Exhibit 10.1
HARVARD APPARATUS, INC.
1996 STOCK OPTION AND GRANT PLAN
1. PURPOSE
This Stock Option and Grant Plan (the "Plan") is intended as a
performance incentive for officers, employees, directors, consultants and other
key persons of Harvard Apparatus, Inc. (the "Company") or its Subsidiaries (as
hereinafter defined) to enable the persons to whom options are granted (the
"Optionees") or to whom shares of common stock are granted (the "Grantees") to
acquire or increase a proprietary interest in the success of the Company. The
Company intends that this purpose will be effected by the granting of "incentive
stock options" ("Incentive Options") as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), nonqualified stock options
("Nonqualified Options") and outright grants of common stock under the Plan. The
term "Subsidiaries" includes any corporations in which stock possessing fifty
percent or more of the total combined voting power of all classes of stock is
owned directly or indirectly by the Company.
2. OPTIONS TO BE GRANTED AND ADMINISTRATION
(a) Options granted under the Plan may be either Incentive Options or
Nonqualified Options, and shall be designated as such at the time of grant. To
the extent that any option intended to be an Incentive Option shall fail to
qualify as an "incentive stock option" under the Code, such option shall be
deemed to be a Nonqualified Option.
(b) The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company (the "Board of Directors") or such other
committee as may from time to time be chosen by the Board of Directors (the
"Option Committee").
(c) Subject to the terms and conditions of the Plan, the Option
Committee shall have the power:
(i) To determine from time to time the options or stock to be
granted to eligible persons under the Plan, to prescribe the terms and
provisions (which need not be identical) of options or stock granted
under the Plan to such persons and to approve the grant of options or
stock, as the case may be;
(ii) To construe and interpret the Plan and grants thereunder
and to establish, amend, and revoke rules and regulations for
administration of the Plan. In this connection, the Option Committee
may correct any defect or supply any omission, or reconcile any
inconsistency in the Plan, in any option agreement, or in any related
agreements, in the manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective. All decisions and
determinations by the Option Committee in the exercise of this power
shall be final and binding upon the Company, the Optionees and the
Grantees;
(iii) to condition the grant of any award (or, in the case of
stock options, the exercise of any stock option) on the entering into
of an agreement by the recipient thereof, which such agreement may
contain such terms and conditions as the Option Committee shall
determine, including, without limitation, the granting of rights of
first refusal, drag-along rights and voting requirements with respect
to any Stock underlying any such award; and
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(iv) Generally, to exercise such powers and to perform such
acts as are deemed necessary or expedient to promote the best interests
of the Company with respect to the Plan.
3. STOCK
(a) The stock granted under the Plan, or subject to the options granted
under the Plan, shall be shares of the Company's authorized but unissued common
stock, par value $.01 per share (the "Common Stock"). The total number of shares
that may be issued under the Plan shall not exceed an aggregate of 113,620
shares of Common Stock (such number shall be subject to adjustment as provided
in Section 7 hereof).
(b) Whenever any outstanding option under the Plan expires, is
cancelled or is otherwise terminated (other than by exercise), the shares of
Common Stock allocable to the unexercised portion of such option may again be
the subject of options under the Plan or grants of Common Stock.
4. ELIGIBILITY
(a) Incentive Options may be granted only to officers or other
employees of the Company or its Subsidiaries, including members of the Board of
Directors who are also employees of the Company or its Subsidiaries.
Nonqualified Options may be granted to officers or other employees of the
Company or its Subsidiaries, members of the Board of Directors and consultants
and other key persons who provide services to the Company or its Subsidiaries
(regardless of whether they are also employees). Grants of Common Stock may be
made to any officer, director, employee, consultant or other key person of the
Company.
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(b) No person shall be eligible to receive any Incentive Option under
the Plan if, at the date of grant, such person beneficially owns stock
representing in excess of 10% of the voting power of all outstanding capital
stock of the Company (a "Ten Percent Stockholder") unless notwithstanding
anything in this Plan to the contrary (i) the purchase price for the Common
Stock subject to such option is at least 110% of the fair market value of such
stock at the time of the grant and (ii) the option by its terms is not
exercisable more than five (5) years from the date of grant thereof.
(c) Notwithstanding any other provision of the Plan, to the extent that
the aggregate fair market value of the stock with respect to which Incentive
Options are exercisable for the first time by any individual during any calendar
year (under all plans of the Company and its parent and Subsidiaries) exceeds
$100,000, the options attributable to the excess over $100,000 shall be treated
as Nonqualified Options under the Plan. Such annual limitation shall be applied
by taking Incentive Options into account in the order in which they were
granted.
5. TERMS OF THE OPTION AGREEMENTS
Subject to the terms and conditions of the Plan, each option agreement
shall contain such provisions as the Option Committee shall from time to time
deem appropriate. Option agreements need not be identical, but each option
agreement by appropriate language shall include the substance of all of the
following provisions:
(a) EXPIRATION; TERMINATION OF EMPLOYMENT. Notwithstanding any other
provision of the Plan or of any option agreement, each option shall expire on
the date specified in the option agreement, which date in the case of any
Incentive Option shall not be later than the tenth (10th) anniversary of the
date on which the option was granted; provided, however, that
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if such Incentive Option is held by a Ten Percent Stockholder, the expiration
date of such Incentive Option shall not be later than five (5) years from the
date of grant thereof. If an Optionee's employment or service as a director with
the Company and its Subsidiaries terminates for any reason, the Option Committee
may (in addition to any terms and provisions contained in an option grant) in
its sole and absolute discretion provide, at any time, that any outstanding
option granted to such Optionee under the Plan shall be exercisable for not more
than three (3) months following termination of employment, subject to the
expiration date of such option.
(b) MINIMUM SHARES EXERCISABLE. The minimum number of shares with
respect to which an option may be exercised at any one time shall be one hundred
(100) shares, or such lesser number as is subject to exercise under the option
at the time, provided that no fractional shares may be issued.
(c) EXERCISE. Each option shall be exercisable in such installments
(which need not be equal) and at such times as may be designated by the Option
Committee. To the extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the date the option expires.
(d) PURCHASE PRICE. The purchase price per share of Common Stock
subject to each option shall be determined by the Option Committee; provided,
however, that the purchase price per share of Common Stock subject to each
Incentive Option shall be not less than the fair market value of the Common
Stock on the date such Incentive Option is granted. For the purposes of the
Plan, the fair market value of the Common Stock shall be determined in good
faith by the Option Committee; provided, however, that (i) if the Common Stock
is admitted to
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quotation on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") on the date the option is granted, the fair market value shall
not be less than the average of the highest bid and lowest asked prices of the
Common Stock on NASDAQ reported for such date, or (ii) if the Common Stock is
admitted to trading on a national securities exchange or the NASDAQ National
Market System on the date the option is granted, the fair market value shall not
be less than the closing price reported for the Common Stock on such exchange or
system for such date or, if no sales were reported for such date, for the last
date preceding such date for which a sale was reported.
(e) RIGHTS OF OPTIONEES. No Optionee shall be deemed for any purpose to
be the owner of any shares of Common Stock subject to any option unless and
until (i) the option shall have been exercised pursuant to the terms thereof,
(ii) all requirements under applicable law and regulations shall have been
complied with to the satisfaction of the Company, (iii) the Company shall have
issued and delivered the shares to the Optionee, and (iv) the Optionee's name
shall have been entered as a stockholder of record on the books of the Company.
Thereupon, the Optionee shall have full voting, dividend and other ownership
rights with respect to such shares of Common Stock.
(f) TRANSFER. No option granted hereunder shall be transferable by the
Optionee other than by will or by the laws of descent and distribution, and such
option may be exercised during the Optionee's lifetime only by the Optionee, or
his or her guardian or legal representative.
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5A. TERMS OF STOCK GRANT
Subject to the terms and conditions of this Plan, the Option Committee
may grant (or sell at a purchase price determined by such committee) shares of
Common Stock to eligible participants under this Plan. Such grants or issuances
may be on such terms as the Option Committee may determine, including
restrictions on transfer, rights of first refusal and repurchase provisions
based upon continuing employment and/or the achievement of performance goals or
other conditions. In no event may Common Stock issued or granted under this Plan
(other than as a result of the exercise of Options issued under this Plan) be
transferred or sold within six months of the date of issuance thereof.
6. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE
(a) Any option granted under the Plan may be exercised by the Optionee
in whole or, subject to Section 5(b) hereof, in part by delivering to the
Company on any business day a written notice specifying the number of shares of
Common Stock the Optionee then desires to purchase (the "Notice"). As a
condition precedent to the exercise of any option (i) prior to the closing date
of the Company's first underwritten public offering of the Common Stock, on or
prior to the exercise date, the Optionee shall execute and deliver a Joinder
Agreement with substantially the terms attached hereto as EXHIBIT A, which may
be amended from time to time, and/or such other agreement containing such terms
and provisions as any option grant shall require as a condition to exercise, and
(ii) the Optionee shall pay or make arrangements for the payment of all taxes to
be withheld, in accordance with Section 9 of the Plan.
(b) Payment for the shares of Common Stock purchased pursuant to the
exercise of an option shall be made either: (i) in cash, or by certified or bank
check or other payment
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acceptable to the Company, equal to the option exercise price for the number of
shares specified in the Notice (the "Total Option Price"); (ii) if authorized by
the applicable option agreement and if permitted by law, by delivery of shares
of Common Stock that the optionee may freely transfer having a fair market
value, determined by reference to the provisions of Section 5(d) hereof, equal
to or less than the Total Option Price, plus cash in an amount equal to the
excess, if any, of the Total Option Price over the fair market value of such
shares of Common Stock; or (iii) by the Optionee delivering the Notice to the
Company together with irrevocable instructions to a broker to promptly deliver
the Total Option Price to the Company in cash or by other method of payment
acceptable to the Company; provided, however, that the Optionee and the broker
shall comply with such procedures and enter into such agreements of indemnity or
other agreements as the Company shall prescribe as a condition of payment under
this clause (iii).
(c) The delivery of certificates representing shares of Common Stock to
be purchased pursuant to the exercise of an option will be contingent upon the
Company's receipt of the Total Option Price and of any written representations
from the Optionee required by the Option Committee, and the fulfillment of any
other requirements contained in the option agreement or applicable provisions of
law.
7. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
(a) If the shares of the Company's Common Stock as a whole are
increased, decreased, changed into or exchanged for a different number or kind
of shares or securities of the Company, whether through merger, consolidation,
reorganization, recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change
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in corporate structure or the like, an appropriate and proportionate adjustment
shall be made in the number and kind of shares subject to the Plan, and in the
number, kind, and per share exercise price of shares subject to unexercised
options or portions thereof granted prior to any such change. In the event of
any such adjustment in an outstanding option, the Optionee thereafter shall have
the right to purchase the number of shares under such option at the per share
price, as so adjusted, which the Optionee could purchase at the total purchase
price applicable to the option immediately prior to such adjustment.
(b) Adjustments under this Section 7 shall be determined by the Option
Committee and such determinations shall be conclusive and binding on all
persons. The Option Committee shall have the discretion and power in any such
event to determine and to make effective provision for acceleration of the time
or times at which any option or portion thereof shall become exercisable. No
fractional shares of Common Stock shall be issued under the Plan on account of
any adjustment specified above.
8. EFFECT OF CERTAIN TRANSACTIONS
In the case of (i) the dissolution or liquidation of the Company, (ii)
a reorganization, merger, consolidation or other business combination in which
the Company is acquired by another entity (other than a holding company formed
by the Company) or in which the Company is not the surviving entity, or (iii)
the sale of all or substantially all of the assets of the Company to another
entity, the Plan and the options issued hereunder shall terminate upon the
effectiveness of any such transaction or event, unless provision is made in
connection with such transaction for the assumption of options theretofore
granted, or the substitution for such options of new options of the successor
entity or parent thereof, with appropriate adjustment as
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to the number and kind of shares and the per share exercise price, as provided
in Section 7. In the event of such termination, all outstanding vested options
shall be exercisable for at least fifteen (15) days prior to the date of such
termination.
9. TAX WITHHOLDING
Each Optionee shall, no later than the exercise date of any option, pay
to the Company, or make arrangements satisfactory to the Option Committee
regarding payment of any Federal, state, or local taxes of any kind required by
law to be withheld with respect to such income. The Company and its Subsidiaries
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Optionee.
10. CONDITION TO GRANTS OF COMMON STOCK
As a condition precedent to the grant of Common Stock to any Grantee
under the Plan prior to the closing date of the Company's first underwritten
public offering of the Common Stock, the Grantee shall execute and deliver a
Joinder Agreement with substantially the terms attached hereto as EXHIBIT A,
which may be amended from time to time, and/or such other agreement containing
such terms and provisions as the Option Committee shall require as a condition
to the grant. The Option Committee may also impose such other terms and
conditions on the grant of any Common Stock under the Plan as it may determine.
11. AMENDMENT OF THE PLAN
The Board of Directors may discontinue the Plan or amend the Plan at
any time, and from time to time, subject to any required regulatory approval and
the limitation that, except as provided in Sections 7 and 8 hereof, no amendment
shall be effective unless approved by the stockholders of the Company in
accordance with applicable law and regulations at an annual or
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special meeting held within twelve months before or after the date of adoption
of such amendment, where such amendment will:
(a) increase the number of shares of Common Stock as to which
options may be granted under the Plan;
(b) change in substance Section 4 hereof relating to eligibility
to participate in the Plan;
(c) change the minimum option exercise price; or
(d) otherwise materially increase the benefits accruing to
participants under the Plan.
Except as provided in Sections 7 and 8 hereof, rights and obligations
under any option granted before any amendment of the Plan shall not be altered
or impaired by such amendment, except with the consent of the Optionee.
12. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board of Directors nor the
submission of the Plan to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board of Directors to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock or stock options otherwise than under
the Plan, and such arrangements may be either applicable generally or only in
specific cases. Neither the Plan nor any option granted hereunder shall be
deemed to confer upon any employee any right to continued employment with the
Company or its Subsidiaries.
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13. GOVERNMENT AND OTHER REGULATIONS; GOVERNING LAW
(a) The obligation of the Company to sell and deliver shares of Common
Stock with respect to options granted under the Plan shall be subject to all
applicable laws, rules and regulations, including all applicable federal and
state securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Option Committee.
(b) The Plan shall be governed by Massachusetts law, except to the
extent that such law is preempted by federal law.
14. EFFECTIVE DATE OF PLAN; STOCKHOLDER APPROVAL
The Plan shall become effective upon the date that it is approved by
the Board of Directors of the Company; provided, however, that the Plan shall be
subject to the approval of the Company's stockholders in accordance with
applicable laws and regulations at an annual or special meeting held within
twelve (12) months of such effective date. No options granted under the Plan
prior to such stockholder approval may be exercised until such approval has been
obtained. No options may be granted under the Plan after the tenth anniversary
of the effective date of the Plan.
* * *
Approved by Board of Directors: May 29, 1996
Approved by Stockholders: May, 1996
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