BIOHEART, INC.
INCENTIVE STOCK OPTION AGREEMENT
FOR
1. Grant
of Option . BIOHEART, INC. (the “Company”) hereby
grants, as of , (the “Date
of Grant”),
to (the
“Optionee”) an option (the “Option”) to
purchase up to
shares of the Company’s Common Stock, $.01 par value (the
“Stock”), at an exercise price per share equal to
$ (the
“Exercise Price”). The Option shall be subject to the
terms and conditions set forth herein. The Option was issued
pursuant to the Company’s 1999 Officers and Employees Stock
Option Plan (the “Plan”), which is incorporated herein
for all purposes. The Option shall be treated by the Company as an
incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the
“Code”) and not a nonqualified stock option, if and to
the extent that the limitations under Section 4(b) of the Plan and
Section 422(d) of the Code, are not exceeded. The Optionee hereby
acknowledges receipt of a copy of the Plan and agrees to be bound
by all of the terms and conditions hereof and thereof.
2.
Definitions . Unless otherwise provided herein, terms used
herein that are defined in the Plan and not defined herein shall
have the meanings attributed thereto in the Plan.
3.
Exercise Schedule . Except as otherwise provided in
Section 6 or 12 of this Agreement, or in the Plan, the Option
is exercisable in installments as provided below, which shall be
cumulative. To the extent that the Option has become exercisable
with respect to a percentage of Shares as provided below, the
Option may thereafter be exercised by the Optionee, in whole or in
part, at any time or from time to time prior to the expiration of
the Option as provided herein. The following table indicates each
date (the “Vesting Date”) upon which the Optionee shall
be entitled to exercise the Option with respect to the percentage
of Shares granted as indicated beside the date, provided that the
Optionee has been continuously employed by the Company or a
Subsidiary through and on the applicable Vesting Date:
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Percentage of Shares
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Vesting Date
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25%
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first anniversary of Date of
Grant
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25%
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second anniversary of Date of
Grant
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25%
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third anniversary of Date of
Grant
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25%
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fourth anniversary of Date of
Grant
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Except as
otherwise specifically provided herein, there shall be no
proportionate or partial vesting in the periods prior to each
Vesting Date, and all vesting shall occur only on the appropriate
Vesting Date. Upon the Optionee’s termination of employment
with the Company and its Subsidiaries, any unvested portion of the
Option shall terminate and be null and void.
4. Method
of Exercise . This Option shall be exercisable in whole or in
part in accordance with the exercise schedule set forth in
Section 3 hereof by written notice which shall state the
election to exercise the Option, the number of Shares in respect of
which the Option is being exercised, and such other representations
and agreements as to the holder’s investment intent with
respect to such Shares as may be required by the Company pursuant
to the provisions of the Plan. Such written notice shall be signed
by the Optionee and shall be delivered in person or by certified
mail to the Chief Financial Officer of the Company. The written
notice shall be accompanied by payment of the Exercise Price. This
Option shall be deemed to be exercised after (a) receipt by
the Company of such written notice accompanied by the Exercise
Price, and (b) arrangements that are satisfactory to the Board or
the Committee in its sole discretion have been made for
Optionee’s payment to the Company of the amount that is
necessary to be withheld in accordance with applicable Federal or
state withholding requirements. No Shares will be issued pursuant
to the Option unless and until such issuance and such exercise
shall comply with all relevant provisions of applicable law,
including the requirements of any stock exchange upon which the
Stock then may be traded.
5. Method
of Payment . Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the
Optionee: (a) cash; (b) check; (c) with Shares that have
been held by the Optionee for at least 6 months (or such other
Shares as the Company determines will not cause the Company to
recognize for financial accounting purposes a charge for
compensation expense); or (d) such other consideration or in
such other manner as may be determined by the Board or the
Committee in its absolute discretion.
6.
Termination of Option .
(a) Any
unexercised portion of the Option shall automatically and without
notice terminate and become null and void at the time of the
earliest to occur of:
(i) three
(3) months after the date on which the Optionee’s
employment with the Company and its Subsidiaries is terminated for
any reason other than by reason of (A) Cause, which, solely
for purposes of this Agreement, shall mean the termination of the
Optionee’s employment by reason of the Optionee’s
willful misconduct or gross negligence, (B) a mental or
physical disability (within the meaning of Section 22(e) of the
Internal Revenue Code of 1986, as amended) of the Optionee as
determined by a medical doctor satisfactory to the Committee, or
(C) death;
(ii) immediately
upon the termination of the Optionee’s employment with the
Company and its Subsidiaries for Cause;
(iii) twelve
(12) months after the date on which the Optionee’s
employment with the Company and its Subsidiaries is terminated by
reason of a mental or physical disability (within the meaning of
Section 22(e) of the Internal Revenue Code of 1986, as amended) as
determined by a medical doctor satisfactory to the
Committee;
(iv) twelve
(12) months after the date of termination of the
Optionee’s employment with the Company and its Subsidiaries
by reason of the death of the Optionee (or if later, three months
after the date on which the Optionee shall die if such death shall
occur during the one year period specified in paragraph
(iii) of this Section 6);
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(v) immediately
in the event that the Optionee shall file any lawsuit or
arbitration claim against the Company or any Subsidiary, or any of
their respective officers, directors or shareholders of the
Company;
(vi) the
tenth (10 th
) anniversary of the Date of Grant;
or
(vii) termination
under Section 12 hereof.
(b) To the
extent not previously exercised, (i) the Option shall
terminate immediately in the event of (1) the liquidation or
dissolution of the Company, or (2) any reorganization, merger,
consolidation or other form of corporate transaction in which the
Company does not survive, unless the successor corporation, or a
parent or subsidiary of such successor corporation, assumes the
Option or substitutes an equivalent option or right pursuant to
Section 10(c) of the Plan, and (ii) the Committee or the Board in
its sole discretion may by written notice (“cancellation
notice”) cancel, effective upon the consummation of any
corporate transaction described in Subsection 8(b)(i) of the Plan
in which the Company does survive, any Option that remains
unexercised on such date. The Committee or the Board shall give
written notice of any proposed transaction referred to in this
Section 6(b) a reasonable period of time prior to the closing date
for such transaction (which notice may be given either before or
after approval of such transaction), in order that the Optionee may
have a reasonable period of time prior to the closing date of such
transaction within which to exercise the Option if and to the
extent that it then is exercisable (including any portion of the
Option that may become exercisable upon the closing date of such
transaction). The Optionee may condition his exercise of the Option
upon the consummation of a transaction referred to in this
Section 6(b).
7.
Transferability . The Option granted hereby is not
transferable otherwise than by will or under the applicable laws of
descent and distribution, and during the lifetime of the Optionee
the Option shall be exercisable only by the Optionee or the
Optionee’s guardian or legal representative. In addition, the
Option shall not be assigned, negotiated, pledged or hypothecated
in any way (whether by operation of law or otherwise), and the
Option shall not be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, negotiate, pledge or
hypothecate the Option, or in the event of any levy upon the Option
by reason of execution, attachment or similar process contrary to
the provisions hereof, the Option shall immediately become null and
void.
8. No
Rights of Stockholders . Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the
rights and privileges of, a stockholder of the Company with respect
to any shares of Stock purchasable or issuable upon the exercise of
the Option, in whole or in part, prior to the date of exercise of
the Option.
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9.
Stockholders Agreements; Restrictions.
(a)
Stockholders Agreement. Unless the requirements under this
sentence are waived in writing by the Company, the Optionee shall
not be permitted to exercise the Option or to be issued any shares
of Stock thereunder unless and until the Optionee executes and
delivers to the Company the form of stockholders agreement then in
effect among the Company and its stockholders (which agreement may
be the stockholders agreement utilized in connection with the
Company’s initial private offering to investors) (the
“Stockholders Agreement”). In addition to any rights or
obligations of Optionee under such Stockholders Agreement, the
Optionee is and shall be subject to the following provisions of
this Section 9 and the other provisions of this Option
Agreement.
(b)
Restrictions While Stock is Not Registered; Restricted
Shares . The shares of Stock subject to the Option specified in
Section 1 and (i) all shares of the Company’s
capital stock received as a dividend or other distribution upon
such shares, and (ii) all shares of capital stock or other
securities of the Company into which such shares may be changed or
for which such shares shall be exchanged, whether through
reorganization, recapitalization, stock split-ups or the like,
shall be subject to the provisions of this Section 9 at all
times, and only at those times, that shares of the Company’s
Common Stock are not Publicly-Held (such times during which the
Stock is not so Publicly-Held hereinafter being referred to as the
“Restricted Period”) and are during the Restricted
Period hereinafter referred to as “Restricted Shares.”
For purposes of this Agreement, “Publicly-Held” means
that the Common Stock of the Company, or the stock of any successor
company into which the Common Stock is substituted or exchanged, is
registered pursuant to Section 12(b) or 12(g) of the Securities
Exchange Act.
(c) No
Sale or Pledge of Restricted Shares . Except as otherwise
provided herein, the Optionee agrees and covenants that during the
Restricted Period he or she will not sell, pledge, encumber or
otherwise transfer or dispose of, and will not permit to be sold,
encumbered, attached or otherwise disposed of or transferred in any
manner, either voluntarily or by operation of law (all hereinafter
collectively referred to as “transfers”), all or any
portion of the Restricted Shares or any interest therein except
in
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