SARS
	 	 	B-12	 
	 
	 	 	 	 
	14.1 Grant and Payment
	 	 	B-12	 
	14.2 Grant of Tandem Award
	 	 	B-12	 
	14.3 ISO Tandem Award
	 	 	B-12	 
	14.4 Payment of Award
	 	 	B-12	 
	 
	 	 	 	 
	15. ANNUAL LIMITATIONS
	 	 	B-12	 
	 
	 	 	 	 
	15.1 Limitation on Options and SARs
	 	 	B-12	 
	15.2 Limitation on Performance Shares
	 	 	B-12	 
	15.3 Computations
	 	 	B-12	 
	 
	 	 	 	 
	16. RESTRICTED STOCK AND PERFORMANCE SHARES
	 	 	B-13	 
	 
	 	 	 	 
	16.1 Restricted Stock
	 	 	B-13	 
	16.2 Cost of Restricted Stock
	 	 	B-13	 
	16.3 Non-Transferability
	 	 	B-13	 
	16.4 Performance Shares
	 	 	B-13	 
	16.5 Grant
	 	 	B-13	 
	 
	 	 	 	 
	17. CASH AWARDS
	 	 	B-13	 
	 
	 	 	 	 
	17.1 Grant
	 	 	B-13	 
	17.2 Annual Limits
	 	 	B-14	 
	17.3 Restrictions
	 	 	B-14	 
	 
	 	 	 	 
	18. OTHER STOCK BASED AWARDS AND OTHER BENEFITS
	 	 	B-14	 
	 
	 	 	 	 
	18.1 Other Stock Based Awards
	 	 	B-14	 
	18.2 Other Benefits
	 	 	B-14	 
	 
	 	 	 	 
	19. MISCELLANEOUS PROVISIONS
	 	 	B-14	 
	 
	 	 	 	 
	19.1 Underscored References
	 	 	B-14	 
	19.2 Number and Gender
	 	 	B-14	 
	19.3 Unfunded Status of Plan
	 	 	B-14	 
	19.4 Termination of Employment
	 	 	B-15	 
	19.5 Designation of Beneficiary
	 	 	B-15	 
	19.6 Governing Law
	 	 	B-15	 
	19.7 Purchase for Investment
	 	 	B-15	 
	19.8 No Employment Contract
	 	 	B-15	 
	19.9 No Effect on Other Benefits
	 	 	B-15	 

iii

 

 

 

APPLIED DIGITAL SOLUTIONS, INC.

2003 FLEXIBLE STOCK PLAN

(as Amended and Restated through June 20, 2008)

1. NAME AND PURPOSE

1.1 Name.

The name of this Plan is the “Applied Digital Solutions, Inc. 2003 Flexible Stock Plan.”

1.2 Purpose.

The Company has established this Plan to attract, retain, motivate and reward Employees and
other individuals, to encourage ownership of the Company’s common stock by Employees and other
individuals, and to promote and further the best interests of the Company by granting cash and
other awards. The Company also intends in appropriate circumstances to grant awards of its common
stock in lieu of cash compensation pursuant to the mutual agreement of the Participant and the
Company.

2. DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION

2.1 General Definitions.

The following words and phrases, when used in the Plan, unless otherwise specifically defined
or unless the context clearly otherwise requires, shall have the following respective meanings:

2.1.1 Affiliate.

A Parent or Subsidiary of the Company.

2.1.2 Agreement.

The document which evidences the grant of any Benefit under the Plan and which sets forth the
Benefit and the terms, conditions and provisions of, and restrictions relating to, such Benefit.

2.1.3 Benefit.

Any benefit granted to a Participant under the Plan.

2.1.4 Board.

The Board of Directors of the Company.

2.1.5 Cash Award.

A Benefit payable in the form of cash.

2.1.6 Change of Control.

The occurrence of any of the following:

	 	A.	 	An acquisition of any common stock or other voting securities of the
Company entitled to vote generally for the election of directors (the
“Voting Securities”) by any “Person” or “Group” (as each such term is
used for purposes of Section 13(d) or 14(d) of the Exchange Act),
immediately after which such Person or Group, as the case may be, has
“Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of more than 20% of the then outstanding
 shares of common stock or the combined voting power of the Company’s
then outstanding Voting Securities; provided, however, that in
determining whether a Change of Control has occurred, shares of common
stock or Voting Securities that are acquired in a Non-Control
Acquisition (as defined below) shall not constitute an acquisition
which would cause a Change of Control. A “Non-Control Acquisition”
shall mean an acquisition by (i) the Company, (ii) any Subsidiary or
(ii) any employee benefit plan maintained by the Company or any
Subsidiary, including a trust forming part of any such plan (an
“Employee Benefit Plan”);

 

B-2

 

	 	B.	 	When, during any 2-year period, individuals who, at the beginning of
the 2-year period, constitute the Board (the “Incumbent Board”), cease
for any reason to constitute at least 50% of the members of the Board;
provided, however, that (i) if the election or nomination for election
by the Company’s shareholders of any new director was approved by a
vote of at least two-thirds of the Incumbent Board, such new director
shall, for purposes hereof, be deemed to be a member of the Incumbent
Board; and (ii) no individual shall be deemed to be a member of the
Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened “Election Contest” (as
described in Rule 14a-11 promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person or Group other than the Board (a “Proxy Contest”)
including by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest;
	 
	 	C.	 	The consummation of:

(i) a merger, consolidation or reorganization involving the Company or any Subsidiary, unless
the merger, consolidation or reorganization is a Non-Control Transaction. A “Non-Control
Transaction” shall mean a merger, consolidation or reorganization of the Company or any Subsidiary
where:

	 	(a)	 	the shareholders of the Company immediately prior to the merger,
consolidation or reorganization own, directly or indirectly,
immediately following such merger, consolidation or reorganization, at
least 50% of the combined voting power of the outstanding voting
securities of the corporation resulting from such merger,
consolidation or reorganization (the “Surviving Corporation”) in
substantially the same proportion as their ownership of the common
stock or Voting Securities, as the case may be, immediately prior to
the merger, consolidation or reorganization,
	 
	 	(b)	 	the individuals who were members of the Incumbent Board immediately
prior to the execution of the agreement providing for the merger,
consolidation or reorganization constitute at least two-thirds of the
members of the board of directors of the Surviving Corporation, or a
corporation beneficially owning, directly or indirectly, a majority of
the voting securities of the Surviving Corporation, and
	 
	 	(c)	 	no Person or Group, other than (1) the Company, (2) any Subsidiary,
(3) any Employee Benefit Plan or (4) any other Person or Group who,
immediately prior to the merger, consolidation or reorganization, had
Beneficial Ownership of not less than 20% of the then outstanding
Voting Securities or common stock, has Beneficial Ownership of 20% or
more of the combined voting power of the Surviving Corporation’s then
outstanding voting securities or common stock;
	 
	 	(d)	 	A complete liquidation or dissolution of the Company; or
	 
	 	(e)	 	The sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a
Subsidiary).

 

B-3

 

Notwithstanding the foregoing, a Change of Control shall not be deemed to have occurred solely
because any Person or Group (the “Subject Person”) acquired Beneficial Ownership of more than the
permitted amount of the then outstanding Voting Securities or common stock of the Company as a
result of an acquisition of Voting Securities or common stock by the Company which, by reducing the
number of shares of Voting Securities or common stock then outstanding, increases the proportional
number of shares beneficially owned by the Subject Person; provided, however, that if a Change of
Control would have occurred (but for the operation of this sentence) as a result of the acquisition
of Voting Securities or common stock by the Company, and after such acquisition by the Company, the
Subject Person becomes the beneficial owner of any additional shares of Voting Securities or common
stock, which increases the percentage of the then outstanding shares of Voting Securities or common
stock beneficially owned by the Subject Person, then a Change of Control shall be deemed to have
occurred.

2.1.7 Code.

The Internal Revenue Code of 1986, as amended. Any reference to the Code includes the
regulations promulgated pursuant to the Code.

2.1.8 Company.

Applied Digital Solutions, Inc.

2.1.9 Committee.

The Committee described in Section 5.1.

2.1.10 Common Stock.

The Company’s common stock, which presently has a par value of $.01 per Share.

2.1.11 Effective Date.

The date that the amended and restated Plan is approved by the shareholders of the Company
which must occur within one year before or after approval by the Board. Any grants of Benefits
prior to the approval by the shareholders of the Company shall be void if such approval is not
obtained.

2.1.12 Employee.

Any person employed by the Employer.

2.1.13 Employer.

The Company and all Affiliates.

2.1.14 Exchange Act.

The Securities Exchange Act of 1934, as amended.

2.1.15 Fair Market Value.

The closing price of Shares on the Nasdaq National Market on a given date, or, in the absence
of sales on a given date, the closing price on the Nasdaq National Market on the last day on which
a sale occurred prior to such date.

2.1.16 Fiscal Year.

The taxable year of the Company which is the calendar year.

 

B-4

 

2.1.17 ISO.

An Incentive Stock Option as defined in Section 422 of the Code.

2.1.18 NQSO.

A non-qualified stock Option, which is an Option that does not qualify as an ISO.

2.1.19 Option.

An option to purchase Shares granted under the Plan.

2.1.20 Other Stock Based Award.

An award under Section 3.1 that is valued in whole or in part by reference to, or otherwise
based on, common stock.

2.1.21 Parent.

Any corporation (other than the Company or a Subsidiary) in an unbroken chain of corporations
ending with the Company, if, at the time of the grant of an Option or other Benefit, each of the
corporations (other than the Company) owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such chain.

2.1.22 Participant.

An individual who is granted a Benefit under the Plan. Benefits may be granted only to
Employees, members of the Board, (including former Employees and former members of the Board if in
connection with their separation from the Company), employees and owners of entities which are not
Affiliates but which have a direct or indirect ownership interest in an Employer or in which an
Employer has a direct or indirect ownership interest, individuals who, and employees and owners of
entities which, are customers and suppliers of an Employer, individuals who, and employees and
owners of entities which, render services to an Employer, and individuals who, and employees and
owners of entities, which have ownership or business affiliations with any individual or entity
previously described.

2.1.23 Performance Based Compensation.

Compensation which meets the requirements of Section 162(m)(4)(C) of the Code.

2.1.24 Performance Share.

A Share awarded to a Participant under Section 16.4 of the Plan.

2.1.25 Plan.

The Applied Digital Solutions, Inc. 2003 Flexible Stock Plan and all amendments and
supplements to it.

2.1.26 Reload Option.

An Option to purchase the number of Shares used by a Participant to exercise an Option and to
satisfy any withholding requirement incident to the exercise of such Option.

2.1.27 Restricted Stock.

Shares issued under Section 16.1 of the Plan.

 

B-5

 

2.1.28 Rule 16b-3.

Rule 16b-3 promulgated by the SEC, as amended, or any successor rule in effect from time to
time.

2.1.29 SEC.

The Securities and Exchange Commission.

2.1.30 Share.

A share of common stock.

2.1.31 SAR.

A stock appreciation right, which is the right to receive an amount equal to the appreciation,
if any, in the Fair Market Value of a Share from the date of the grant of the right to the date of
its payment.

2.1.32 Subsidiary.

Any corporation, other than the Company, in an unbroken chain of corporations beginning with
the Company if, at the time of grant of an Option or other Benefit, each of the corporations, other
than the last corporation in the unbroken chain, owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations in such chain.

2.2 Other Definitions.

In addition to the above definitions, certain words and phrases used in the Plan and any
Agreement may be defined in other portions of the Plan or in such Agreement.

2.3 Conflicts.

In the case of any conflict in the terms of the Plan relating to a Benefit, the provisions in
the section of the Plan which specifically grants such Benefit shall control those in a different
section. In the case of any conflict between the terms of the Plan relating to a Benefit and the
terms of an Agreement relating to a Benefit, the terms of the Plan shall control.

3. COMMON STOCK

3.1 Number of Shares.

The number of Shares which may be issued or sold or for which Options, SARs or Performance
Shares may be granted under the Plan shall be 7,000,000 Shares. Such Shares may be authorized but
unissued Shares, Shares held in the treasury, or both. The full number of Shares available may be
used for any type of Option or other Benefit; provided, however, that the number of Shares that may
be issued under ISOs shall not exceed 1,300,000.

3.2 Reusage.

If an Option or SAR expires or is terminated, surrendered, or canceled without having been
fully exercised, if Restricted Shares or Performance Shares are forfeited, or if any other grant
results in any Shares not being issued, the Shares covered by such Option or SAR, grant of
Restricted Shares, Performance Shares or other grant, as the case may be, shall again be available
for use under the Plan. Any Shares which are used as full or partial payment to the Company upon
exercise of an Option or for any other Benefit that requires a payment to the Company shall be
available for purposes of the Plan.

 

B-6

 

3.3 Adjustments.

If there is any change in the common stock of the Company by reason of any stock dividend,
spin-off, split-up, spin-out, recapitalization, merger, consolidation, reorganization, combination
or exchange of shares, or otherwise, the number of SARs and number and class of shares available
for Options and grants of Restricted Stock, Performance Shares and Other Stock Based Awards and the
number of Shares subject to outstanding Options, SARs, grants of Restricted Stock which are not
vested, grants of Performance Shares which are not vested, and Other Stock Based Awards, and the
price thereof, as applicable, may be appropriately adjusted by the Committee.

4. ELIGIBILITY

4.1 Determined By Committee.

The Participants and the Benefits they receive under the Plan shall be determined solely by
the Committee. In making its determinations, the Committee shall consider past, present and
expected future contributions of Participants and potential Participants to the Employer,
including, without limitation, the performance of, or the refraining from the performance of,
services. Unless specifically provided otherwise herein, all determinations of the Committee in
connection with the Plan or an Agreement shall be made in its sole discretion.

5. ADMINISTRATION

5.1 Committee.

The Plan shall be administered by the Committee. The Committee shall consist of the “outside
directors” of the Board, unless the Board appoints a Committee of two or more but less than all of
the Board all of whom are “outside directors” as defined in Section 162(m) of the Code. The
Committee shall use its best efforts to grant Options, SARs, Restricted Stock, Performance Shares,
Cash Awards and Other Stock Based Awards under this Plan to an Employee which will qualify as
“performance-based compensation” for purposes of Section 162(m) of the Code, except where the
Committee deems that the Company’s interests when viewed broadly will be better served by a grant
which is free of the conditions required to so qualify any such grant for purposes of Section
162(m) of the Code.

If the Committee does not include the entire outside directors of the Board, it shall serve at
the pleasure of the outside directors of the Board, which may from time to time appoint members in
substitution for members previously appointed and fill vacancies, however caused, in the Committee.
The Committee may select one of its members as its Chairman and shall hold its meetings at such
times and places as it may determine. A majority of its members shall constitute a quorum. All
determinations of the Committee made at a meeting at which a quorum is present shall be made by a
majority of its members present at the meeting. Any decision or determination reduced to writing
and signed by a majority of the members shall be fully as effective as if it had been made by a
majority vote at a meeting duly called and held.

5.2 Authority.

Subject to the terms of the Plan, the Committee shall have discretionary authority to:

(a) determine the individuals to whom Benefits are granted, the type and amounts of Benefits
to be granted and the date of issuance and duration of all such grants;

(b) determine the terms, conditions and provisions of, and restrictions relating to, each
Benefit granted;

(c) interpret and construe the Plan and all Agreements;

(d) prescribe, amend and rescind rules and regulations relating to the Plan;

 

B-7

 

(e) determine the content and form of all Agreements;

(f) determine all questions relating to Benefits under the Plan;

(g) maintain accounts, records and ledgers relating to Benefits;

(h) maintain records concerning its decisions and proceedings;

(i) employ agents, attorneys, accountants or other persons for such purposes as the Committee
considers necessary or desirable;

(j) take, at any time, any action described in Section 9.1 or permitted by Section 9.2(a),
irrespective of whether any Change of Control has occurred or is imminent;

(k) determine, except to the extent otherwise provided in the Plan, whether and the extent to
which Benefits under the Plan will be structured to conform to the requirements applicable to
Performance-Based Compensation, and to take such action, establish such procedures, and impose such
restrictions at the time such Benefits are granted as the Committee determines to be necessary or
appropriate to conform to such requirements; and

(l) do and perform all acts which it may deem necessary or appropriate for the administration
of the Plan and carry out the purposes of the Plan.

5.3 Delegation.

Except as required by Rule 16b-3 with respect to grants of Options, Stock Appreciation Awards,
Performance Shares, Other Stock Based Awards, or other Benefits to individuals who are subject to
Section 16b-3 of the Exchange Act or as otherwise required for compliance with Rule 16b-3 or other
applicable law, the Committee may delegate all or any part of its authority under the Plan to any
Employee, Employees or committee.

5.4 Determination.

All determinations of the Committee shall be final and binding on all persons.

6. AMENDMENT

6.1 Power of Board.

Except as hereinafter provided, the Board shall have the sole right and power to amend the
Plan at any time and from time to time.

6.2 Limitation.

The Board may not amend the Plan, without approval of the shareholders of the Company:

(a) in a manner which would cause Options which are intended to qualify as ISOs to fail to
qualify;

(b) in a manner which would cause the Plan to fail to meet the requirements of Rule 16b-3; or

(c) in a manner which would violate applicable law.

 

B-8

 

7. TERM AND TERMINATION

7.1 Term.

The Plan shall commence as of the Effective Date and, subject to the terms of the Plan,
including those requiring approval by the shareholders of the Company and those limiting the period
over which ISOs or any other Benefits may be granted, shall continue in full force and effect until
terminated.

7.2 Termination.

The Plan may be terminated at any time by the Board.

8. MODIFICATION OR TERMINATION OF BENEFITS

8.1 General.

Subject to the provisions of Section 8.2, the amendment or termination of the Plan shall not
adversely affect a Participant’s right to any Benefit granted prior to such amendment or
termination.

8.2 Committee’s Right.

Any Benefit granted may be converted, modified, forfeited or canceled, in whole or in part, by
the Committee if and to the extent permitted in the Plan or applicable Agreement or with the
consent of the Participant to whom such Benefit was granted. Except as may be provided in an
Agreement, the Committee may, in its sole discretion, in whole or in part, waive any restrictions
or conditions applicable to, or accelerate the vesting of, any Benefit.

8.3 Compliance with Applicable Laws.

The Plan shall be administered and interpreted in accordance with applicable federal tax laws,
including Section 409A of the Code, and the regulations promulgated thereunder.

9. CHANGE OF CONTROL

9.1 Vesting and Payment.

In the event of a Change of Control:

(a) provide for the purchase of any Benefit for an amount of cash equal to the amount which
could have been attained upon the exercise or realization of such Benefit;

(b) all outstanding SARs shall become immediately payable, except to the extent that the right
to exercise the SAR is subject to restrictions established in connection with an Option that is
issued in tandem with the SAR;

(c) all Shares of Restricted Stock shall become fully vested;

(d) all Performance Shares shall be deemed to be fully earned and shall be paid out in such
manner as determined by the Committee; and

(e) all Cash Awards, Other Stock Based Awards and other Benefits shall become fully vested
and/or earned and paid out in such manner as determined by the Committee.

 

B-9

 

9.2 Other Action.

In the event of a Change of Control, the Committee, in its sole discretion, may, in addition
to the provisions of Section 9.1 above and to the extent not inconsistent therewith:

(a) provide for the purchase of any Benefit for an amount of cash equal to the amount which
could have been attained upon the exercise or realization of such Benefit;

(b) make such adjustment to the Benefits then outstanding as the Committee deems appropriate
to reflect such transaction or change; and/or

(c) cause the Benefits then outstanding to be assumed, or new Benefits substituted therefor,
by the surviving corporation in such change.

10. AGREEMENTS AND CERTAIN BENEFITS

10.1 Grant Evidenced by Agreement.

The grant of any Benefit under the Plan may be evidenced by an Agreement which shall describe
the specific Benefit granted and the terms and conditions of the Benefit. The granting of any
Benefit shall be subject to, and conditioned upon, the recipient’s execution of any Agreement
required by the Committee. Except as otherwise provided in an Agreement, all capitalized terms used
in the Agreement shall have the same meaning as in the Plan, and the Agreement shall be subject to
all of the terms of the Plan.

10.2 Provisions of Agreement.

Each Agreement shall contain such provisions that the Committee shall determine to be
necessary, desirable and appropriate for the Benefit granted which may include, but not necessarily
be limited to, the following with respect to any Benefit: description of the type of Benefit; the
Benefit’s duration; its transferability; if an Option, the exercise price, the exercise period and
the person or persons who may exercise the Option; the effect upon such Benefit of the
Participant’s death, disability, changes of duties or termination of employment; the Benefit’s
conditions; when, if, and how any Benefit may be forfeited, converted into another Benefit,
modified, exchanged for another Benefit, or replaced; and the restrictions on any Shares purchased
or granted under the Plan.

10.3 Transferability.

Unless otherwise specified in an Agreement or permitted by the Committee, each Benefit granted
shall be not transferable other than by will or the laws of descent and distribution and shall be
exercisable during a Participant’s lifetime only by him.

11. REPLACEMENT AND TANDEM AWARDS

11.1 Replacement.

The Committee may permit a Participant to elect to surrender a Benefit in exchange for a new
Benefit.

11.2 Tandem Awards.

Awards may be granted by the Committee in tandem. However, no Benefit may be granted in tandem
with an ISO except SARs.

 

B-10

 

12. PAYMENT, DIVIDENDS AND WITHHOLDING

12.1 Payment.

Upon the exercise of an Option or in the case of any other Benefit that requires a payment by
a Participant to the Company, the amount due the Company is to be paid:

(a) in cash;

(b) by the surrender of all or part of a Benefit (including the Benefit being exercised)
including by means of a so-called “cashless exercise” of an option;

(c) by the tender to the Company of Shares owned by the optionee and registered in his name
having a Fair Market Value equal to the amount due to the Company;

(d) in other property, rights and credits deemed acceptable by the Committee, including the
Participant’s promissory note;

(e) by any combination of the payment methods specified in (a), (b), (c) and (d) above.

Notwithstanding, the foregoing, any method of payment other than (a) may be used only with the
consent of the Committee or if and to the extent so provided in an Agreement. The proceeds of the
sale of Shares purchased pursuant to an Option and any payment to the Company for other Benefits
shall be added to the general funds of the Company or to the Shares held in treasury, as the case
may be, and used for the corporate purposes of the Company as the Board shall determine.

12.2 Dividend Equivalents.

Grants of Benefits in Shares or Share equivalents may include dividend equivalent payments or
dividend credit rights.

12.3 Withholding.

The Company may, at the time any distribution is made under the Plan, whether in cash or in
Shares, or at the time any Option is exercised, withhold from such distribution or Shares issuable
upon the exercise of an Option, any amount necessary to satisfy federal, state and local income
and/or other tax withholding requirements with respect to such distribution or exercise of such
Options. The Committee or the Company may require a participant to tender to the Company cash
and/or Shares in the amount necessary to comply with any such withholding requirements.

13. OPTIONS

13.1 Types of Options.

It is intended that both ISOs and NQSOs, which may be Reload Options, may be granted by the
Committee under the Plan.

13.2 Grant of ISOs and Option Price.

Each ISO must be granted to an Employee and granted within ten years from the earlier of the
date of adoption by the Board or the Effective Date. The purchase price for Shares under any ISO
shall be no less than the Fair Market Value of the Shares at the time the Option is granted.

 

B-11

 

13.3 Other Requirements for ISOs.

The terms of each Option which is intended to qualify as an ISO shall meet all requirements of
Section 422 of the Code.

13.4 NQSOs.

The terms of each NQSO shall provide that such Option will not be treated as an ISO. The
purchase price for Shares under any NQSO shall be no less than 100% of the Fair Market Value of the
Shares at the time the Option is granted.

13.5 Determination by Committee.

Except as otherwise provided in Section 13.1 through Section 13.4, the terms of all Options
shall be determined by the Committee.

14. SARS

14.1 Grant and Payment.

The Committee may grant SARs. Upon electing to receive payment of a SAR, a Participant shall
receive payment in Shares.

14.2 Grant of Tandem Award.

The Committee may grant SARs in tandem with an Option, in which case: the exercise of the
Option shall cause a correlative reduction in SARs standing to a Participant’s credit which were
granted in tandem with the Option; and the payment of SARs shall cause a correlative reduction of
the Shares under such Option.

14.3 ISO Tandem Award.

When SARs are granted in tandem with an ISO, the SARs shall have such terms and conditions as
shall be required for the ISO to qualify as an ISO.

14.4 Payment of Award.

SARs shall be paid by the Company to a Participant, to the extent payment is elected by the
Participant (and is otherwise due and payable), as soon as practicable after the date on which such
election is made.

15. ANNUAL LIMITATIONS

15.1 Limitation on Options and SARs.

The number of (a) Shares covered by Options where the purchase price is no less than the Fair
Market Value of the Shares on the date of grant plus (b) SARs which may be granted to any
Participant in any Fiscal Year shall not exceed 1,000,000.

15.2 Limitation on Performance Shares

The number of Shares covered by Performance Shares in any Fiscal Year shall not exceed
500,000.

15.3 Computations.

For purposes of Section 15.1: Shares covered by an Option that is canceled shall count against
the maximum, and, if the exercise price under an Option is reduced, the transaction shall be
treated as a cancellation of the Option and a grant of a new Option; and SARs covered by a grant of
SARs that is canceled shall count against the maximum, and, if the Fair Market Value of a Share on
which the appreciation under a grant of SARs will be calculated is reduced, the transaction will be
treated as a cancellation of the SARs and the grant of a new grant of SARs.

 

B-12

 

16. RESTRICTED STOCK AND PERFORMANCE SHARES

16.1 Restricted Stock.

The Committee may grant Benefits in Shares available under Section 3.1 of the Plan as
Restricted Stock. Shares of Restricted Stock shall be issued and delivered at the time of the grant
or as otherwise determined by the Committee, but shall be subject to forfeiture until provided
otherwise in the applicable Agreement or the Plan. Each certificate representing Shares of
Restricted Stock shall bear a legend referring to the Plan and the risk of forfeiture of the Shares
and stating that such Shares are nontransferable until all restrictions have been satisfied and the
legend has been removed. At the discretion of the Committee, the grantee may or may not be entitled
to full voting and dividend rights with respect to all shares of Restricted Stock from the date of
grant.

16.2 Cost of Restricted Stock.

Unless otherwise determined by the Committee, grants of Shares of Restricted Stock shall be
made at a per Share cost to the Participant equal to par value.

16.3 Non-Transferability.

Shares of Restricted Stock shall not be transferable until after the removal of the legend
with respect to such Shares.

16.4 Performance Shares.

Performance Shares are the right of an individual to whom a grant of such Shares is made to
receive Shares or cash equal to the Fair Market Value of such Shares at a future date in accordance
with the terms and conditions of such grant. The terms and conditions shall be determined by the
Committee, in its sole discretion, but generally are expected to be based substantially upon the
attainment of targeted profit and/or performance objectives. The Committee shall determine the
performance targets which will be applied with respect to each grant of Performance Shares at the
time of grant, but in no event later than 90 days after the beginning of the period of service to
which the performance targets relate. The performance criteria applicable to Performance Shares
will be one or more of the following: (1) stock price; (2) average annual growth in earnings per
share; (3) increase in shareholder value; (4) earnings per share; (5) net income; (6) return on
assets; (7) return on shareholders’ equity; (8) increase in cash flow; (9) operating profit or
operating margins; (10) revenue growth of the Company; and (11) operating expenses. Each
performance target applicable to a Performance Share award and the deadline for satisfying each
such target shall be stated in the Agreement between the Company and the Employee. The Committee
must certify in writing that each such target has been satisfied before the Performance Shares
award becomes effective.

16.5 Grant.

The Committee may grant an award of Performance Shares. The number of Performance Shares and
the terms and conditions of the grant shall be set forth in the applicable Agreement.

17. CASH AWARDS

17.1 Grant.

The Committee may grant Cash Awards at such times and (subject to Section 17.2) in such
amounts as it deems appropriate.

 

B-13

 

17.2 Annual Limits.

The amount of any Cash Award in any Fiscal Year to any Participant shall not exceed the
greater of $100,000 or 100% of his cash compensation (excluding any Cash Award under this Section
17.2) for such Fiscal Year.

17.3 Restrictions.

Cash Awards may be subject or not subject to conditions (such as an investment requirement),
restricted or nonrestricted, vested or subject to forfeiture and may be payable currently or in the
future or both. The Committee may make grants of Cash Awards that are intended to be Performance
Based Compensation and grants of Cash Awards that are not intended to be Performance Based
Compensation.

The Committee shall determine the performance targets which will be applied with respect to
each grant of Cash Awards that are intended to be Performance Based Compensation at the time of
grant, but in no event later than 90 days after the beginning of the period of service to which the
performance targets relate. The performance criteria applicable to Performance Based Compensation
awards will be one or more of the following: (1) stock price; (2) average annual growth in earnings
per share; (3) increase in shareholder value; (4) earnings per share; (5) net income; (6) return on
assets; (7) return on shareholders’ equity; (8) increase in cash flow; (9) operating profit or
operating margins; (10) revenue growth of the Company; and (11) operating expenses. Each
performance target applicable to a Cash Award intended to be Performance Based Compensation and the
deadline for satisfying each such target shall be stated in the Agreement between the Company and
the Employee. The Committee must certify in writing that each such target has been satisfied before
the Performance Based Compensation award is paid.

18. OTHER STOCK BASED AWARDS AND OTHER BENEFITS

18.1 Other Stock Based Awards.

The Committee shall have the right to grant Other Stock Based Awards which may include,
without limitation, the grant of Shares based on certain conditions, the payment of cash based on
the performance of the common stock, the grant of securities convertible into Shares, and the grant
of Shares in lieu of the payment of cash compensation pursuant to the mutual agreement of the
Participant and the Company.

18.2 Other Benefits.

The Committee shall have the right to provide types of Benefits under the Plan in addition to
those specifically listed, if the Committee believes that such Benefits would further the purposes
for which the Plan was established.

19. MISCELLANEOUS PROVISIONS

19.1 Underscored References.

The underscored references contained in the Plan are included only for convenience, and they
shall not be construed as a part of the Plan or in any respect affecting or modifying its
provisions.

19.2 Number and Gender.

The masculine and neuter, wherever used in the Plan, shall refer to either the masculine,
neuter or feminine; and, unless the context otherwise requires, the singular shall include the
plural and the plural the singular.

19.3 Unfunded Status of Plan.

The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation.
With respect to any payments or deliveries of Shares not yet made to a Participant by the Company,
nothing contained herein shall give any rights that are greater than those of a general creditor of
the Company. The Committee may authorize the creation of trusts or other arrangements to meet the
obligations created under the Plan to deliver Shares or payments hereunder consistent with the
foregoing.

 

B-14

 

19.4 Termination of Employment.

If the employment of a Participant by the Company terminates for any reason, except as
otherwise provided in an Agreement, all unexercised, deferred, and unpaid Benefits may be
exercisable or paid only in accordance with rules established by the Committee. These rules may
provide, as the Committee may deem appropriate, for the expiration, forfeiture, continuation, or
acceleration of the vesting of all or part of the Benefits.

19.5 Designation of Beneficiary.

A Participant may file with the Committee a written designation of a beneficiary or
beneficiaries (subject to such limitations as to the classes and number of beneficiaries and
contingent beneficiaries as the Committee may from time to time prescribe) to exercise, in the
event of the death of the Participant, an Option, or to receive, in such event, any Benefits. The
Committee reserves the right to review and approve beneficiary designations. A Participant may from
time to time revoke or change any such designation of beneficiary and any designation of
beneficiary under the Plan shall be controlling over any other disposition, testamentary or
otherwise; provided, however, that if the Committee shall be in doubt as to the right of any such
beneficiary to exercise any Option or to receive any Benefit, the Committee may determine to
recognize only an exercise by the legal representative of the recipient, in which case the Company,
the Committee and the members thereof shall not be under any further liability to anyone.

19.6 Governing Law.

This Plan shall be construed and administered in accordance with the laws of the State of
Missouri.

19.7 Purchase for Investment.

The Committee may require each person purchasing Shares pursuant to an Option or other award
under the Plan to represent to and agree with the Company in writing that such person is acquiring
the Shares for investment and without a view to distribution or resale. The certificates for such
Shares may include any legend which the Committee deems appropriate to reflect any restrictions on
transfer. All certificates for Shares delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Committee may deem advisable under all
applicable laws, rules and regulations, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate references to such restrictions.

19.8 No Employment Contract.

Neither the adoption of the Plan nor any Benefit granted hereunder shall confer upon any
Employee any right to continued employment nor shall the Plan or any Benefit interfere in any way
with the right of the Employer to terminate the employment of any of its Employees at any time.

19.9 No Effect on Other Benefits.

The receipt of Benefits under the Plan shall have no effect on any benefits to which a
Participant may be entitled from the Employer, under another plan or otherwise, or preclude a
Participant from receiving any such benefits.

 

B-15Filed by Bowne Pure Compliance

Exhibit 4.1

THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY OR ACQUIRABLE UPON EXERCISE HEREOF HAVE NOT
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED OR
TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION
UNDER SAID ACT IS NOT REQUIRED.

SPECTRUM PHARMACEUTICALS, INC.

WARRANT

			
	 	 	 
	Dated: April 28, 2008
	 	Number: SPPI 429

Spectrum Pharmaceuticals, Inc., a Delaware corporation (the “Company”), hereby certifies that,
for value received, John T. Moore or his registered assigns (“Holder”), is entitled, subject to the
terms set forth below, to purchase from the Company up to a total of 50,000 shares of Common Stock,
$.001 par value per share (the “Common Stock”), of the Company (each such share, a “Warrant Share”
and all such shares, the “Warrant Shares”) at an exercise price equal to $1.79 per share (as
adjusted from time to time as provided in Section 7, the “Exercise Price”), at any time from and
including April 28, 2008 (the “Effective Date”) through and including April 27, 2013 (the
“Expiration Date”), in accordance with the vesting schedule set forth in Section 3 (b), subject to
the following terms and conditions:

1. Registration of Warrant. The Company shall register this Warrant upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in the name of the record
Holder hereof from time to time. The Company may deem and treat the registered Holder of this
Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, and the Company shall not be affected by notice to the
contrary.

2. Registration of Transfers and Exchanges.

(a) This Warrant may not be sold, transferred, assigned, pledged, hypothecated or otherwise
disposed, directly or indirectly, in whole or in part, without the prior written consent of the
Company. Any attempted sale, transfer, assignment, pledge, hypothecation or other disposition of
this Warrant, or any portion thereof, shall be void and without any force or effect; provided,
however, that, subject to compliance with any applicable securities laws, the Holder may transfer
this Warrant, or any portion thereof, without the prior written consent of the Company, if such
transfer is to (i) a spouse, child, grandchild, parent, sibling or custodian or trustee for the
benefit of any such relatives, or (ii) any shareholder or affiliate entity.

(b) The Company shall register the transfer of any portion of this Warrant in conformance with
Section 2(a) in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at
the office specified in or pursuant to Section 10. Upon any such registration or transfer, a new
warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant,
a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred,
if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the
transferee thereof shall be deemed the acceptance of such transferee of all of the rights and
obligations of a holder of this Warrant.

 

1

 

(c) This Warrant is exchangeable, upon the surrender hereof by the Holder to the office of the
Company specified in or pursuant to Section 10 for one or more New Warrants, evidencing in the
aggregate the right to purchase the number of Warrant Shares which may then be purchased hereunder.

(d) Unless the resale of the Warrant Shares has been registered under the Securities Act of
1933, as amended, each certificate for Warrant Shares initially issued upon the exercise of this
Warrant, and each certificate for Warrant Shares issued to any subsequent transferee of any such
certificate, shall be stamped or otherwise imprinted with a legend in substantially the following
form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED, AND MAY NOT BE
OFFERED, SOLD, ASSIGNED OR TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION
UNDER SAID ACT IS NOT REQUIRED.”

3. Duration and Exercise of Warrant.

(a) This Warrant shall be exercisable by the then registered Holder on any business day before
5:00 P.M., California time, at any time and from time to time on or after the Effective Date to and
including the Expiration Date. At 5:00 P.M., California time on the Expiration Date, the portion of
this Warrant not exercised prior thereto shall be and become void and of no value.

(b) This Warrant shall vest in accordance with the following schedule:

	 	a.	 	Twenty-five (25%) percent of the shares
shall vest and become exercisable upon the Effective Date of the
warrant; and

	 
	 	b.	 	The remaining shares shall vest in
equal twenty-five (25%) percent increments every six months from
the Effective Date of the warrant thereafter.

	 
	 	 	 	In the event that the Consulting Agreement dated September 20, 2005,
as amended, by and between the Company and JTM Consulting, Inc.,
expires or is terminated by either party prior to any vesting date, no
further vesting will occur following such termination.

 

2

 

(c ) Upon surrender of this Warrant, with the Form of Election to Purchase attached hereto
duly completed and signed, to the Company at its address for notice set forth in Section 10 and
upon payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder
intends to purchase hereunder, in the manner provided hereunder, all as specified by the Holder in
the Form of Election to Purchase, the Company shall promptly (and in any event, within four
business days) issue or cause to be issued and cause to be delivered to or upon the written order
of the Holder and in such name or names as the Holder may designate, a certificate for the Warrant
Shares issuable upon such exercise. Any person so designated by the Holder to receive Warrant
Shares shall be deemed to have become holder of record of such Warrant Shares as of the Date of
Exercise of this Warrant.

A. “Date of Exercise” means the date on which the Company shall have received (i) this Warrant
(or any New Warrant, as applicable), with the Form of Election to Purchase attached hereto (or
attached to such New Warrant) appropriately completed and duly signed, and (ii) payment of the
Exercise Price for the number of Warrant Shares so indicated by the holder hereof to be purchased.

(c) This Warrant shall be exercisable, either in its entirety or, from time to time, for a
portion of the number of Warrant Shares. If less than all of the Warrant Shares which may be
purchased under this Warrant are exercised at any time, the Company shall issue or cause to be
issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of
Warrant Shares for which no exercise has been evidenced by this Warrant.

(d) Prior to the exercise of this Warrant, the Holder shall not be entitled to any rights as a
stockholder of the Company with respect to the Warrant Shares, including (without limitation) the
right to vote such shares, receive dividends or other distributions thereon or be notified of
stockholder meetings (except as otherwise set forth in Section 7(f) herein).

(e) If by the tenth business day after a Date of Exercise the Company fails to deliver the
required number of Warrant Shares in the manner required pursuant to Section 3(b), then the Holder
will have the right to rescind such exercise.

4. Payment of Taxes. The Company will pay any documentary stamp taxes attributable to the
issuance of Warrant Shares upon the exercise of this Warrant; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any transfer involved in
the registration of any certificates for Warrant Shares or Warrants in a name other than that of
the Holder. The Holder shall be responsible for all other tax liability that may arise as a result
of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

5. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and upon cancellation
hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or destruction and indemnity,
if requested, satisfactory to it. Applicants for a New Warrant under such circumstances shall also
comply with such other reasonable regulations and procedures and pay such other reasonable charges
as the Company may prescribe.

 

3

 

6. Reservation of Warrant Shares. The Company covenants that it will at all times reserve and
keep available out of the aggregate of its authorized but unissued Common Stock, solely for the
purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided,
the number of Warrant Shares which are then issuable and deliverable upon the exercise of this
entire Warrant, free from preemptive rights or any other actual contingent purchase rights of
persons other than the Holder. The Company covenants that all Warrant Shares that shall be so
issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in
accordance with the terms hereof, be duly authorized, validly issued and fully paid and
nonassessable.

7. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise
of this Warrant are subject to adjustment from time to time as set forth in this Section 7. Upon
each such adjustment of the Exercise Price pursuant to this Section 7, the Holder shall thereafter
prior to the Expiration Date be entitled to purchase, at the Exercise Price resulting from such
adjustment, the number of Warrant Shares obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares issuable upon exercise of this
Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment.

(a) If the Company, at any time while this Warrant is outstanding, (i) shall pay a stock
dividend (except scheduled dividends paid on outstanding preferred stock which contain a stated
dividend rate) or otherwise make a distribution or distributions on shares of its Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common Stock into a larger
number of shares, or (iii) combine outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event
and the denominator shall be the number of shares of Common Stock (excluding treasury shares, if
any) outstanding after such event. Any adjustment made pursuant to this Section shall become
effective immediately after the record date for the determination of stockholders entitled to
receive such dividend or distribution and shall become effective immediately after the effective
date in the case of a subdivision or combination, and shall apply to successive subdivisions and
combinations.

(b) In case of any reclassification of the Common Stock, any consolidation or merger of the
Company with or into another person, the sale or transfer of all or substantially all of the assets
of the Company or any compulsory share exchange pursuant to which the Common Stock is converted
into other securities, cash or property, then the Holder shall have the right thereafter to
exercise this Warrant only into the shares of stock and other
securities and property receivable upon or deemed to be held by holders of Common Stock following
such reclassification, consolidation, merger, sale, transfer or share exchange, and the Holder
shall be entitled upon such event to receive such amount of securities or property equal to the
amount of Warrant Shares such Holder would have been entitled to had such Holder exercised this
Warrant immediately prior to such reclassification, consolidation, merger, sale, transfer or share
exchange. The terms of any such consolidation, merger, sale, transfer or share exchange shall
include such terms so as to continue to give to the Holder the right to receive the securities or
property set forth in this Section 7(b) upon any exercise following any such reclassification,
consolidation, merger, sale, transfer or share exchange.

 

4

 

(c) If the Company, at any time while this Warrant is outstanding, shall distribute to all
holders of Common Stock (and not to holders of this Warrant) evidences of its indebtedness or
assets or rights or warrants to subscribe for or purchase any security (excluding those referred to
in Sections 7(a), and (b)), other than as part of its dissolution or liquidation or the winding up
of its affairs, then in each such case the Exercise Price shall be determined by multiplying the
Exercise Price in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the denominator shall be
the fair market value of a share of Common Stock determined as of the record date mentioned above,
and of which the numerator shall be the fair market value of a share of Common Stock determined as
of such record date less the fair market value at such record date of the portion of such assets or
evidence of indebtedness so distributed applicable to one outstanding share of Common Stock as
determined by the Company’s independent certified public accountants that regularly examines the
financial statements of the Company (an “Appraiser”).

(d) For the purposes of this Section 7, the following clauses shall also be applicable:

	 	(i)	 	Record Date. In case the Company
shall take a record of the holders of its Common Stock for the
purpose of entitling them (A) to receive a dividend or other
distribution payable in Common Stock or in securities
convertible or exchangeable into shares of Common Stock, or (B)
to subscribe for or purchase Common Stock or securities
convertible or exchangeable into shares of Common Stock, then
such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of
subscription or purchase, as the case may be.

	 
	 	(ii)	 	Treasury Shares. The number of
 shares of Common Stock outstanding at any given time shall not
include shares owned or held by or for the account of the
Company, and the disposition of any such shares shall be considered an
issue or sale of Common Stock.

 

5

 

(e) All calculations under this Section 7 shall be made to the nearest
cent or the nearest 1/100th of a share, as the case may be.

(f) If:

	 	(i)	 	the Company shall declare a
dividend (or any other distribution) on its Common Stock; or

	 
	 	(ii)	 	the Company shall declare a
special nonrecurring cash dividend on or a redemption of its
Common Stock; or

	 
	 	(iii)	 	the Company shall authorize the
granting to all holders of the Common Stock rights or warrants
to subscribe for or purchase any shares of capital stock of any
class or of any rights; or

	 
	 	(iv)	 	the approval of any stockholders
of the Company shall be required in connection with any
reclassification of the Common Stock of the Company, any
consolidation or merger to which the Company is a party, any
sale or transfer of all or substantially all of the assets of
the Company, or any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property; or

	 
	 	(v)	 	the Company shall authorize the
voluntary dissolution, liquidation or winding up of the affairs
of the Company,

then the Company shall cause to be mailed to each Holder at their last addresses as they shall
appear upon the Warrant Register, at least 30 calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a
record is not to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification, consolidation, merger,
sale, transfer, share exchange, dissolution, liquidation or winding up; provided, however, that the
failure to mail such notice or any defect therein or in the mailing thereof shall not affect the
validity of the corporate action required to be specified in such notice.

8. Payment of Exercise Price. The Holder shall pay the Exercise Price in immediately available
funds by certified check or bank draft payable to the order of the Company or by wire transfer to
an account designated by the Company.

 

6

 

9. Fractional Shares. The Company shall not be required to issue or cause to be issued
fractional Warrant Shares on the exercise of this Warrant. The number of full Warrant Shares which
shall be issuable upon the exercise of this Warrant shall be computed on the basis of the aggregate
number of Warrant Shares purchasable on exercise of this Warrant so presented. If any fraction of a
Warrant Share would, except for the provisions of this Section 9, be issuable on the exercise of
this Warrant, the Company shall pay an amount in cash equal to the Exercise Price multiplied by
such fraction.

10. Notices. Any and all notices or other communications or deliveries hereunder shall be in
writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile telephone number specified
in this Section prior to 5:00 p.m. (California time) on a business day, (ii) the business day after
the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section later than 5:00 p.m. (California time) on any
date and earlier than 11:59 p.m. (California time) on such date, (iii) the business day following
the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon
actual receipt by the party to whom such notice is required to be given. The addresses for such
communications shall be: (i) if to the Company, to 157 Technology Drive, Irvine, CA 92618,
Attention: CEO, or to facsimile no. (949) 788-6706, or (ii) if to the Holder, to the Holder at the
address or facsimile number appearing on the Warrant Register or such other address or facsimile
number as the Holder may provide to the Company in accordance with this Section 10.

11. Warrant Agent. The Company shall serve as warrant agent under this Warrant. The Company
may appoint a new warrant agent upon notice to the Holder in accordance with Section 10. Any
corporation into which the Company may be merged or any corporation resulting from any
consolidation to which the Company shall be a party or any corporation to which the Company
transfers substantially all of its corporate assets shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly cause notice of
its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder’s last address as shown on the Warrant Register.

12. Representations and Warranties of Holder. By accepting this Warrant, Holder represents
and warrants to the Company that the statements contained in this Section 12 are correct and
complete as of the date first written above.

(a) Business or Financial Expertise. Holder has either (i) a pre-existing personal or
business relationship with the Company or any of its officers, directors or controlling persons
that is of a nature and duration which enables Holder to be aware of the character, business acumen
and general business and financial circumstances of the Company or (ii) by reason of Holder’s
business or financial expertise or the business or financial experience of his
professional advisors who are unaffiliated with and who are not compensated by the Company or any
affiliate or selling agent of the Company, directly or indirectly, the capacity to protect his own
interests in connection with his acquisition of the Warrant and the underlying Warrant Shares.
Holder is an “accredited investor” as defined in Rule 501 of Regulation D of the Securities Act of
1933, as amended (the “Securities Act”).

 

7

 

(b) Awareness; No Distribution. Holder has had the opportunity to ask questions about the
Company’s business affairs and financial condition, and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the Warrant and underlying
Warrant Shares. Holder is acquiring the Warrant and underlying Warrant Shares for his own account
for investment purposes only and not with a view to, or for the resale in connection with, any
“distribution” thereof for purposes of the Securities Act. Holder recognizes that the Warrant and
underlying Warrant Shares are a speculative investment involving a high degree of risk of loss and
that Holder could lose the entire amount of its investment. Holder is able to bear the economic
risk of this investment and at the present time could afford a complete loss of this investment.

(c) No Registration. Holder understands that the Warrant and underlying Warrant Shares will
be issued without registration under the Securities Act and without qualification and/or
registration under applicable state securities laws (“Blue Sky Laws”) in reliance upon specific
exemptions therefrom, which exemptions depend upon, among other things, the bona fide nature of its
investment intent as expressed herein. In this connection, Holder understands that, in the view of
the SEC, the statutory basis for such exemption may be unavailable if its representations were
predicated solely upon a present intention to hold the Warrant and underlying Warrant Shares for
the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Warrant Shares, or for a period of one year or any
other fixed period in the future.

(d) Legend. Holder further understands that the Warrant Shares must be held indefinitely
unless subsequently registered and/or qualified under the Securities Act and under the Blue Sky
Laws or unless an exemption from registration and/or qualification is otherwise available.
Moreover, John Moore understands that the Company is under no obligation to register and/or qualify
the Warrant Shares. In addition, Holder understands that the certificate evidencing the Warrant
Shares will be imprinted with a legend in substantially the form as follows which prohibits the
transfer of the Warrant Shares unless they are registered and/or qualified or such registration
and/or qualification is not required in the opinion of counsel for Holder.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED OR
TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID
ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT REQUIRED.

(e) Rule 144. Holder is aware of the provisions of Rule 144, promulgated under the Securities
Act, which, in substance, permits limited public resale of “restricted securities” acquired,
directly or indirectly, from the issuer thereof (or from an affiliate of such issuer), in a
non-public offering subject to the satisfaction of certain conditions. Holder understands that the
Warrant Shares constitute “restricted securities” for the purposes of Rule 144.

 

8

 

(f) No Public Market. Holder further understands that at the time it wishes to sell the
Warrant Shares there may be no public market upon which to make such a sale.

(g) Risk. Holder further understands that in the event all of the requirements of Rule 144
are not satisfied, registration under the Securities Act, compliance with Regulation A, or some
other registration exemption will be required; and that, notwithstanding the fact that Rule 144 is
not exclusive, the Staff of the SEC has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and otherwise than pursuant to
Rule 144 will have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and their respective
brokers who participate in such transactions do so at their own risk.

13. Miscellaneous.

(a) This Warrant shall be binding on and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. This Warrant may be amended only in writing signed by
the Company and the Holder and their successors and assigns.

(b) Subject to Section 13(a), above, nothing in this Warrant shall be construed to give to any
person or corporation other than the Company and the Holder any legal or equitable right, remedy or
cause under this Warrant. This Warrant shall inure to the sole and exclusive benefit of the Company
and the Holder.

(c) This Warrant shall be governed by and construed and enforced in accordance with the
internal laws of the State of California without regard to the principles of conflicts of law
thereof. The Company and the Holder hereby irrevocably submit to the exclusive jurisdiction of the
state and federal courts sitting in Orange County, California, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, or that such
suit, action or proceeding is improper. Each of the Company and the Holder hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or
proceeding by receiving a copy thereof sent to it at the address in effect for notices to it under
this instrument and in the manner set forth in Section 10 above, and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law.

(d) The headings herein are for convenience only, do not constitute a part of this Warrant and
shall not be deemed to limit or affect any of the provisions hereof.

 

9

 

(e) In case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining terms and provisions
of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt
in good faith to agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision
in this Warrant.

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above.

	 	 	 	 	 
	 	SPECTRUM PHARMACEUTICALS, INC.

 	 
	 	By:  	     /S/ Rajesh C. Shrotriya, M.D.
 	 
	 	 	Name:  	Rajesh C. Shrotriya, M.D. 	 
	 	 	Title:  	Chief Executive Officer and President 	 
	 

 

10

 

FORM OF ELECTION TO PURCHASE

(To be executed by the Holder to exercise the right to purchase shares of Common

Stock under the foregoing Warrant)

To Spectrum Pharmaceuticals, Inc.:

In accordance with the Warrant enclosed with this Form of Election to Purchase, the
undersigned hereby irrevocably elects to purchase                      shares of Common Stock (“Common
Stock”), $.001 par value per share, of Spectrum Pharmaceuticals, Inc. (the “Company”) encloses
herewith $                     in cash, certified or official bank check or checks, which sum represents the
aggregate Exercise Price (as defined in the Warrant) for the number of shares of Common Stock to
which this Form of Election to Purchase relates, together with any applicable taxes payable by the
undersigned pursuant to the Warrant.

The undersigned requests that certificates for the shares of Common Stock issuable upon this
exercise be issued in the name of:

	 	 	 
	PLEASE INSERT SOCIAL SECURITY OR 

TAX IDENTIFICATION NUMBER:

	 	 
	 	 	 
	 
	 	 
	 
	 	 
	 
	(Please print name and address)

If the number of shares of Common Stock issuable upon this exercise shall not be all of the
shares of Common Stock which the undersigned is entitled to purchase in accordance with the
enclosed Warrant, the undersigned requests that a New Warrant (as defined in the Warrant)
evidencing the right to purchase the shares of Common Stock not issuable pursuant to the exercise
evidenced hereby be issued in the name of and delivered to:

	 	 	 
	 

	 	 
	 
	(Please print name and address)
	 	 

By signing below, the Holder represents and warrants to the Company that the statements
contained in Section 12 are true and correct as of the date hereof, as if given on the date hereof.

	 	 	 
	Dated:                     ,           

	 	Name of Holder:
	 
	 	 
	 

	 	(Print)
	 	 	 
	 

	 	(By:)
	 	 	 
	 

	 	(Name:)
	 	 	 
	 

	 	(Title:)
	 	 	 
	 

	 	(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)

 

11

 

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                         the right represented by the Warrant enclosed with this Form of Assignment to
purchase                      shares of Common Stock of Spectrum Pharmaceuticals, Inc. to which the Warrant
relates and appoints                                          attorney to transfer said right on the books of Spectrum
Pharmaceuticals, Inc. with full power of substitution in the premises.

	 	 	 
	Dated:                     ,           

	 	 
	 	 	 
	 

	 	(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
	 
	 	 
	 

	 	 
	 	 	 
	 

	 	Address of Transferee
	 
	 	 
	 

	 	 
	 	 	 
	 
	 	 
	 

	 	 
	 	 	 
	 
	 	 
	In the presence of:
	 	 
	 
	 	 
	 
	 	 
	 	 	 

 

12

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