NONTRANSFERABLE NON-QUALIFIED STOCK OPTION AGREEMENT dated as of
[
, ]
between Osteotech, Inc., and [_________________] (the
"Optionee",
which term as used
herein shall be deemed to include any successor to the
Optionee by will
or by the laws of descent and distribution, unless the
context shall otherwise require.)
WHEREAS, pursuant to the Company's 1991
Stock Option Plan (the "1991 Plan") the
Board of Directors of the Company approved the issuance to the Optionee,
effective as the date set forth above, of a
non-qualified option
to purchase up
to an aggregate of [ ] shares of Common
Stock, $.01 par value (the "Common
Stock"), of the Company at a price (the
"Option Price") of $[ ] per share, upon
the terms and conditions hereinafter
stated.
NOW,
THEREFORE,
in consideration of the mutual
premises and undertakings
hereinafter set forth, the parties hereto
agree as follows:
1. Option;
Option Price. The Company hereby grants to the Optionee the
option (the "Option") to purchase,
subject to the terms
and conditions of this
Agreement, [_______] shares of Common Stock
at an exercise price per share equal
to the Option Price. The Option is not
qualified for Federal income tax purposes
as an "incentive stock option" within the meaning of Section 422A of the
Internal Revenue Code of 1986, as amended
(the "Code").
2. Term.
The term (the "Option
Term") of the Option
shall commence on the
date of this Agreement and shall expire at 5:00
p.m. local time at the location
of the Company's principal executive offices ("local time") on the tenth
anniversary of such date, unless the Option shall have been
terminated earlier
in accordance with the terms hereof:
3. Time of
Exercise. Unless accelerated in the discretion of the Company
or
as otherwise provided herein, the Option shall become exercisable as to a
specified percentage of the shares
subject thereto, determined based on the
period of continuous employment of the Optionee through the applicable date
below, as follows:
SHARES FOR WHICH OPTION IS EXERCISABLE
DATE
PERCENTAGE
NUMBER
[1st anniversary of grant date]
25%
[ ]
[2nd anniversary of grant date]
25%
[ ]
[3 rd anniversary of grant date]
25%
[ ]
[4th anniversary of grant date]
25%
[ ]
4. Termination
of Option. (a) The unexercised portion of the Option issued
under this Agreement shall automatically terminate and shall become null
and
void and be of no further force or effect upon the first to occur of the
following:
(i) the expiration of the Option Term;
(ii) The expiration
of 12 months from the date of an Involuntary
Termination
provided, however, that the Option may be exercised only to the
extent that the
Optionee had the right to exercise
such Option as of
the
date of
termination of employment;
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<PAGE>
(iii) the expiration of three (3) months from the date of the
termination
of the Optionee's employment by the Company or any of its
subsidiaries,
unless such
termination is an
Involuntary
Termination or a
Termination
of Association provided, however, that the Option may be
exercised
only to the extent
that the Optionee
had the right to
exercise
such Option as
of the date of termination of employment;
(iv) upon the date of a Termination of Association;
(v) the effective
date of a corporate transaction as defined in
Section 10 of
the 1991 Plan to which
Section 10 of the 1991 Plan relating
to assumptions and substitutions of Options does not apply; provided,
however,
that an Optionee's
right to exercise any Option outstanding prior
to such
effective date shall
in all events be suspended during the period
commencing 10
days prior to the proposed effective date of such corporate
transaction
and ending on either the actual effective date of such
corporate
transaction or upon
receipt of notice from the Company that such
corporate
transaction will not in fact occur; and
(vi) except to the
extent permitted
by Section 10 of the
1991 Plan,
the date on
which such Option or
any part thereof
or right or
privilege
relating
thereto is transferred (otherwise than by will or the laws of
descent or
distribution),
assigned, pledged, hypothecated, attached or
otherwise
disposed of by the Optionee.
(b) As used in
this Agreement, the following definitions apply:
Termination for Exceptional Cause shall mean:
(i) the Optionee's willful misconduct with respect to the
business and affairs of the Company or any subsidiary thereof;
(ii) the Optionee's
gross neglect of duties or failure to act
which materially and adversely affects the business or affairs of
the
Company or any subsidiary thereof; or
(iii) the Employee's commission of an act involving embezzlement
or fraud or conviction for any felony.
"Involuntary
Termination" means a termination caused by death or
total disability, or by retirement.
"Termination of
Association"
shall
mean a Termination for
Exceptional Cause and/or a termination by the Company attributable to
a material breath by
the Optionee of an agreement with the Company or
a subsidiary thereof. The Board of Directors of the Company shall
have
the power to determine
what constitutes a
Termination of Association
and the date upon which such Termination of Association
occurs. Any
such determination
shall be final,
conclusive
and binding upon
the
Optionee.
(c) In the event of the dissolution or liquidation of the Company,
or
reorganization,
merger or consolidation in which the Company is not the
surviving
company, a sale of all
or substantially all of the assets of the
Company to
another person or
entity, or a
transaction in which all of the
stockholders
of the Company
exchange their Common Stock for cash and/or
securities,
the provisions of Section 10 of the 1991 Plan (or
similar
successor
provisions thereof) shall apply.
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<PAGE>
5. Procedure for Exercise. (a) The Option may be exercised,
in whole or
part (for the purchase of whole shares
only), by delivery of a written
notice
(the "Notice") from the Optionee to the Secretary
of the Company, which
Notice
shall:
(i) state that the Optionee elects to exercise the Option;
(ii) state the number of shares with respect to which the Optionee
is
exercising the
Option (the "Optioned Shares");
(iii) state the method of payment for the Optioned Shares pursuant to
Section
5(b);
(iv) in the event that the Option shall be exercised by any person
other than the
Optionee pursuant to Section 4(a)(ii), include appropriate
proof of the
right of such person to exercise the option;
(v) state the date upon which the Optionee desires to consummate the
purchase
of the Optioned Shares (which date must be prior to the
termination of
the Option and within 30 days of the date of delivery of the
Notice); and
(vi) include any
representation of the
Optionee required pursuant to
Section 8(b)
hereof.
(b) Payment of
the Option Price for
the Optioned
Shares shall be made
in
cash or by personal or certified check.
(c) The Company
shall be entitled to
require as a condition of delivery of
the Optioned Shares that the Optionee remit
or, in appropriate
cases, agree to
remit when due, an amount in cash
sufficient to satisfy all current or estimated
future Federal, state and local withholding tax
and employment tax requirements
relating hereto.
(d) Within 30 days of the exercise of the Option, the Optionee shall
deliver to the Company a copy of any
election filed by the Optionee with the
Internal Revenue Service under Section
83(b) of the Code.
6. No Rights as
S
