1989 Stock Option Plan - Ann Arbor Stromal Inc.
ANN ARBOR STROMAL, INC.
1989 STOCK OPTION PLAN
Adopted August 15, 1989
1. PURPOSE.
(a) The purpose of the Plan is to provide a means which selected
key employees and directors (if declared eligible under paragraph 4) of and
consultants to Ann Arbor Stromal, Inc., a Michigan corporation (the "Company"),
and its Affiliates, as defined in subparagraph 1(b), may be given an opportunity
to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 425(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").
(c) The Company, by means of the Plan, seeks to retain the
services of persons now employed by or serving as consultants or directors to
the Company, to secure and retain the services of new employees/persons capable
of filling such positions, and to provide incentives for such persons to exert
maximum efforts for the success of the Company.
(d) The Company intends that the options issued under the Plan
shall, in the discretion of the Board of Directors of the Company (the "Board")
or any committee to which responsibility for administration of the Plan has been
delegated
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pursuant to subparagraph 2(c), be either incentive stock options as that term is
used in Section 422A of the Code ("Incentive Stock Options"), or options which
do not qualify as incentive stock options ("Supplemental Stock Options"). All
options shall be separately designated Incentive Stock Options or Supplemental
Stock Options at the time of grant, and in such form as issued pursuant to
paragraph 5, and a separate certificate or certificates shall be issued for
shares purchased on exercise of each type of option. An option designated as a
Supplemental Stock Option shall not be treated as an incentive stock option.
2. ADMINISTRATION.
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(a) The Plan shall be administered by the Board unless and until
the Board delegates administration to a committee, as provided in subparagraph
2(c). Whether or not the Board has delegated administration, the Board shall
have the final power to determine all questions of policy and expediency that
may arise in the administration of the Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the persons
eligible under the Plan shall be granted options; when and how the option shall
be granted; whether the option will be an Incentive Stock Option or a
Supplemental Stock Option; the provisions of each option granted (which need not
be identical), including the time or times during the term of each option within
which all or portions of such option may be exercised; and the
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number of shares for which an option shall be granted to each such person.
(2) To construe and interpret the Plan and options
granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(3) To amend the Plan as provided in paragraph 10.
(4) Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company.
(c) The Board may delegate administration of the Plan to a
committee composed of not fewer than three (3) members (the "Committee"), all of
the members of which Committee shall be disinterested persons, if required and
as defined by the provisions of subparagraph 2(d). If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration of
the Plan. Additionally, prior to the date of the first
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registration of an equity security of the Company under Section 12 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
notwithstanding anything to the contrary contained herein, the Board may
delegate administration of the Plan to any person or persons and the term
"Committee" shall apply to any person or persons to whom such authority has been
delegated.
(d) The term "disinterested person," as used in this Plan, shall
mean an administrator of the Plan, whether a member of the Board or of any
Committee to which responsibility for administration of the Plan has been
delegated pursuant to subparagraph 2(c): (i) who is not at the time he or she
exercises discretion in administering the Plan eligible and has not at any time
within one year prior thereto been eligible for selection as a person to whom
stock may be allocated or to whom stock options or stock appreciation rights may
be granted pursuant to the Plan or any other plan of the Company or any of its
affiliates entitling the participants therein to acquire stock, stock options or
stock appreciation rights of the Company or any of its affiliates; or (ii) who
is otherwise considered to be a "disinterested person" in accordance with the
rules, regulations or interpretations of the Securities and Exchange Commission.
Any such person shall otherwise comply with the requirements of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
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(e) Any requirement that an administrator of the Plan be a
"disinterested person" shall not apply (i) prior to the date of the first
registration of an equity security of the Company under Section 12 of the
Exchange Act, or (ii) if the Board or the Committee expressly declares that such
requirement shall not apply.
3. SHARES SUBJECT TO THE PLAN.
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(a) Subject to the provisions of paragraph 9 relating to
adjustments upon changes in stock, the stock that may be sold pursuant to
options granted under the Plan shall not exceed in the aggregate one million
three hundred sixty-three thousand six hundred thirty-six (1,363,636) shares of
the Company's common stock. If any option granted under the Plan shall for any
reason expire or otherwise terminate without having been exercised in full, the
stock not purchased under such option shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
(c) An Incentive Stock Option may be granted to an eligible
person under the Plan only if the aggregate fair market value (determined at the
time the option is granted) of the stock with respect to which incentive stock
options (as defined in the Code) granted after 1986 are exercisable for the
first time by such optionee during any calendar year under all incentive stock
option plans of the Company and its Affiliates does not exceed one hundred
thousand dollars ($100,000). Should it be determined
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that an option granted under the Plan exceeds such maximum for any reason other
than the failure of a good faith attempt to value the stock subject to the
option, such option shall be considered a Supplemental Stock Option to the
extent, but only to the extent, of such excess; provided, however, that should
it be determined that an entire option or any portion thereof does not qualify
for treatment as an incentive stock option by reason of exceeding such maximum,
such option or the applicable portion shall be considered a Supplemental Stock
Option.
4. ELIGIBILITY.
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(a) Incentive Stock Options may be granted only to employees
(including officers) of the Company or its Affiliates. A director of the Company
shall not be eligible to receive Incentive Stock Options unless such director is
also an employee (including an officer) of the Company or any Affiliate.
Supplemental Stock Options may be granted only to key employees (including
officers) of, directors of or consultants to the Company or its Affiliates. A
director of the Company shall not be eligible for a Supplemental Stock Option
unless such director is also a key employee (including an officer) of or
consultant to the Company or any Affiliate.
(b) A director shall in no event be eligible for the benefits of
the Plan unless and until such director is expressly declared eligible to
participate in the Plan by action of the Board or the Committee, and only if, at
any time discretion is exercised by the Board in the selection of a director as
a person
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to whom options may be granted, or in the determination of the number of shares
which may be covered by options granted to a director: (i) a majority of the
Board and a majority of the directors acting in such matter are disinterested
persons, as defined in subparagraph 2(d); (ii) the Committee consists solely of
"disinterested persons" as defined in subparagraph 2(d); or (iii) the Plan
otherwise complies with the requirements of Rule 16b-3 promulgated under the
Exchange Act, as from time to time in effect. The Board shall otherwise comply
with the requirements of Rule 16b-3 promulgated under the Exchange Act, as from
time to time in effect. This subparagraph 4(b) shall not apply prior to the date
of the first registration of an equity security of the Company under Section 12
of the Exchange Act.
(c) No person shall be eligible for the grant of an option under
the Plan if, at the time of grant, such person owns (or is deemed to own
pursuant to Section 425(d) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of any of its Affiliates unless the exercise price of such option is at least
one hundred ten percent (110%) of the fair market value of such stock at the
date of grant and the term of the option does not exceed five (5) years from the
date of grant.
5. OPTION PROVISIONS.
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Each option shall be in such form and shall contain such terms and
conditions as the Board or the Committee shall deem appropriate. The provisions
of separate options need not be
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identical, but each option shall include (through incorporation of provisions
hereof by reference in the option or otherwise) the substance of each of the
following provisions:
(a) The term of any option shall not be greater than twelve (12)
years from the date it was granted.
(b) The exercise price of each Incentive Stock Option shall be
not less than one hundred percent (100%) of the fair market value of the stock
subject to the option on the date the option is granted. The exercise price of
each Supplemental Stock Option shall be not less than eighty-five percent (85%)
of the fair market value of the stock subject to the option on the date the
option is granted.
(c) The purchase price of stock acquired pursuant to an option
shall be paid, to the extent permitted by applicable statutes and regulations,
either (i) in cash at the time the option is exercised, or (ii) at the
discretion of the Board or the Committee, either at the time of the grant or
exercise of the option, (A) by delivery to the Company of other common stock of
the Company, (B) according to a deferred payment or other arrangement (which may
include, without limiting the generality of the foregoing, the use of other
common stock of the Company) with the person to whom the option is granted or to
whom the option is transferred pursuant to subparagraph 5(d), or (C) in any
other form of legal consideration that may be acceptable to the Board or the
Committee.
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In the case of any deferred payment arrangement, interest shall be payable
at least annually and shall be charged at the minimum rate of interest necessary
to avoid the treatment as interest, under any applicable provisions of the Code,
of any amounts other than amounts stated to be interest under the deferred
payment arrangement.
(d) An option shall not be transferable except by will or by the
laws of descent and distribution, and shall be exercisable during the lifetime
of the person to whom the option is granted only by such person.
(e) The total number of shares of stock subject to an option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). From time to time during each of such installment periods, the
option may become exercisable ("vest") with respect to some or all of the shares
allotted to that period, and may be exercised with respect to some or all of the
shares allotted to such period and/or any prior period as to which the option
was not fully exercised. During the remainder of the term of the option (if its
term extends beyond the end of the installment periods), the option may be
exercised from time to time with respect to any shares then remaining subject to
the option. The provisions of this subparagraph 5(e) are subject to any option
provisions governing the minimum number of shares as to which an option may be
exercised.
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(f) The Company may require any optionee, or any person to whom
an option is transferred under subparagraph 5(d), as a condition of exercising
any such option, (1) to give written assurances satisfactory to the Company as
to the optionee's knowledge and experience in financial and business matters
and/or to employ a purchaser representative reasonably satisfactory to the
Company who is knowledgeable and experienced in financial and business matters,
and that he or she is capable of evaluating, alone or together with the
purchaser representative, the merits and risks of exercising the option; and
(2) to give written assurances satisfactory to the Company stating that such
person is acquiring the stock subject to the option for such person's own
account and not with any present intention of selling or otherwise distributing
the stock. These requirements, and any assurances given pursuant to such
requirements, shall be inoperative if (i) the issuance of the shares upon the
exercise of the option has been registered under a then currently effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), or (ii) as to any particular requirement, a determination is
made by counsel for the Company that such requirement need not be met in the
circumstances under the then applicable securities laws.
(g) An option shall terminate three (3) months after termination
of the optionee's employment or relationship as a consultant or director with
the Company or an Affiliate, unless (i) such termination is due to such person's
permanent and total
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disability, within the meaning of Section 422A(c)(7) of the Code, in which case
the option may, but need not, provide that it may be exercised at any time
within one (1) year following such termination of employment or relationship as
a consultant or director; or (ii) the optionee dies while in the employ of or
while serving as a consultant or director to the Company or an Affiliate, or
within not more than three (3) months after termination of such relationship, in
which case the option may, but need not, provide that it may be exercised at any
time within eighteen (18) months following the death of the optionee by the
person or persons to whom the optionee's rights under such option pass by will
or by the laws of descent and distribution; or (iii) the option by its terms
specifies either (a) that it shall terminate sooner than three (3) months after
termination of the optionee's employment or relationship as a consultant or
director, or (b) that it may be exercised more than three (3) months after
termination of the relationship with the Company or an Affiliate. This
subparagraph 5(g) shall not be construed to extend the term of any option or to
permit anyone to exercise the option after expiration of its term, nor shall it
be construed to increase the number of shares as to which any option is
exercisable from the amount exercisable on the date of termination of the
optionee's employment or relationship as a consultant or director.
(h) The option may, but need not, include a provision whereby
the optionee may elect at any time during the term of his
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or her employment or relationship as a consultant or director with the Company
or any Affiliate to exercise the option as to any part or all of the shares
subject to the option prior to the stated vesting date of the option or of any
installment or installments specified in the option. Any shares so purchased
from any unvested installment or option may be subject to a repurchase right in
favor of the Company or to any other restriction the Board or the Committee
determines to be appropriate.
(i) To the extent provided by the terms of an option, the
optionee may satisfy any federal, state or local tax withholding obligation
relating to the exercise of such option by any of the following means or by a
combination of such means: (1) tendering a cash payment; (2) authorizing the
Company to withhold from the shares of the common stock otherwise issuable to
the participant as a result of the exercise of the stock option a number of
shares having a fair market value less than or equal to the amount of the
withholding tax obligation; or (3) delivering to the Company owned and
unencumbered shares of the common stock having a fair market value less than or
equal to the amount of the withholding tax obligation.
6. COVENANTS OF THE COMPANY.
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(a) During the terms of the options granted under the Plan, the
Company shall keep available at all times the number of shares of stock required
to satisfy such options.
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(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of stock upon exercise of the options granted
under the Plan; provided, however, that this undertaking shall not require the
Company to register under the Securities Act either the Plan, any option granted
under the Plan or any stock issued or issuable pursuant to any such option. If,
after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such options unless and until such authority is obtained.
7. USE OF PROCEEDS FROM STOCK.
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Proceeds from the sale of stock pursuant to options granted under
the Plan shall constitute general funds of the Company.
8. MISCELLANEOUS.
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(a) The Board or the Committee shall have the power to
accelerate the time during which an option may be exercised or the time during
which an option or any part thereof will vest pursuant to subparagraph 5(e),
notwithstanding the provisions in the option stating the time during which it
may be exercised or the time during which it will vest.
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(b) Neither an optionee nor any person to whom an option is
transferred under subparagraph 5(d) shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to such
option unless and until such person has satisfied all requirements for exercise
of the option pursuant to its terms.
(c) Throughout the term of any option granted pursuant to the
Plan, the Company shall make available to the holder of such option, not later
than one hundred twenty (120) days after the close of each of the Company's
fiscal years during the option term, upon request, such financial and other
information regarding the Company as comprises the annual report to the
shareholders of the Company provided for in the bylaws of the Company.
(d) Nothing in the Plan or any instrument executed or option
granted pursuant thereto shall confer upon any eligible employee or optionee any
right to continue in the employ of the Company or any Affiliate (or to continue
acting as a consultant or director) or shall affect the right of the Company or
any Affiliate to terminate the employment or consulting relationship or
directorship of any eligible employee or optionee with or without cause. In the
event that an optionee is permitted or otherwise entitled to take a leave of
absence, the Company shall have the unilateral right to (i) determine whether
such leave of absence will be treated as a termination of employment for
purposes of paragraph 5(g) hereof and corresponding provisions of
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any outstanding options, and (ii) suspend or otherwise delay the time or times
at which the shares subject to the option would otherwise vest.
9. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
options will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price per
share of stock subject to outstanding options.
(b) In the event of: (1) a dissolution or liquidation of the
Company; (2) a merger or consolidation in which the Company is not the surviving
corporation; or (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's common stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise then to the
extent permitted by applicable law: (i) any surviving corporation shall assume
any options outstanding under the Plan or shall substitute similar options for
those outstanding under the Plan, or (ii) such options shall continue in full
force and effect. In the event any surviving corporation
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refuses to assume or continue such options, or to substitute similar options for
those outstanding under the Plan, then, with respect to options held by persons
then performing services as employees or as consultants or directors for the
Company as the case may be, the time during which such options may be exercised
shall be accelerated and the options terminated if not exercised prior to such
event.
10. AMENDMENT OF THE PLAN.
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(a) The Board at any time, and from time to time, may amend the
Plan. However, except as provided in paragraph 9 relating to adjustments upon
changes in stock, no amendment shall be effective unless approved by the
shareholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:
(i) Increase the number of shares reserved for options
under the Plan;
(ii) Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires shareholder
approval in order for the Plan to satisfy the requirements of Section 422A(b) of
the Code); or
(iii) Modify the Plan in any other way if such
modification requires shareholder approval in order for the Plan to satisfy the
requirements of Section 422A(b) of the Code or to comply with the requirements
of Rule 16b-3 promulgated under the Exchange Act.
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(b) It is expressly contemplated that the Board may amend the
Plan in any respect the Board deems necessary or advisable to provide optionees
with the maximum benefits provided or to be provided under the provisions of the
Code and the regulations promulgated thereunder relating to employee incentive
stock options and/or to bring the Plan and/or incentive stock options granted
under it into compliance therewith.
(c) Rights and obligations under any option granted before
amendment of the Plan shall not be altered or impaired by any amendment of the
Plan unless (i) the Company requests the consent of the person to whom the
option was granted and (ii) such person consents in writing.
11. TERMINATION OR SUSPENSION OF THE PLAN.
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(a) The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate ten (10) years from the date
the Plan is adopted by the Board or approved by the shareholders of the Company,
whichever is earlier. No options may be granted under the Plan while the Plan is
suspended or after it is terminated.
(b) Rights and obligations under any option granted while the
Plan is in effect shall not be altered or impaired by suspension or termination
of the Plan, except with the consent of the person to whom the option was
granted.
12. EFFECTIVE DATE OF PLAN.
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The Plan shall become effective as determined by the Board, but no
options granted under the Plan shall be exercised
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unless and until the Plan has been approved by the shareholders of the Company.
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INCENTIVE STOCK OPTION AGREEMENT
OPTIONEE:
AASTROM Biosciences, Inc., formerly known as Ann Arbor Stromal, Inc.,
(the "Company"), pursuant to its 1989 Stock Option Plan (the "Plan"), hereby
grants to you, the Optionee named above, an option to purchase shares of the
common stock of the Company ("Common Stock"). This option is intended to
qualify as an "incentive stock option" within the meaning of Section 422A of the
Internal Revenue Code of 1986, as amended from time to time (the "Code"). The
date of grant of this option is ____________.
The grant hereunder is in connection with and in furtherance of the
Company's compensatory benefit plan for participation of the Company's employees
(including officers), directors or consultants and is intended to comply with
the provisions of Rule 701 promulgated by the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act").
The details of your option are as follows:
1. The total number of shares of Common Stock subject to this option
is ___________. Subject to the limitations contained herein, this
option shall be exercisable with respect to each installment shown
below on or after the date of vesting applicable to such
installment, as follows:
Number of Shares Date of Earliest Exercise
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(Installment) (Vesting)
provided, however, you will be entitled to exercise this option with respect to
all of the shares of Common Stock subject to this
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Incentive Stock Option Agreement
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option is your employment by the Company is terminated upon or at any time
within six (6) months after the date of a "change of control" of the
Company (as defined below), unless such termination is for cause (as
defined below). For purposes of this Agreement, a "change of control" shall
be deemed to have occurred if in a single transaction or a series of
related transactions occurring within a twelve month period: all or
substantially all of the business or assets of the Company is sold,
transferred or leased; the Company is merged into or consolidated with
another entity and, as a result, the shareholders of the Company
immediately prior to the merger own less than 51% of the voting capital
stock of the successor corporation; there is a change of control of 51% or
more of the outstanding capital stock of the Company on a fully diluted
basis; or a new shareholder acquires the right to elect a majority of the
board of directors. The date of such "change of control" for purposes of
this Agreement shall be the date of the closing of the transaction which is
deemed to constitute a change of control under the foregoing sentence, or
if a series of related transactions is deemed to constitute a change of
control, the date of the closing of the last transaction in the series. For
purposes of this Agreement, "cause" shall include disclosure of any
proprietary information of the Company or of any third party in violation
of the Proprietary Information and Invention Agreement between you and the
Company; any commission of a felony; willful misconduct; or any commission
of any act or series of acts of dishonesty which are injurious to the best
interests of the Company.
2. a. The exercise price of this option is ________ per share, being not less
than the fair market value of the Common Stock on the date of grant of
this option.
b. Payment of the exercise price per share is due in full in cash
(including check) upon exercise of the option with respect to all or
any part of each installment which has become exercisable by you.
Notwithstanding the foregoing, this option may be exercised pursuant to
a program developed under Regulation T as promulgated by the Federal
Reserve Board which results in the receipt of cash (or
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Incentive Stock Option Agreement
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check) by the Company prior to the issuance of
Common Stock.
3. The minimum number of shares with respect to which this option may be
exercised at any one time is one hundred (100) except (a) as to an
installment subject to exercise, as set forth in paragraph 1, which
amounts to fewer than one hundred (100) shares, in which case, as to
the exercise of that installment, the number of shares in such
installment shall be the minimum number of shares, and (b) with respect
to the final exercise of this option this paragraph 3 shall not apply.
4. Notwithstanding anything to the contrary contained herein, this option
may not be exercised unless the shares issuable upon exercise of this
option are then registered under the Act or if such shares are not then
so registered, the Company has determined that such exercise and
issuance is exempt from the registration requirements of the Act.
5. The term of this option commences on the date hereof and, unless sooner
terminated as set forth below or in the Plan, terminates ten (10) years
from the date this option is granted. This option shall terminate prior
to the expiration of its term as follows: this option shall terminate
three (3) months after the termination of your employment with the
Company or an affiliate of the Company (as defined in the Plan) for any
reason or for no reason (including without limitation a termination in
connection with a "change of control" of the Company, as defined in
paragraph 1 hereof) unless:
a. such termination of your employment is due to your permanent and
total disability (within the meaning of Section 422A(c)(7) of the
Code), in which event the option shall terminate on the earlier of
the termination date set forth above or one (1) year following such
termination of employment; or
b. such termination of employment is due to your death, in which event
the option shall terminate on the earlier of the termination date
set forth above or eighteen (18) months after your death; or
c. during any part of such three (3) month period the option is not
exercisable solely because of the condition set forth in paragraph
4 above, in which
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Incentive Stock Option Agreement
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event the option shall not terminate until the earlier of the
termination date set forth above or until it shall have been
exercisable for an aggregate period of three (3) months after
termination of employment; or
d. exercise of the option within three (3) months after termination of
your employment with the Company or with an affiliate would result
in liability under section 16(b) of the Securities Exchange Act of
1934, in which case the option will terminate on the earlier of (i)
the termination date set forth above, (ii) the tenth (10th) day
after the last date upon which exercise would result in such
liability or (iii) six (6) months and ten (10) days after the
termination of your employment with the Company or an affiliate.
However, this option may be exercised following termination of
employment only as to that number of shares as to which it was
exercisable under the provisions of paragraph 1 of this option on
the date of termination of employment.
6. a. This option may be exercised, to the extent specified above, by
delivering a notice of exercise (in a form designated by the
Company) together with the exercise price to the Secretary of the
Company, or to such other person as the Company may designate,
during regular business hours, together with such additional
documents as the Company may then require pursuant to subparagraph
5(f) of the Plan.
b. By exercising this option you agree that:
(i) The Company may require you to enter an arrangement providing
for the payment by you to the Company of any tax withholding
obligation of the Company arising by reason of (1) the
exercise of this option; (2) the lapse of any substantial risk
of forfeiture to which the shares are subject at the time of
exercise; or (3) the disposition of shares acquired upon such
exercise;
(ii) you will notify the Company in writing within fifteen (15)
days after the date of any
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Incentive Stock Option Agreement
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disposition of any of the shares of the Common Stock issued upon
exercise of this option that occurs within two (2) years after
the date of grant of the option hereunder or within one (1) year
after such shares of Common Stock are transferred upon exercise
of this option; and
(iii) the Company (or a representative of the underwriters) may, in
connection with the first underwritten registration of the
offering of any securities of the Company under the Act, require
that you do not sell or otherwise transfer or dispose of any
shares of Common Stock or other securities of the Company during
such period (not to exceed one hundred fifty (150) days)
following the effective date (the "Effective Date") of the
registration statement of the Company filed under the Act as may
be requested by the Company or the representative of the
underwriters; provided, however, that such restriction shall
apply only if, on the Effective Date, you are an officer,
director, or owner of more than one percent (1%) of the
outstanding securities of the Company. For purposes of this
restriction, you will be deemed to own securities which (i) are
owned directly or indirectly by you, including securities held
for your benefit by nominees, custodians, brokers or pledgees;
(ii) may be acquired by you within sixty (60) days of the
Effective Date; (iii) are owned directly or indirectly, by or for
your brothers or sisters (whether by whole or half blood),
spouse, ancestors and lineal descendants; or (iv) are owned,
directly or indirectly, by or for a corporation, partnership,
estate or trust of which you are a shareholder, partner or
beneficiary but only to the extent of your proportionate interest
therein as a shareholder, partner or beneficiary thereof. You
further agree that the Company may impose stop-transfer
instructions with respect to securities subject to the foregoing
restrictions until the end of such period.
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<PAGE>
Incentive Stock Option Agreement
Page 6
7. This option is not transferable, except by will or by the laws of
descent and distribution, and is exercisable during your life only by
you.
8. This option is not an employment contract and nothing in this option
shall be deemed to create in any way whatsoever any obligation on your
part to continue in the employ of the Company, or of the Company to
continue your employment with the Company.
9. Any notices provided for in this option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you
at the address specified below or at such other address as you
hereafter designate by written notice to the Company.
10. This option is subject to all the provisions of the Plan, a copy of
which is attached hereto and its provisions are hereby made a part of
this option, including without limitation the provisions of paragraph
5 of the Plan relating to option provisions, and is further subject to
all interpretations, amendments, rules and regulations which may from
time to time be promulgated and adopted pursuant to the Plan. In the
event of any conflict between the provisions of this option and those
of the Plan, the provisions of the Plan shall control; provided,
however, that you shall be entitled to receive stock options on
additional shares of the Corporation's common stock to protect you
against dilution of your share holding to the full extent provided by
your Employment Agreement with the Company.
Dated as of the ____ day of ___________, 19__.
Very truly yours,
AASTROM BIOSCIENCES, INC.
By:
--------------------------------------
Duly authorized on behalf of
the Board of Directors.
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<PAGE>
Incentive Stock Option Agreement
Page 7
The undersigned:
a. Acknowledges receipt of the foregoing and the attachments
referenced therein and understands that all rights and
liabilities with respect to this option are set forth in the
option and the Plan; and
b. Acknowledges that as of the date of grant of this option, it sets
forth the entire understanding between the undersigned optionee
and the Company and its affiliates regarding the acquistion of
stock in the Company and supersedes all prior oral and written
agreements on that subject.
-------------------------
OPTIONEE
Address:
Attachment:
1989 Stock Option Plan
Stock Transfer Restriction and Buy-Out Agreement
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