Form of Deferred Stock Unit Notice and Deferred Stock Unit Agreement under the Iovance Biotherapeutics, Inc. 2018 Equity Incentive Plan

EX-10.2 3 iova-20220630xex10d2.htm EX-10.2

Exhibit 10.2






Name of Grantee:

This Notice evidences the award of Deferred Restricted Stock Units (each, a "DRSU," and collectively, the "DRSUs") of Iovance Biotherapeutics, Inc., a Delaware corporation (the "Company"), that have been granted to you pursuant to the Iovance Biotherapeutics, Inc. 2018 Equity Incentive Plan, as amended (the "Plan"), and conditioned upon your agreement to the terms of the attached Deferred Restricted Stock Unit Agreement (the "Agreement"). This Notice constitutes part of and is subject to the terms and provisions of the Agreement and the Plan, which are incorporated by reference herein. Each DRSU is equivalent in value to one share of the Company Stock and represents the Company's commitment to issue one share of Company Stock at a future date, subject to the terms of the Agreement and the Plan. The DRSUs are credited to a separate account maintained for you on the books and records of the Company (the "Account"). All amounts credited to the Account will continue for all purposes to be part of the general assets of the Company.

Grant Date:

Number of DRSUs:

Vesting Schedule: All of the DRSUs are nonvested and forfeitable as of the Grant Date. So long as your employment or service with the Company is continuous from the Grant Date through the applicable date upon which vesting is scheduled to occur:

Except as may otherwise be provided herein, the DRSUs mentioned in the Plan shall vest as to the earlier of (i) the first anniversary of the Grant Date or (ii) the day prior to the Company’s next annual shareholder meeting (such date, the “Vesting Date”), subject to the Grantee’s continued employment or service with the Company or any of its Affiliates through the applicable Vesting Date. The extent to which the DRSUs are vested as of a particular date is rounded down to the nearest whole unit.  Any fractional DRSUs resulting from the rounding application of the vesting schedule shall be aggregated and the DRSUs resulting from such aggregation shall vest on the final Vesting Date.

Notwithstanding the foregoing, in the event your service is terminated without Cause immediately before and contingent upon a Change in Control, the DRSUs that are unvested as of the date of termination will immediately become 100% vested.


Iovance Biotherapeutics, Inc.


I acknowledge that I have carefully read the Agreement and the prospectus for the Plan. I agree to be bound by all of the provisions set forth in those documents. I also consent to electronic delivery of all notices or other information with respect to the DRSUs or the Company.

Signature of Grantee







1.Terminology. Unless otherwise provided in this Agreement, capitalized terms used herein are defined in the Glossary at the end of this Agreement.

2.Vesting. All of the DRSUs are nonvested and forfeitable as of the Grant Date. So long as your service or employment is continuous from the Grant Date through the applicable date upon which vesting is scheduled to occur, the DRSUs will become vested and nonforfeitable in accordance with the vesting schedule set forth in the Notice. Except for the circumstances, if any, described in the Notice, none of the DRSUs will become vested and nonforfeitable after your service or employment ceases.

3.Termination of Employment or Service. Unless otherwise provided in the Notice, if your service or employment with the Company ceases for any reason, all DRSUs that are not then vested and nonforfeitable will be forfeited to the Company immediately and automatically upon such cessation without payment of any consideration therefor and you will have no further right, title or interest in or to such DRSUs or the underlying shares of Company Stock. Notwithstanding the foregoing, if your service or employment with the Company is terminated due to death or Disability, any unvested portion of the DRSUs shall become fully vested on the date of such termination.

4.Restrictions on Transfer. Neither this Agreement nor any of the DRSUs may be assigned, transferred, pledged, hypothecated or disposed of in any way, whether by operation of law or otherwise, and the DRSUs shall not be subject to execution, attachment or similar process. All rights with respect to this Agreement and the DRSUs shall be vested during your lifetime only by you or your guardian or legal representative. Notwithstanding the foregoing, the DRSUs may be transferred upon your death by last will and testament or under the laws of descent and distribution.

5.Settlement of DRSUs.

(a)Manner of Settlement. You are not required to make any monetary payment (other than applicable tax withholding, if required) as a condition to settlement of the DRSUs. The Company will issue to you, in settlement of your DRSUs, subject to the provisions of Section 6, if applicable, the number of whole shares of Company Stock that equals the number of whole DRSUs that become vested, and such vested DRSUs will terminate and cease to be outstanding upon such issuance of the shares. Upon issuance of such shares, the Company will determine the form of delivery (e.g., a stock certificate or electronic entry evidencing such shares) and may deliver such shares on your behalf electronically to the Company's designated stock plan administrator or such other broker-dealer as the Company may choose at its sole discretion, within reason.

(b)Timing of Settlement. Your vested DRSUs will be settled by the Company, via the issuance of Company Stock as described herein, on the earliest of one of the following events: (1) the consummation of a transaction that results in a Change in Control; (2) the 90th day following your Separation from Service; or (3) the tenth (10th) anniversary of the Grant Date. However, if a scheduled issuance date under the foregoing clauses (2) or (3) falls on a Saturday, Sunday or federal holiday, such issuance date shall instead fall on the preceding day that the principal executive offices of the Company are open for business.

6. Tax Withholding. If applicable, on or before the time you receive a distribution of the shares subject to your DRSUs, or at any time thereafter as requested by the Company, you hereby authorize any required withholding from the Company Stock issuable to you and/or otherwise agree to make adequate provision in cash for any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any Affiliate which arise in connection with your DRSUs (the "Withholding Taxes"). Additionally, the Company may, in its sole discretion, satisfy all or any portion of the Withholding Taxes obligation relating to your DRSUs by any of the following means or by a combination of such means: (i) withholding from any compensation otherwise payable to you by the Company; (ii) causing you to tender a cash

payment; (iii) permitting you to enter into a "same day sale" commitment with a broker-dealer that is a member of the Financial Industry Regulatory Authority (a "FINRA Dealer") whereby you irrevocably elect to sell a portion of the shares to be delivered under the Agreement to satisfy the Withholding Taxes and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary to satisfy the Withholding Taxes directly to the Company; or (iv) withholding shares of Company Stock from the shares of Company Stock issued or otherwise issuable to you in connection with the DRSUs with a Fair Market Value (measured as of the date shares of Company Stock are issued to you pursuant to Section 5) equal to the amount of such Withholding Taxes; provided, however, that the number of such shares of Company Stock so withheld shall not exceed the amount necessary to satisfy the Company's required tax withholding obligations using the minimum statutory withholding rates for federal, state, local and foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income. Unless the tax withholding obligations of the Company are satisfied, the Company shall have no obligation to deliver to you any Company Stock. In the event the Company's obligation to withhold arises prior to the delivery to you of Company Stock or it is determined after the delivery of Company Stock to you that the amount of the Company's withholding obligation was greater than the amount withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount.

7.Adjustments for Corporate Transactions and Other Events.

(a)Stock Dividend, Dividend, Stock Split and Reverse Stock Split. Upon a stock dividend of, or stock split or reverse stock split or other event described in Section 4(d) of the Plan affecting, the Company Stock, the number of outstanding DRSUs shall, without further action of the Administrator, be adjusted to reflect such event; provided, however, that any fractional DRSUs resulting from any such adjustment shall be eliminated. If the Company declares any dividend with respect to Company Stock after the Date of Grant and prior to termination of this DRSU, then such dividend attributable to the then vested DRSUs, if any, shall accrue to your benefit as additional DRSUs as calculated by the Administrator. Additional DRSUs resulting from a dividend shall be settled at the same time as the underlying vested DRSUs are settled. Adjustments and calculations under this paragraph will be made by the Administrator, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive.

(b)Merger, Consolidation and Other Events. If the Company shall be the surviving or resulting corporation in any merger or consolidation and the Company Stock shall be converted into other securities, the DRSUs shall pertain to and apply to the securities to which a holder of the number of shares of Company Stock subject to the DRSUs would have been entitled. If the stockholders of the Company receive by reason of any distribution in total or partial liquidation or pursuant to any merger of the Company or acquisition of its assets, securities of another entity or other property (including cash), then the rights of the Company under this Agreement shall inure to the benefit of the Company's successor, and this Agreement shall apply to the securities or other property (including cash) to which a holder of the number of shares of Company Stock subject to the DRSUs would have been entitled, in the same manner and to the same extent as the DRSUs.

8.Non-Guarantee of Employment or Service Relationship. Nothing in the Plan or this Agreement shall alter your at-will or other employment status or other service relationship with the Company, nor be construed as a contract of employment or service relationship between the Company and you, or as a contractual right of you to continue in the employ of, or in a service relationship with, the Company for any period of time, or as a limitation of the right of the Company to discharge you at any time with or without cause or notice and whether or not such discharge results in the forfeiture of any nonvested and forfeitable DRSUs or any other adverse effect on your interests under the Plan.

9.Rights as Stockholder. Except as expressly set forth herein, you shall not have any of the rights of a stockholder with respect to any shares of Company Stock that may be issued in settlement of the DRSUs until such shares of Company Stock have been issued to you.

10.The Company's Rights. The existence of the DRSUs shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company's capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Company Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company's assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

11.Restrictions on Issuance of Shares. The issuance of shares of Company Stock upon settlement of the DRSUs shall be subject to and in compliance with all applicable requirements of federal, state, or foreign law with respect to such securities. No shares of Company Stock may be issued hereunder if the issuance of such shares would constitute a violation of any applicable federal, state, or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Company Stock may then be listed. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company's legal counsel to be necessary to the lawful issuance of any shares subject to the DRSUs shall relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority shall not have been obtained. As a condition to the settlement of the DRSUs, the Company may require you to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company.

12.Notices. All notices and other communications made or given pursuant to this Agreement shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company, or in the case of notices delivered to the Company by you, addressed to the Administrator, care of the Company for the attention of its Secretary at its principal executive office or, in either case, if the receiving party consents in advance, transmitted and received via telecopy or via such other electronic transmission mechanism as may be available to the parties. Notwithstanding the foregoing, the Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this award of DRSUs by electronic means or to request your consent to participate in the Plan or accept this award of DRSUs by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

13.Entire Agreement. This Agreement, together with the relevant Notice and the Plan, contains the entire agreement between the parties with respect to the DRSUs granted hereunder. Any oral or written agreements, representations, warranties, written inducements, or other communications made prior to the execution of this Agreement with respect to the DRSUs granted hereunder shall be void and ineffective for all purposes.

14.Amendment. This Agreement may be amended from time to time by the Administrator in its discretion; provided, however, that this Agreement may not be modified in any manner that would have a materially adverse effect on the DRSUs as determined in the discretion of the Administrator, except as provided in the Plan or in a written document signed by each of the parties hereto.

15.Recoupment Policy. You agree that, subject to the requirements of applicable law, if you breach any restrictive covenant agreement between you and the Company or you otherwise engage in activities that constitute Cause either while employed by, or providing service to, the Company or within two years thereafter, the DRSU shall terminate, and the Company may rescind any delivery of shares upon vesting or settlement, as applicable on such terms as the Committee shall determine, including the right to require that in the event of any such rescission, (a) you shall return to the Company the shares received upon settlement of the DRSU or, (b) if you no longer owns the shares, you shall pay to the Company the amount of any gain realized or payment received as a result of any sale or other disposition of the shares (or, in the event you transfer the shares by gift or otherwise without consideration, the Fair Market Value of the shares on the date of the breach of any restrictive covenant agreement or activity constituting Cause). You agree that payment shall be made in such manner and on such terms and conditions as may be required by the Committee and you shall be entitled to set off against the amount of any such payment any amounts otherwise owed to you by the Company. In addition, you agree that the DRSU shall be subject to any applicable clawback or recoupment policies, share trading policies and other policies that may be implemented by the Board from time to time.

16.409A Savings Clause. This Agreement and the DRSUs, including any dividends, granted hereunder are intended to comply with Section 409A. If you are a "Specified Employee" (within the meaning set forth Section 409A(a)(2)(B)(i) of the Code) as of the date of your separation from service (within the meaning of Treasury Regulation Section 1.409A-1(h)), then the issuance of any shares that would otherwise be made upon the date of the separation from service or within the first six (6) months thereafter will not be made on the originally scheduled date(s) and will instead be issued in a lump sum on the date that is six (6)

months and one day after the date of the separation from service, but if and only if such delay in the issuance of the shares is necessary to avoid the imposition of additional taxation on you in respect of the shares under Section 409A of the Code. Each installment of DRSUs (and any dividends) that vests is intended to constitute a "separate payment" for purposes of Section 409A of the Code and Treasury Regulation Section 1.409A-2(b)(2).  In no event shall you, directly or indirectly, designate the calendar year of payment with respect to any amount that is "nonqualified deferred compensation" subject to Section 409A.

17.No Obligation to Minimize Taxes. The Company has no duty or obligation to minimize the tax consequences to you of this award of DRSUs and shall not be liable to you for any adverse tax consequences to you arising in connection with this award. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the tax consequences of this award and by signing the Notice, you have agreed that you have done so or knowingly and voluntarily declined to do so.

18.Conformity with Plan. This Agreement is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan. Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of the Plan. In the event of any ambiguity in this Agreement or any matters as to which this Agreement is silent, the Plan shall govern. A copy of the Plan is available upon request to the Administrator.

19.No Funding. This Agreement constitutes an unfunded and unsecured promise by the Company to issue shares of Company Stock in the future in accordance with its terms. You have the status of a general unsecured creditor of the Company as a result of receiving the grant of DRSUs.

20.Effect on Other Employee Benefit Plans. The value of the DRSUs subject to this Agreement shall not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits, if any, under any employee benefit plan sponsored by the Company, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s employee benefit plans.

21.Governing Law. The validity, construction and effect of this Agreement, and of any determinations or decisions made by the Administrator relating to this Agreement, and the rights of any and all persons having or claiming to have any interest under this Agreement, shall be determined exclusively in accordance with the laws of the State of Delaware, without regard to its provisions concerning the applicability of laws of other jurisdictions. As a condition of this Agreement, you agree that you will not bring any action arising under, as a result of, pursuant to or relating to, this Agreement in any court other than a federal or state court in the districts which include Delaware, and you hereby agree and submit to the personal jurisdiction of any federal court located in the district which includes Delaware or any state court in the district which includes Delaware. You further agree that you will not deny or attempt to defeat such personal jurisdiction or object to venue by motion or other request for leave from any such court.

22.Resolution of Disputes. Any dispute or disagreement which shall arise under, or as a result of, or pursuant to or relating to, this Agreement shall be determined by the Administrator in good faith in its absolute and uncontrolled discretion, and any such determination or any other determination by the Administrator under or pursuant to this Agreement and any interpretation by the Administrator of the terms of this Agreement, will be final, binding and conclusive on all persons affected thereby. You agree that before you may bring any legal action arising under, as a result of, pursuant to or relating to, this Agreement you will first exhaust your administrative remedies before the Administrator. You further agree that in the event that the Administrator does not resolve any dispute or disagreement arising under, as a result of, pursuant to or relating to, this Agreement to your satisfaction, no legal action may be commenced or maintained relating to this Agreement more than twenty-four (24) months after the Administrator's decision.

23.Headings. The headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

24.Electronic Delivery of Documents. By your signing the Notice, you (i) consent to the electronic delivery of this Agreement, all information with respect to the Plan and the DRSUs, and any reports of the Company provided generally to the Company's stockholders; (ii) acknowledge that you may receive from the Company a paper copy of any documents delivered electronically at no cost to you by contacting the Company by telephone or in writing; (iii) further acknowledge that you may revoke your consent to the electronic

delivery of documents at any time by notifying the Company of such revoked consent by telephone, postal service or electronic mail; and (iv) further acknowledge that you understand that you are not required to consent to electronic delivery of documents.

25.No Future Entitlement. By your signing the Notice, you acknowledge and agree that: (i) the grant of a restricted stock unit award is a one-time benefit which does not create any contractual or other right to receive future grants of restricted stock units, or compensation in lieu of restricted stock units, even if restricted stock units have been granted repeatedly in the past; (ii) all determinations with respect to any such future grants and the terms thereof will be at the sole discretion of the Committee; (iii) the value of the restricted stock units is an extraordinary item of compensation which is outside the scope of your employment contract, if any; (iv) the value of the restricted stock units is not part of normal or expected compensation or salary for any purpose, including, but not limited to, calculating any termination, severance, resignation, redundancy, end of service payments or similar payments, or bonuses, long-service awards, pension or retirement benefits; (v) the vesting of the restricted stock units ceases upon termination of service with the Company or transfer of employment from the Company, or other cessation of eligibility for any reason, except as may otherwise be explicitly provided in this Agreement; (vi) the Company does not guarantee any future value of the restricted stock units; and (vii) no claim or entitlement to compensation or damages arises if the restricted stock units decrease or do not increase in value and you irrevocably release the Company from any such claim that does arise.

26.Personal Data. For purposes of the implementation, administration and management of the restricted stock units or the effectuation of any acquisition, equity or debt financing, joint venture, merger, reorganization, consolidation, recapitalization, business combination, liquidation, dissolution, share exchange, sale of stock, sale of material assets or other similar corporate transaction involving the Company (a "Corporate Transaction"), you consent, by execution of the Notice, to the collection, receipt, use, retention and transfer, in electronic or other form, of your personal data by and among the Company and its third party vendors or any potential party to a potential Corporate Transaction. You understand that personal data (including but not limited to, name, home address, telephone number, employee number, employment status, social security number, tax identification number, date of birth, nationality, job and payroll location, data for tax withholding purposes and shares awarded, cancelled, vested and unvested) may be transferred to third parties assisting in the implementation, administration and management of the restricted stock units or the effectuation of a Corporate Transaction and you expressly authorize such transfer as well as the retention, use, and the subsequent transfer of the data by the recipient(s). You understand that these recipients may be located in your country or elsewhere, and that the recipient's country may have different data privacy laws and protections than your country. You understand that data will be held only as long as is necessary to implement, administer and manage the restricted stock units or effect a Corporate Transaction. You understand that you may, at any time, request a list with the names and addresses of any potential recipients of the personal data, view data, request additional information about the storage and processing of data, require any necessary amendments to data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company's Secretary. You understand, however, that refusing or withdrawing your consent may affect your ability to accept a restricted stock unit award.

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(a)"Administrator" means the Committee as defined in the Plan.

(b)Affiliate means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with the Company (including but not limited to joint ventures, limited liability companies and partnerships). For this purpose, “control” means ownership or more of the total combined voting power or value of all class of stock or interests of the entity.

(c)"Agreement' means this document, as amended from time to time, together with the Plan which is incorporated herein by reference.

(d)"Cause" has the meaning set forth in the Plan.

(e)"Change in Control" shall have the meaning set forth in the Plan, so long as such Change in Control constitutes a “change in control event” as defined in Code Section 409A and applicable regulations.

(f)"Code" means the Internal Revenue Code of 1986, as amended, and the Treasury regulations and other guidance promulgated thereunder.

(g)"Company Stock" shall mean common stock of the Company.

(h)"Company' means Iovance Biotherapeutics, Inc., and shall include all its successors except where the context otherwise requires. For purposes of determining whether a Change in Control has occurred, Company shall mean only Iovance Biotherapeutics, Inc.

(i)"DRSU means the Company's commitment to issue one share of Company Stock at a future date, subject to the terms of the Agreement and the Plan.

(j)Disability shall have the meaning in the Plan subject to the requirements of Treasury Regulation Section 1.409A-3(i)(4).

(k)"Fair Market Value" has the meaning set forth in the Plan.

(l)"Grant Date" means the effective date of a grant of DRSUs made to you as set forth in the relevant Notice.

(m)"Notice" means the statement, letter or other written notification provided to you by the Company setting forth the terms of a grant of DRSUs made to you.

(n)"Plan" means the Iovance Biotherapeutics, Inc. 2018 Equity Incentive Plan, as amended and as in effect from time to time.

(o)Separation of Service means your “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h), and includes any termination of service due to death or Disability.

(p)"You" or "Your" means the recipient of the DRSUs as reflected on the applicable Notice. Whenever the word "you" or "your" is used in any provision of this Agreement under circumstances where the provision should logically be construed, as determined by the Administrator, to apply to the estate, personal representative, or beneficiary to whom the DRSUs may be transferred by will or by the laws of descent and distribution, the words "you" and "your" shall be deemed to include such person.

(End of Agreement)