SYMBOLLON CORPORATION
STOCK OPTION AGREEMENT
UNDER 1993 STOCK OPTION PLAN
INCENTIVE STOCK OPTION
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AGREEMENT entered into by and between Symbollon Corporation, a Delaware
corporation with its principal place of business in Framingham, Massachusetts
(together with its subsidiaries, if any, the "Company"), and the undersigned
employee of the Company (the "Optionee").
A. The Company desires to grant the Optionee an incentive stock option
under the Company's 1993 Stock Option Plan (the "Plan") to acquire shares of the
Company's Class A Common Stock, par value $.001 per share (the "Shares").
B. The Plan provides that each option is to be evidenced by an option
agreement, setting forth the terms and conditions of the option.
ACCORDINGLY, in consideration of the premises and of the mutual
covenants and agreements contained herein, the Company and the Optionee hereby
agree as follows:
1. Grant of Option.
The Company hereby grants to the Optionee an incentive stock option
(the "Option") to purchase all or any part of an aggregate of the number of
Shares shown at the end of this Agreement on the terms and conditions
hereinafter set forth. The option is intended to be treated as an incentive
stock option under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code").
2. Purchase Price.
The purchase price ("Purchase Price") for the Shares covered by the
Option shall be the dollar amount per Share shown at the end of this Agreement.
3. Time of Exercise of Option.
Subject to the provisions of Section 4 hereof, the Option shall vest
and become exercisable one-third (1/3) annually on each of the first three
anniversaries of this Agreement. To the extent the Option is not exercised by
the Optionee when it becomes exercisable, it shall not expire, but shall be
carried forward and shall be exercisable, on a cumulative basis, until the
Expiration Date, as hereinafter defined.
4. Term of Exercisability; Extent of Exercisability.
(a) Term of Exercisability.
(i) Each Option shall expire on the date shown at the end
of this Agreement (the "Expiration Date"), as
determined by the Board of Directors of the Company
(the "Board"), which shall not be more than ten (10)
years from the date of the granting thereof, subject
to earlier termination as herein provided.
(ii) Except as otherwise provided in this Section 4, if
the Optionee's employment by the Company is
terminated, the Option granted to the Optionee
hereunder shall terminate and be no longer
exercisable on the earlier of (i) ninety days after
the date the Optionee's employment by the Company is
terminated, or (ii) the date on which the Option
expires by its terms.
(iii) If the Optionee's employment is terminated by the
Company for cause or because the Optionee is in
breach of any employment agreement, such Option will
terminate and be no longer exercisable on the date
the Optionee's employment is terminated by the
Company.
(iv) If the Optionee's employment is terminated by the
Company because the Optionee has become permanently
disabled (within the meaning of Section 22(e)(3) of
the Code), such Option shall terminate and be no
longer exercisable on the earlier of (i) one year
after the date such Optionee's employment by the
Company is terminated, or (ii) the date on which the
Option expires by its terms.
(v) In the event of the death of the Optionee, the Option
granted to such Optionee shall terminate and be no
longer exercisable on the earlier of (i) one year
after the date of death of such Optionee, or (ii) the
date on which the Option expires by its terms.
(b) Extent of Exercisability.
(i) Except as provided below, if the Optionee's
employment by the Company is terminated, the Option
granted to the Optionee hereunder shall be
exercisable only to the extent that the right to
purchase Shares under such Option had vested on the
date the Optionee's employment by the Company is
terminated.
(ii) If the Optionee's employment is terminated by the
Company because he or she has become permanently
disabled, as defined above, the Option granted to the
Optionee hereunder shall be immediately exercisable
as to the full number of Shares covered by such
Option, whether or not under the provisions of
Section 3 hereof such Option was otherwise
exercisable as of the date of disability.
(iii) In the event of the death of the Optionee, the
Option granted to such Optionee may be immediately
exercised to the full number of Shares covered
thereby, whether or not under the provisions of
Section 3 hereof the Optionee was entitled to do so
at the date of his or her death, by the executor,
administrator or personal representative of such
Optionee, or by any person or persons who acquired
the right to exercise such Option by bequest or
inheritance or by reason of the death of such
Optionee.
5. Manner or Exercise of Option.
(a) To the extent that the right to exercise the Option has vested and
is in effect, the Option may be exercised in full or in part by giving written
notice to the Company stating the number of Shares exercised and accompanied by
payment in full for such Shares. No partial exercise may be made for less than
one hundred (100) full Shares. Payment may be either wholly in cash or in whole
or in part in shares of the Company's common stock already owned by the person
exercising the Option, valued at fair market value as of the date of exercise;
provided, however, that payment of the exercise price by delivery of shares of
the Company's common stock already owned by the person exercising the Option may
be made only if such payment does not result in a charge to earnings for
financial accounting purposes as determined by the Board. Upon such exercise,
delivery of a certificate for paid-up, non-assessable Shares shall be made at
the principal office of the Company to the person exercising the Option, not
less than thirty (30) and not more than ninety (90) days from the date of
receipt of the notice by the Company.
(b) The Company shall at all times during the term of the Option
reserve and keep available such number of Shares as will be sufficient to
satisfy the requirements of the Option.
6. Non-Transferability.
The right of the Optionee to exercise the Option shall not be
assignable or transferable by the Optionee otherwise than by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act,
or the rules thereunder, and the Option may be exercised during the lifetime of
the Optionee only by him or her. The Option shall be null and void and without
effect upon the bankruptcy of the Optionee or upon any attempted assignment or
transfer, except as hereinabove provided, including without limitation any
purported assignment, whether voluntary or by operation of law, pledge,
hypothecation or other disposition contrary to the provisions hereof, or levy of
execution, attachment, trustee process or similar process, whether legal or
equitable, upon the Option.
7. Representation Letter and Investment Legend
(a) In the event that for any reason the Shares to be issued upon
exercise of the Option shall not be effectively registered under the Securities
Act of 1933, as amended (the "1933 Act"), upon any date on which the Option is
exercised in whole or in part, the person exercising the Option shall give a
written representation to the Company in the form attached hereto as Exhibit 1
and the Company shall place an "investment legend", so-called, as described in
Exhibit 1, upon any certificate for the Shares issued by reason of such
exercise.
(b) The Company shall be under no obligation to qualify Shares or to
cause a registration statement or a post-effective amendment to any registration
statement to be prepared for the purposes of covering the issue of Shares.
8. Adjustments on Changes in Capitalization.
Adjustments on changes in capitalization and the like shall be made in
accordance with the Plan, as in effect on the date of this Agreement.
9. No Special Employment Rights.
Nothing contained in the Plan or this Agreement shall be construed or
deemed by any person under any circumstances to bind the Company to continue the
employment of the Optionee for the period within which this Option may be
exercised. However, during the period of the Optionee's employment, the Optionee
shall render diligently and faithfully the services which are assigned to the
Optionee from time to time by the Board or by the executive officers of the
Company and shall at no time take any action which directly or indirectly would
be inconsistent with the best interests of the Company.
10. Rights as a Shareholder.
The Optionee shall have no rights as a shareholder with respect to any
Shares which may be purchased by exercise of this Option unless and until a
certificate or certificates representing such Shares are duly issued and
delivered to the Optionee. Except as otherwise expressly provided in the Plan,
no adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
11. Withholding Taxes.
Whenever Shares are to be issued upon exercise of this Option, the
Company shall have the right to require the Optionee to remit to the Company any
amount sufficient to satisfy all Federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for such
Shares. The Company may agree to permit the Optionee to withhold Shares
purchased upon exercise of this Option to satisfy the above-mentioned
withholding requirement; provided, however, no such agreement may be made by an
Optionee who is an officer or director within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended, except pursuant to a standing
election to so withhold Shares purchased upon exercise of an Option, such
election to be made in the form set forth in Exhibit 2 hereto and to be made not
less than six (6) months prior to the date of such exercise. Such election may
be revoked by the Optionee only upon six (6) months prior written notice to the
Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed, and the Optionee has hereunto set his or her hand and seal, all as of
the day and year first above written.
SYMBOLLON CORPORATION OPTIONEE
By:______________________________ _______________________________
Title: Signature
Name:__________________________
(Printed)
Address:________________________
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Social Security Number
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Number of Shares
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Purchase Price Per Share
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Expiration Date
EXHIBIT 1
TO STOCK OPTION AGREEMENT
Gentlemen:
In connection with the exercise by me as to [ ] shares of Class A
Common Stock, $.001 per share par value (the "Common Stock" or the "shares"), of
Symbollon Corporation (the "Company") under the incentive stock option agreement
dated ---------------------------, granted to me under the 1993 Stock Option
Plan, I hereby acknowledge that I have been informed as follows:
1. The Common Stock of the Company to be issued to me pursuant to the
exercise of said option have not been registered under the securities Act of
1933 (the "1933 Act"), and accordingly, must be held indefinitely unless such
shares are subsequently registered under the 1933 Act, or an exemption from such
registration is available.
2. Routine sales of securities made in reliance upon Rule 144 under the
1933 Act can be made only after the holding period and in limited amounts in
accordance with the terms and conditions provided by that Rule, and in any sale
to which that Rule is not applicable, registration or compliance with some other
exemption under the 1933 Act will be required.
3. The Company is under no obligation to me to register the shares or
to comply with any such exemptions under the 1933 Act.
4. The availability of Rule 144 is dependent upon adequate current
public information with respect to the Company being available and, at the time
that I may desire to make a sale pursuant to the Rule, the Company may neither
wish nor be able to comply with such requirement.
In consideration of the issuance of certificates for the shares to me,
I hereby represent and warrant that I am acquiring such shares for my own
account for investment, and that I will not sell, pledge or transfer such shares
in the absence of an effective registration statement covering the same, except
as permitted by the provisions of Rule 144, if applicable, or some other
applicable exemption under the 1933 Act. In view of this representation and
warranty, I agree that there may be affixed to the certificates for the shares
to be issued to me, and to all certificates issued hereafter representing such
shares (until in the opinion of counsel, which opinion must be reasonably
satisfactory in form and substance to counsel for the Company, it is no longer
necessary or required) a legend as follows:
"The shares of common stock represented by this certificate
have not been registered under the Securities Act of 1933, as
amended (the "Act"), and were acquired by the registered
holder, pursuant to a representation and warranty that such
holder was acquiring such shares for his own account and for
investment, with no intention to transfer or dispose of the
same, in violation of the registration requirements of the
Act. These shares may not be sold, pledged, or transferred in
the absence of an effective registration statement under the
Act, or an opinion of counsel, which opinion is reasonably
satisfactory to counsel to the Company, to the effect that
registration is not required under the Act."
I further agree that the Company may place a stop order with its
Transfer Agent, prohibiting the transfer of such shares, so long as the legend
remains on the certificates representing the shares.
Very truly yours,
EXHIBIT 2
TO STOCK OPTION AGREEMENT
Gentlemen:
The undersigned Optionee hereby elects and agrees that, whenever the
undersigned exercises a stock option (including any options which now or may
hereafter be granted), the Company shall withhold from the shares issuable upon
such exercise, such number of shares as is equal in value to the federal and
state withholding taxes due upon such exercise. The undersigned further
acknowledges and agrees that this election may not be revoked without six (6)
months prior written notice to the Company.
OPTIONEE:
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Signature
Name:_____________________________
(Printed)
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Social Security Number