VAXGEN INC
STOCK OPTION AGREEMENT
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<TYPE>EX-10.30
<SEQUENCE>11
<FILENAME>d50097_ex10-30.htm
<DESCRIPTION>STOCK OPTION AGREEMENT
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     <!-- Control Number: 50097                                                            -->
     <!-- Rev Number:     1.0                                                              -->
     <!-- Client Name:    Vaxgen                                                           -->
     <!-- Project Name:   10-K                                                             -->
     <!-- Firm Name:      Vaxgen                                                           -->
     <TITLE>EX-10.30</TITLE>
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<H2 ALIGN=LEFT><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>Exhibit 10.30</FONT></H2>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND ANY
SALE OF SUCH SECURITIES IS SUBJECT TO COMPLIANCE WITH, OR THE AVAILABILITY OF
EXEMPTIONS FROM COMPLIANCE WITH, THE REGISTRATION AND QUALIFICATION REQUIREMENTS
OF SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THIS INSTRUMENT DOES NOT
CONSTITUTE AN OFFER OR SOLICITATION TO ANY PERSON IN ANY JURISDICTION WHERE SUCH
OFFER OR SOLICITATION MAY NOT LAWFULLY BE MADE. TRANSFER OF THIS INSTRUMENT AND
THE SECURITIES OFFERED HEREBY IS RESTRICTED AS PROVIDED IN SECTIONS 7 AND 8
BELOW.</B> </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>STOCK OPTION
AGREEMENT</FONT></H1>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THIS
STOCK OPTION AGREEMENT </B>(this &#147;Agreement&#148;) is entered into,
effective as of September 6, 2001, by <B>VAXGEN, INC., </B>a Delaware
corporation (the &#147;Company&#148;), and Lance Gordon (the
&#147;Holder&#148;). </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>R E C I T A L</FONT></H1>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A.This
Agreement is granted to the Holder on a stand-alone basis and not under the Company&#146;s
1996 Stock Option Plan (the &#147;Plan&#148;), including for the purpose of calculating
the number of options issued under the Plan. For administrative feasibility, certain of
the terms of this Agreement are governed by the Plan, as further described in Section 4
below. Capitalized terms that are used but not defined in this Agreement will have the
meanings given those terms in the Plan.  </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B.
This Agreement is granted to the Holder in reliance on the exemption from
registration provided in Section 4(2) of the Securities Act of 1933, as amended
(the &#147;Securities Act&#148;), and is not registered under the Company&#146;s
registration statement on Form S-8 filed on August 17, 1999 with the Securities
and Exchange Commission (the &#147;SEC&#148;). </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW,
THEREFORE, </B>the Company and the Holder agree as follows: </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.</B>
<B>Grant of the Option. </B>In connection with, and as a condition to, the
Holder&#146;s execution of that certain Employment Agreement by and between the
Company and the Holder, dated as of September, 2001, the Company grants to the
Holder an option (the &#147;Option&#148;) to acquire from the Company Four
Hundred Thousand (400,000) shares of Common Stock (the &#147;Shares&#148;) at
the price of $14.90 per share (the &#147;Purchase Price&#148;). The Option is
intended to be an Incentive Stock Option to the extent alowable by the Internal
Revenue Service </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.</B>
<B>Term of the Option. </B>Unless earlier terminated pursuant to the Plan, the
Option will terminate on the earliest to occur of the following: (a) September
5, 2011; (b) the expiration of ninety (90) days following the date of
termination of the Holder&#146;s employment with the Company for any reason
other than death, Disability or cause; (c) the expiration of one (1) year
following the date of termination of the Holder&#146;s employment with the
Company by reason of death or Disability; and (d) the date of termination of the
Holder&#146;s employment with the Company for cause. </FONT></P>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.
Exercisability.</B> The Option will become exercisable in accordance with the following
schedule: the first 100,000 shares shall vest and become exercisable on 10/05/01, the
second 100,000 shares shall vest on 09/06/02, the third 100,000 shall vest on 09/06/03
and the fourth and final 100,000 shares shall vest on 09/06/04.</FONT></FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.
Provisions of Plan.</B> The Option is subject to Sections 2, 3, 5, 6, 7, 8, 10 and 11 of the
Plan.</FONT></FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.
Exercise of the Option.</B> In order to exercise the Option, the Holder must do the following:</FONT></FONT> </P>
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(a)
deliver to the Company a written notice, substantially in the form of the attached
Exhibit A, specifying the number of Shares for which the Option is being exercised;</FONT></TD>
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(b)
surrender this Agreement to the Company;</FONT></TD>
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(c)
tender payment to the Company of the aggregate Purchase Price for the Shares for which
the Option is being exercised, which amount may be paid (i) in cash or by certified or
cashier&#146;s check; or (ii) in any other manner permitted by the Plan;</FONT></TD>
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(d)
pay, or make arrangements satisfactory to the Board for payment to the Company of, all
taxes required to be withheld by the Company in connection with the exercise of the
Option;</FONT></TD>
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(e)
if requested by the Board, deliver to the Company, at the Holder&#146;s expense, a legal
opinion, satisfactory in form and substance to the Company, of legal counsel designated
by the Holder and satisfactory to the Company, to the effect that exercise of the Option
by the Holder, and the acquisition of Shares pursuant thereto, may be effected without
registration or qualification of the Shares under the Securities Act, or any applicable
state securities laws; and</FONT></TD>
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(f)
execute and deliver to the Company any documents required from time to time by the Board
in order to promote compliance with the Securities Act, applicable state securities laws,
or any other applicable law, rule or regulation.</FONT></TD>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Unless the Option has
terminated or been exercised in full, the Company shall affix to this Agreement
an appropriate notation indicating the number of Shares for which the Option was
exercised and return this Agreement to the Holder. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.</B>
<B>Legends. </B>Each certificate representing Shares issued upon exercise of the
Option shall, unless the Board otherwise determines, contain on its face the
notice <B>&#147;SEE TRANSFER RESTRICTIONS ON REVERSE&#148; </B>and on its
reverse a legend in form substantially as follows, together with any other
legends that the Board determines to be necessary or appropriate: </FONT></P>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOTICE:
TRANSFER AND OTHER RESTRICTIONS </B></FONT></P>
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<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
ENCUMBERED, OR OTHERWISE DISPOSED OF EXCEPT UPON SATISFACTION OF CERTAIN CONDITIONS.
INFORMATION CONCERNING THESE RESTRICTIONS MAY BE OBTAINED FROM THE CORPORATION. ANY OFFER
OR DISPOSITION OF THESE SECURITIES WITHOUT SATISFACTION OF SAID CONDITIONS WILL BE
WRONGFUL AND WILL NOT ENTITLE THE TRANSFEREE TO REGISTER OWNERSHIP OF THE SECURITIES WITH
THE CORPORATION.</B></FONT></FONT></TD>
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<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO RESTRICTIONS ON TRANSFER
OR OTHER RESTRICTIONS PURSUANT TO THE PROVISIONS OF THE CORPORATION&#146;S 1996 STOCK OPTION
PLAN AND/OR AN AGREEMENT BETWEEN THE HOLDER AND THE CORPORATION AND/OR AN AGREEMENT AMONG
THE SHAREHOLDERS OF THE CORPORATION. INFORMATION CONCERNING THESE RESTRICTIONS MAY BE
OBTAINED FROM THE CORPORATION.</B></FONT></FONT></TD>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.
Representations and Warranties.</B> By executing this Agreement:</FONT></FONT> </P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
The Holder accepts the Option and agrees to comply with and be bound by all of
the provisions of this Agreement and the provisions the Plan described in
Section 4. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
The Holder acknowledges that no registration statement under the Securities Act,
or under any state securities laws, has been filed with respect to the Option or
any Shares that may be acquired upon exercise of the Option, and the Company is
under no obligation to do so. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
The Holder represents and warrants that the Option, and any Shares acquired upon
exercise of the Option, will be acquired and held by the Holder for the
Holder&#146;s own account, for investment purposes only, and not with a view
towards the distribution or public offering thereof nor with any present
intention of reselling or distributing the same at any particular future time. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
The Holder agrees not to sell, transfer or otherwise dispose of the Option
except as specifically permitted by this Agreement, the Plan and any applicable
securities laws. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
The Holder agrees not to sell, transfer or otherwise dispose of any Shares
acquired upon exercise of the Option unless (i) there is an effective
registration statement under the Securities Act covering the proposed
disposition and compliance with governing state securities laws, (ii) the Holder
delivers to the Company, at the Holder&#146;s expense, a &#147;no-action&#148;
letter or similar interpretative opinion, satisfactory in form and substance to
the Company, from the staff of each appropriate securities agency, to the effect
that such Shares may be disposed of by the Holder in the manner proposed, or
(iii) the Holder delivers to the Company, at the Holder&#146;s expense, a legal
opinion, satisfactory in form and substance to the Company, of legal counsel
designated by the Holder and satisfactory to the Company, to the effect that the
proposed disposition may be effected without registration or qualification of
such Shares under the Securities Act or any applicable state securities laws. </FONT></P>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.</B>
<B>Procedures Upon Permitted Transfer. </B>Until such time, if ever, as the
Agreement is registered under a registration statement on Form S-8, prior to any
sale, transfer or other disposition of any Shares acquired upon exercise of the
Option, the Holder agrees to give written notice to the Company of the
Holder&#146;s intention to effect such disposition. The notice must describe the
circumstances of the proposed transfer in reasonable detail and must specify the
manner in which the requirements of Section 7(d) above will be satisfied in
connection with the proposed disposition. After (a) legal counsel to the Company
has determined that the requirements of Section 7(d) above will be satisfied,
(b) the Holder has executed such documentation as may be necessary to effect the
proposed disposition, and (c) the Holder has paid, or made arrangements
satisfactory to the Board for the payment of any taxes, if any, required to be
withheld by the Company in connection with the proposed disposition, the Company
will, as soon as practicable, transfer such Shares in accordance with the terms
of the notice. Any stock certificate issued upon such transfer will bear a
restrictive legend in the form required by Section 6, unless in the opinion of
legal counsel to the Company such legend is not required. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.</B>
<B>Entire Agreement; Amendments; Binding Effect. </B>This Agreement, together
with provisions of the Plan referenced in Section 4, constitutes the entire
agreement and understanding between the Company and the Holder regarding the
subject matter hereof. Except as permitted by the Plan, no amendment of the
Option or this Agreement, or waiver of any provision of this Agreement, shall be
valid unless in writing and duly executed by the Company and the Holder. The
failure of any party to enforce any of that party&#146;s rights against the
other party for breach of any of the terms of this Agreement or the Plan shall
not be construed as a waiver of such rights as to any continued or subsequent
breach. This Agreement shall be binding upon the Holder and his or her heirs,
successors and assigns. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN
WITNESS WHEREOF, </B>the parties have executed this Agreement as of the day and
year first above written. </FONT></P>
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<TD ALIGN=LEFT WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;Company&#148;</FONT></TD>
<TD ALIGN=LEFT WIDTH=50%><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>VAXGEN, INC.</B><BR>
<B>A Delaware
corporation</B><BR><BR>

By _____________________________________</FONT></FONT></TD>
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<TD ALIGN=LEFT WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;Holder&#148; </FONT></TD>
<TD ALIGN=LEFT WIDTH=50%><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;_____________________________________<BR>
                                               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;_____________________________________<BR>
                                               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(print name)</FONT></FONT></TD>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT A</FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FORM OF
EXERCISE OF OPTION</FONT></H1>
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<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To: </FONT></TD>
<TD WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=94%><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2"><B>VaxGen, Inc.</B><BR>
1000
Marina Boulevard<BR>Brisbane, CA 94005-1841</FONT></FONT> </TD>
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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned holds Option Number _____ (the &#147;Option&#148;), represented by a
Stock Option Agreement dated effective as of ______________, 2001 (the
&#147;Agreement&#148;), granted to the undersigned. The undersigned hereby
exercises the Option and elects to purchase _______________ shares (the
&#147;Shares&#148;) of Common Stock of VaxGen, Inc. (the &#147;Company&#148;)
pursuant to the Option. This notice is accompanied by full payment of the
Purchase Price for the Shares in cash or by check or in another manner permitted
by Section 5(c) of the Agreement. The undersigned has also paid, or made
arrangements satisfactory to the Board for payment of, all taxes, if any,
required to be withheld by the Company in connection with the exercise of the
Option. </FONT></P>

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<P><FONT FACE="TIMES NEW ROMAN, TIMES, SERIF" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date:
__________________, _____. </FONT></P>



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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>_____________________________________<BR>
_____________________________________<BR>(print name)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></P>

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