Document:

Exhibit 10.1

 

BIOSPHERE
MEDICAL, INC.

 

2006
STOCK INCENTIVE PLAN

 

1.             Purpose

 

The purpose of this 2006 Stock Incentive Plan (the “Plan”) of BioSphere
Medical, Inc., a Delaware  corporation
(the “Company”), is to advance the interests of the Company’s stockholders by
enhancing the Company’s ability to attract, retain and motivate persons who are
expected to make important contributions to the Company and by providing such
persons with equity ownership opportunities and performance-based incentives
that are intended to align their interests with those of the Company’s
stockholders.  Except where the context
otherwise requires, the term “Company” shall include any of the Company’s
present or future parent or subsidiary corporations as defined in
Sections 424(e) or (f) of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the “Code”) and any other
business venture (including, without limitation, joint venture or limited
liability company) in which the Company has a controlling interest, as
determined by the Board of Directors of the Company (the “Board”).

 

2.             Eligibility

 

All of the Company’s employees, officers, directors, consultants and
advisors are eligible to receive options, stock appreciation rights, restricted
stock, restricted stock units and other stock unit awards (each, an “Award”)
under the Plan.  Each person who receives
an Award under the Plan is deemed a “Participant”.

 

3.             Administration and Delegation

 

(a)           Administration by Board of
Directors.  The Plan will be
administered by the Board.  The Board
shall have authority to grant Awards and to adopt, amend and repeal such
administrative rules, guidelines and practices relating to the Plan as it shall
deem advisable.  The Board may construe
and interpret the terms of the Plan and any Award agreements entered into under
the Plan.  The Board may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or any
Award in the manner and to the extent it shall deem expedient to carry the Plan
into effect and it shall be the sole and final judge of such expediency.  All decisions by the Board shall be made in
the Board’s sole discretion and shall be final and binding on all persons
having or claiming any interest in the Plan or in any Award.  No director or person acting pursuant to the
authority delegated by the Board shall be liable for any action or
determination relating to or under the Plan made in good faith.

 

(b)           Appointment of Committees.  To the extent
permitted by applicable law, the Board may delegate any or all of its powers
under the Plan to one or more committees or subcommittees of the Board (a “Committee”).  During such time as the common stock,  $0.01 par
value per share, of the Company (the “Common Stock”) is registered under the
Securities Exchange Act of 1934 (the “Exchange Act”), the Board shall appoint
one such Committee of not less than two members, each member of which shall be
an “outside director” within the meaning of Section 162(m) of the
Code and a “non-employee director” as defined in Rule 16b-3 promulgated
under the Exchange Act.  All references
in the Plan to the “Board” shall mean the 

 

 

Board or a
Committee of the Board or the officers referred to in Section 3(c) to
the extent that the Board’s powers or authority under the Plan have been
delegated to such Committee or officers.

 

(c)           Delegation to Officers.  To the extent permitted by applicable law,
the Board may delegate to one or more officers of the Company the power to
grant Awards to employees or officers of the Company or any of its present or
future subsidiary corporations and to exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the terms of the
Awards to be granted by such officers (including the exercise price of such
Awards, which may include a formula by which the exercise price will be
determined) and the maximum number of shares subject to Awards that the
officers may grant; provided further, however, that no officer shall be
authorized to grant Awards to any “executive officer” of the Company (as
defined by Rule 3b-7 under the Exchange Act of 1934) or to any “officer”
of the Company (as defined by Rule 16a-1 under the Exchange Act).

 

4.            Stock Available for Awards

 

(a)           Number of Shares.  Subject to
adjustment under Section 10, Awards may be made under the Plan for up to
2,000,000 shares of Common Stock.  If any
Award expires or is terminated, surrendered or canceled without having been
fully exercised, is forfeited in whole or in part (including as the result of
shares of Common Stock subject to such Award being repurchased by the Company
at the original issuance price pursuant to a contractual repurchase right), is
settled in cash or otherwise results in any Common Stock not being issued, the
unused Common Stock covered by such Award shall again be available for the
grant of Awards under the Plan.  However,
in the case of Incentive Stock Options (as hereinafter defined), the foregoing
provisions shall be subject to any limitations under the Code.  Shares issued under the Plan may consist in
whole or in part of authorized but unissued shares or treasury shares.

 

(b)           Sub-limits.  Subject to
adjustment under Section 10, the following sub-limits on the number of
shares subject to Awards shall apply:

 

(1)           Section 162(m) Per-Participant
Limit.  The maximum number of shares of Common Stock
with respect to which Awards may be granted to any Participant under the Plan
shall be  600,000 per calendar year.  For purposes of the foregoing limit, the
combination of an Option in tandem with an SAR (as each is hereafter defined)
shall be treated as a single Award.  The
per-Participant limit described in this Section 4(b)(1) shall be
construed and applied consistently with Section 162(m) of the Code or
any successor provision thereto, and the regulations thereunder (“Section 162(m)”).

 

(2)           Limit on Awards to Directors. 
The maximum number of shares with respect to which Awards may be granted
to any director who is not an employee of the Company at the time of grant
shall be 50,000 per calendar year.

 

(c)           Substitute Awards.  In connection
with a merger or consolidation of an entity with the Company or the acquisition
by the Company of property or stock of an entity, the Board may grant Awards in
substitution for any options or other stock or stock unit awards granted by
such entity or an affiliate thereof. 
Substitute Awards may be granted on such terms as the Board 

 

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deems appropriate
in the circumstances, notwithstanding any limitations on Awards contained in
the Plan.  Substitute Awards shall not count against the overall share limit set forth
in Section 4(a), except as may be required by reason of Section 422
and related provisions of the Code.

 

5.             Stock Options

 

(a)           General.  The Board may
grant options to purchase Common Stock (each, an “Option”) and determine the
number of shares of Common Stock to be covered by each Option, the exercise
price of each Option and the conditions and limitations applicable to the
exercise of each Option, including conditions relating to applicable federal or
state securities laws, as it considers necessary or advisable.  An Option that is not intended to be an
Incentive Stock Option (as hereinafter defined) shall be designated a “Nonstatutory
Stock Option.”

 

(b)           Incentive Stock Options.  An Option
that the Board intends to be an “incentive stock option” as defined in Section 422
of the Code (an “Incentive Stock Option”) shall only be granted to employees of
BioSphere Medical, Inc., any of BioSphere Medical, Inc.’s present or
future parent or subsidiary corporations as defined in Sections 424(e) or (f) of
the Code, and any other entities the employees of which are eligible to receive
Incentive Stock Options under the Code, and shall be subject to and shall be
construed consistently with the requirements of Section 422 of the
Code.  The Company shall have no
liability to a Participant, or any other party, if an Option (or any part
thereof) that is intended to be an Incentive Stock Option is not an Incentive
Stock Option or for any action taken by the Board, including without limitation
the conversion of an Incentive Stock Option to a Nonstatutory Stock Option.

 

(c)           Exercise Price.  The Board
shall establish the exercise price of each Option and specify such exercise
price in the applicable option agreement; provided, however, that the exercise
price shall be not less than 100% of the Fair Market Value (as defined below)
on the date the Option is granted.

 

(d)           Duration of Options.  Each Option
shall be exercisable at such times and subject to such terms and conditions as
the Board may specify in the applicable option agreement, provided, however,
that no Option will be granted for a term in excess of 10 years.

 

(e)           Exercise of Option.  Options may
be exercised by delivery to the Company of a written notice of exercise signed
by the proper person or by any other form of notice (including electronic
notice) approved by the Board, together with payment in full as specified in Section 5(f) for
the number of shares for which the Option is exercised.  Shares of Common Stock subject to the Option
will be delivered by the Company following exercise either as soon as
practicable or, subject to such conditions as the Board shall specify, on a
deferred basis (with the Company’s obligation to be evidenced by an instrument
providing for future delivery of the deferred shares at the time or times
specified by the Board).

 

(f)            Payment Upon Exercise.  Common Stock
purchased upon the exercise of an Option granted under the Plan shall be paid
for as follows:

 

(1)           in cash or by check, payable to the order
of the Company;

 

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(2)           except as may otherwise be provided in
the applicable option agreement, by (i) delivery of an irrevocable and
unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price and any required tax
withholding or (ii) delivery by the Participant to the Company of a copy
of irrevocable and unconditional instructions to a creditworthy broker to
deliver promptly to the Company cash or a check sufficient to pay the exercise
price and any required tax withholding;

 

(3)           to the extent provided for in the
applicable option agreement or approved by the Board, in its sole discretion,
by delivery (either by actual delivery or attestation) of shares of Common
Stock owned by the Participant valued at their fair market value as determined
by (or in a manner approved by) the Board (“Fair Market Value”), provided (i) such
method of payment is then permitted under applicable law, (ii) such Common
Stock, if acquired directly from the Company, was owned by the Participant for
such minimum period of time, if any, as may be established by the Board in its
discretion and (iii) such Common Stock is not subject to any repurchase,
forfeiture, unfulfilled vesting or other similar requirements;

 

(4)           to the extent permitted by applicable law
and provided for in the applicable option agreement or approved by the Board,
in its sole discretion, by (i) delivery of a promissory note of the
Participant to the Company on terms determined by the Board, or (ii) payment
of such other lawful consideration as the Board may determine; or

 

(5)           by any combination of the above permitted
forms of payment.

 

(g)           Limitation on Repricing. 
Unless such action is approved by the Company’s stockholders:  (i) no outstanding Option granted under
the Plan may be amended to provide an exercise price per share that is lower
than the then-current exercise price per share of such outstanding Option
(other than adjustments pursuant to Section 10) and (ii) the Board
may not cancel any outstanding option (whether or not granted under the Plan)
and grant in substitution therefore new Awards under the Plan covering the same
or a different number of share of Common Stock and having an exercise price per
share lower than the then-current exercise price per share of the cancelled
option.

 

6.             Director Awards.

 

(a)           Initial Grant.  Upon the
commencement of service on the Board by any individual who is not then an
employee of the Company or any subsidiary of the Company, the Company shall
grant to such person a Nonstatutory Stock Option to purchase 10,000 shares of
Common Stock (subject to adjustment under Section 10).

 

(b)           Annual Grant.  On the date
of each annual meeting of stockholders of the Company, the Company shall grant
to each member of the Board of Directors of the Company who is both serving as
a director of the Company immediately prior to and immediately following such
annual meeting and who is not then an employee of the Company or any of its
subsidiaries, (i) a Nonstatutory Stock Option to purchase 5,000 shares of
Common Stock and (ii) 2,500 shares of Restricted Stock (as defined in Section 8
below) (each subject to adjustment under Section 10); provided, however,
that a director shall not be eligible to receive an option 

 

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grant or
restricted stock grant under this Section 6(b) until such director
has served on the Board for at least six months.

 

(c)           Terms of Director Options.  Options granted under this Section 6
shall: (i) have an exercise price equal to the closing sale price (for the
primary trading session) of the Common Stock on The Nasdaq Stock Market (“NASDAQ”)
or the national securities exchange on which the Common Stock is then traded on
the trading date immediately prior to the date of grant (and if the Common
Stock is not then traded on NASDAQ or a national securities exchange, the fair
market value of the Common Stock on such date as determined by the Board), (ii) with
respect to Options granted under Section 6(a), vest in five equal annual
installments beginning on the first anniversary of the date of grant, (iii) with
respect to Options granted under Section 6(b), vest in full on the date of
grant, (iii) expire on the earlier of 10 years from the date of grant or
three months following cessation of service on the Board, and (iv) contain
such other terms and conditions as the Board shall determine.

 

(d)           Terms of Director Restricted Stock.  Restricted Stock granted under this Section 6
shall (i) have an exercise price equal to $.01 per share, (ii) be
subject to repurchase by the Company at a price equal to the purchase price
until the second anniversary of the date of grant provided that the individual
is serving on the Board on such date, and provided that the Board may provide
not to exercise such repurchase option in the case of death, disability,
attainment of mandatory retirement age or retirement following at least 10
years of service, and (iii) contain such other terms and conditions as the
Board shall determine.

 

(e)           Board Discretion.  The Board retains the specific authority to
from time to time increase or decrease the number of shares subject to options
and restricted stock awards granted under this Section 6, subject to the
provisions of Section 4(b)(2).

 

7.             Stock Appreciation Rights.

 

(a)           General. 
The Board may grant Awards consisting of a Stock Appreciation Right (“SAR”)
entitling the holder, upon exercise, to receive an amount in Common Stock or
cash or a combination thereof (such form to be determined by the Board)
determined by reference to appreciation, from and after the date of grant, in
the fair market value of a share of Common Stock.  The date as of which such appreciation or
other measure is determined shall be the exercise date.

 

(b)           Grants. 
Stock Appreciation Rights may be granted in tandem with, or
independently of, Options granted under the Plan.

 

(1)           Tandem Awards. 
When Stock Appreciation Rights are expressly granted in tandem with
Options, (i) the Stock Appreciation Right will be exercisable only at such
time or times, and to the extent, that the related Option is exercisable
(except to the extent designated by the Board in connection with an Acquisition
Event) and will be exercisable in accordance with the procedure required for
exercise of the related Option; (ii) the Stock Appreciation Right will
terminate and no longer be exercisable upon the termination or exercise of the
related Option, except to the extent designated by the Board in connection with
an Acquisition Event and except that a Stock Appreciation Right granted with
respect to less than the full number of shares 

 

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covered
by an Option will not be reduced until the number of shares as to which the
related Option has been exercised or has terminated exceeds the number of
shares not covered by the Stock Appreciation Right; (iii) the Option will
terminate and no longer be exercisable upon the exercise of the related Stock
Appreciation Right; and (iv) the Stock Appreciation Right will be
transferable only with the related Option.

 

(2)           Independent SARs.  A
Stock Appreciation Right not expressly granted in tandem with an Option will
become exercisable at such time or times, and on such conditions, as the Board
may specify in the SAR Award.

 

(c)           Grant Price.  The grant price or exercise price of an SAR
shall not be less than 100% of the Fair Market Value per share of Common Stock
on the date of grant of the SAR.

 

(d)           Term.  The term of an SAR shall not be more than 10
years from the date of grant.

 

(e)           Exercise.  Stock Appreciation Rights may be exercised by
delivery to the Company of a written notice of exercise signed by the proper
person or by any other form of notice (including electronic notice) approved by
the Board, together with any other documents required by the Board.

 

8.            Restricted Stock; Restricted Stock Units.

 

(a)           General.  The Board may
grant Awards entitling recipients to acquire shares of Common Stock (“Restricted
Stock”), subject to the right of the Company to repurchase all or part of such
shares at their issue price or other stated or formula price (or to require
forfeiture of such shares if issued at no cost) from the recipient in the event
that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award. 
Instead of granting Awards for Restricted Stock, the Board may grant
Awards entitling the recipient to receive shares of Common Stock to be
delivered at the time such shares of Common Stock vest (“Restricted Stock Units”)
(Restricted Stock and Restricted Stock Units are each referred to herein as a “Restricted
Stock Award”).

 

(b)           Terms and Conditions for all Restricted Stock Awards. 
The Board shall determine the terms and conditions of a Restricted Stock
Award, including the conditions for vesting and repurchase (or forfeiture) and
the issue price, if any.

 

(c)           Additional Provisions Relating to
Restricted Stock.

 

(1)            Dividends.  Participants holding shares of Restricted
Stock will be entitled to all ordinary cash dividends paid with respect to such
shares, unless otherwise provided by the Board. 
If any such dividends or distributions are paid in shares, or consist of
a dividend or distribution to holders of Common Stock other than an
ordinary cash dividend, the shares, cash or
other property will be subject to the same restrictions on transferability and
forfeitability as the shares of Restricted Stock with respect to which they
were paid.   Each dividend payment will
be made no later than the end of the calendar year in which the dividends are
paid to shareholders of that class of stock or, if later, the 15th day of the
third month following the date the dividends are paid to shareholders of that
class of stock.

 

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(2)           Stock Certificates. 
The Company may require that any stock certificates issued in respect of
shares of Restricted Stock shall be deposited in escrow by the Participant,
together with a stock power endorsed in blank, with the Company (or its
designee).  At the expiration of the
applicable restriction periods, the Company (or such designee) shall deliver
the certificates no longer subject to such restrictions to the Participant or
if the Participant has died, to the beneficiary designated, in a manner
determined by the Board, by a Participant to receive amounts due or exercise rights
of the Participant in the event of the Participant’s death (the “Designated
Beneficiary”).  In the absence of an
effective designation by a Participant, “Designated Beneficiary” shall mean the
Participant’s estate.

 

(d)           Additional Provisions Relating to Restricted Stock
Units.

 

(1)           Settlement.  Upon the
vesting of and/or lapsing of any other restrictions (i.e., settlement) with
respect to each Restricted Stock Unit, the Participant shall be entitled to
receive from the Company one share of Common Stock or an amount of cash equal
to the Fair Market Value of one share of Common Stock, as provided in the
applicable Award agreement.  The Board
may, in its discretion, provide that settlement of Restricted Stock Units shall
be deferred, on a mandatory basis or at the election of the Participant.

 

(2)           Voting Rights. 
A Participant shall have no voting rights with respect to any Restricted
Stock Units.

 

(3)           Dividend Equivalents. 
To the extent provided by the Board, in its sole discretion, a grant of
Restricted Stock Units may provide Participants with the right to receive an
amount equal to any dividends or other distributions declared and paid on an
equal number of outstanding shares of Common Stock (“Dividend Equivalents”).  Dividend Equivalents may be paid currently or
credited to an account for the Participants, may be settled in cash and/or
shares of Common Stock and may be subject to the same restrictions on transfer
and forfeitability as the Restricted Stock Units with respect to which paid, as
determined by the Board in its sole discretion, subject in each case to such
terms and conditions as the Board shall establish, in each case to be set forth
in the applicable Award agreement.

 

9.             Other Stock Unit Awards.

 

Other Awards of shares of Common Stock, and other Awards that are
valued in whole or in part by reference to, or are otherwise based on, shares
of Common Stock or other property, may be granted hereunder to Participants (“Other
Stock Unit Awards”), including without limitation Awards entitling recipients
to receive shares of Common Stock to be delivered in the future.  Such Other Stock Unit Awards shall also be
available as a form of payment in the settlement of other Awards granted under
the Plan or as payment in lieu of compensation to which a Participant is
otherwise entitled.  Other Stock Unit
Awards may be paid in shares of Common Stock or cash, as the Board shall
determine.  Subject to the provisions of
the Plan, the Board shall determine the terms and conditions of each Other
Stock Unit Award, including any purchase price applicable thereto.

 

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10.           Adjustments for Changes in Common Stock
and Certain Other Events.

 

(a)           Changes in Capitalization.  In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any dividend or distribution to holders of Common Stock other than
an ordinary cash dividend, (i) the number and class of securities
available under this Plan, (ii) the sub-limits set forth in Section 4(b),
(iii) the number and class of securities and exercise price per share of
each outstanding Option and each Option issuable under Section 6, (iv) the
share- and per-share provisions and the exercise price of each Stock
Appreciation Right, (v) the number of shares subject to and the repurchase
price per share subject to each outstanding Restricted Stock Award and (vi) the
share- and per-share-related provisions and the purchase price, if any, of each
outstanding Other Stock Unit Award, shall be appropriately adjusted by the
Company (or substituted Awards may be made, if applicable) to the extent
determined by the Board.  Without
limiting the generality of the foregoing, in the event the Company effects a
split of the Common Stock by means of a stock dividend and the exercise price
of and the number of shares subject to such Option are adjusted as of the date
of the distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.

 

(b)           Acquisition Events

 

(1)           Consequences
Of Acquisition Events. Subject to Section 10(b)(2) below, upon
the occurrence of an Acquisition Event (as defined below), or the execution by
the Company of any agreement with respect to an Acquisition Event, the Board
shall take any one or more of the following actions with respect to then
outstanding Awards: (i) provide that outstanding Options shall be assumed,
or equivalent Options shall be substituted, by the acquiring or succeeding
corporation (or an affiliate thereof), provided that any such Options
substituted for Incentive Stock Options shall satisfy, in the determination of
the Board, the requirements of Section 424(a) of the Code; (ii) upon
written notice to the Participants, provide that all then unexercised Options
will become exercisable in full as of a specified date (the “Acceleration Date”)
prior to the Acquisition Event and will terminate immediately prior to the consummation
of such Acquisition Event, except to the extent exercised by the Participants
between the Acceleration Date and the consummation of such Acquisition Event; (iii) in
the event of an Acquisition Event under the terms of which holders of Common
Stock will receive upon consummation thereof a cash payment for each share of
Common Stock surrendered pursuant to such Acquisition Event (the “Acquisition
Price”), provide that all outstanding Options shall terminate upon consummation
of such Acquisition Event and each Participant shall receive, in exchange
therefor, a cash payment equal to the amount (if any) by which (A) the
Acquisition Price multiplied by the number of shares of Common Stock subject to
such outstanding Options (whether or not then exercisable), exceeds (B) the
aggregate exercise price of such Options; (iv) provide that all Restricted
Stock Awards then outstanding shall become free of all restrictions prior to
the consummation of the Acquisition Event; and (v) provide that any other
stock-based Awards outstanding (A) shall become exercisable, realizable or
vested in full, 

 

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or
shall be free of all conditions or restrictions, as applicable to each such
Award, prior to the consummation of the Acquisition Event, or (B), if
applicable, shall be assumed, or equivalent Awards shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof).

 

An “Acquisition Event” shall be deemed to have occurred only if any of
the following events occur: (a) the stockholders of the Company approve a
merger or consolidation which results in the voting securities of the Company
outstanding immediately prior thereto representing thereafter (either by
remaining outstanding or by being converted into voting securities of the
surviving or acquiring entity) less than 50% of the combined voting power of
the voting securities of the Company or such surviving or acquiring entity
outstanding immediately after such merger or consolidation; (b) any sale
of all or substantially all of the assets of the Company; (c) the complete
liquidation of the Company; or (d) the acquisition of “beneficial
ownership” (as defined in Rule 13d-3 under the Exchange Act) of securities
of the Company representing 50% or more of the combined voting power of the
Company’s then outstanding securities (other than through a merger or
consolidation or an acquisition of securities directly from the Company) by any
“person”, as such term is used in Sections 13(d) and 14(d) of the Exchange
Act other than the Company, Sepracor Inc. (or its successor), any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or any corporation owned directly or indirectly by the stockholders of
the Company in substantially the same proportion as their ownership of stock of
the Company; or (e) individuals who, on the date on which the Plan was
adopted by the Board of Directors, constituted the Board of Directors of the
Company, together with any new director whose election by the Board of
Directors or  nomination for election by
the Company’s stockholders was approved by a vote of at least a majority of the
directors then still in office who were directors on the date on which the Plan
was adopted by the Board of Directors or whose election or nomination was
previously so approved, cease for any reason to constitute at least a majority
of the Board of Directors.

 

(2)           Acceleration
Upon An Acquisition Event. Except to the extent otherwise provided in the
instrument evidencing the Award or in any other agreement between the
Participant and the Company, upon the occurrence of an Acquisition Event or
with respect to Options or any other similar Awards only, upon the execution by
the Company of any agreement with respect to an Acquisition Event, (i) the
Board shall provide a written notice to the Participants that are directors or
employees of the Company that all Options then outstanding shall become
immediately exercisable in full as of a specified date (the “Acceleration Date”)
prior to the Acquisition Event and will terminate immediately prior to the
consummation of such Acquisition Event, except to the extent exercised by the
Participants between the Acceleration Date and the consummation of such
Acquisition Event; (ii) all Restricted Stock Awards then outstanding and
held by directors or employees of the Company shall become immediately free of
all restrictions; (iii) all other stock-based Awards that are held by
directors or employees of the Company shall become immediately exercisable,
realizable or vested in full, or shall be immediately free of all restrictions
or conditions, as the case may be.

 

11.           General Provisions Applicable to Awards

 

(a)           Transferability of Awards.  Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution or, other than in the 

 

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case of an
Incentive Stock Option, pursuant to a qualified domestic relations order, and,
during the life of the Participant, shall be exercisable only by the
Participant; provided, however, that the Board may permit or provide in an
Award for the gratuitous transfer of the Award by the Participant to or for the
benefit of any immediate family member, family trust or other entity
established for the benefit of the Participant and/or an immediate family
member thereof if, with respect to such proposed transferee, the Company would
be eligible to use a Form S-8 for the registration of the sale of the
Common Stock subject to such Award under the Securities Act of 1933, as
amended; provided, further, that the Company shall not be required to recognize
any such transfer until such time as the Participant and such permitted
transferee shall, as a condition to such transfer, deliver to the Company a
written instrument in form and substance satisfactory to the Company confirming
that such transferee shall be bound by all of the terms and conditions of the
Award.  References to a Participant, to
the extent relevant in the context, shall include references to authorized
transferees.

 

(b)           Documentation.  Each Award shall be evidenced in such form
(written, electronic or otherwise) as the Board shall determine.  Each Award may contain terms and conditions
in addition to those set forth in the Plan.

 

(c)           Board Discretion.  Except as otherwise provided by the Plan,
each Award may be made alone or in addition or in relation to any other
Award.  The terms of each Award need not
be identical, and the Board need not treat Participants uniformly.

 

(d)           Termination of Status.  The Board shall determine the effect on an
Award of the disability, death, termination of employment, authorized leave of
absence or other change in the employment or other status of a Participant and
the extent to which, and the period during which, the Participant, or the
Participant’s legal representative, conservator, guardian or Designated
Beneficiary, may exercise rights under the Award.

 

(e)           Withholding.  The Participant must satisfy all applicable
federal, state, and local or other income and employment tax withholding
obligations before the Company will deliver stock certificates or otherwise
recognize ownership of Common Stock under an Award.  The Company may decide to satisfy the
withholding obligations through additional withholding on salary or wages.  If the Company elects not to or cannot
withhold from other compensation, the Participant must pay the Company the full
amount, if any, required for withholding or have a broker tender to the Company
cash equal to the withholding obligations. 
Payment of withholding obligations is due before the Company will issue
any shares on exercise or release from forfeiture of an Award or, if the
Company so requires, at the same time as is payment of the exercise price
unless the Company determines otherwise. 
If provided for in an Award or approved by the Board in its sole
discretion, a Participant may satisfy such tax obligations in whole or in part
by delivery of shares of Common Stock, including shares retained from the Award
creating the tax obligation, valued at their Fair Market Value; provided,
however, except as otherwise provided by the Board, that the total tax withholding
where stock is being used to satisfy such tax obligations cannot exceed the
Company’s minimum statutory withholding obligations (based on minimum statutory
withholding rates for federal and state tax purposes, including payroll taxes,
that are applicable to such supplemental taxable income).  Shares surrendered to satisfy tax withholding
requirements cannot be subject to any repurchase, forfeiture, unfulfilled
vesting or other similar requirements.

 

10

 

(f)            Amendment of Award.  Except as
otherwise provided in Section 5(g), the Board may amend, modify or
terminate any outstanding Award, including but not limited to, substituting
therefor another Award of the same or a different type, changing the date of
exercise or realization, and converting an Incentive Stock Option to a
Nonstatutory Stock Option, provided either (i) that the Participant’s
consent to such action shall be required unless the Board determines that the
action, taking into account any related action, would not materially and
adversely affect the Participant or (ii) that the change is permitted
under Section 10 hereof.

 

(g)           Conditions on Delivery of Stock. 
The Company will not be obligated to deliver any shares of Common Stock
pursuant to the Plan or to remove restrictions from shares previously delivered
under the Plan until (i) all conditions of the Award have been met or
removed to the satisfaction of the Company, (ii) in the opinion of the
Company’s counsel, all other legal matters in connection with the issuance and
delivery of such shares have been satisfied, including any applicable
securities laws and any applicable stock exchange or stock market rules and
regulations, and (iii) the Participant has executed and delivered to the
Company such representations or agreements as the Company may consider
appropriate to satisfy the requirements of any applicable laws, rules or
regulations.

 

(h)           Acceleration.  The Board may
at any time provide that any Award shall become immediately exercisable in full
or in part, free of some or all restrictions or conditions, or otherwise
realizable in full or in part, as the case may be.

 

(i)            Performance Awards.

 

(1)           Grants.  Restricted
Stock Awards and Other Stock Unit Awards under the Plan may be made subject to
the achievement of performance goals pursuant to this Section 11(i) (“Performance
Awards”), subject to the limit in Section 4(b)(1) on shares covered
by such grants.

 

(2)           Committee.  Grants of
Performance Awards to any Covered Employee intended to qualify as “performance-based
compensation” under Section 162(m) (“Performance-Based Compensation”)
shall be made only by a Committee (or subcommittee of a Committee) comprised
solely of two or more directors eligible to serve on a committee making Awards
qualifying as “performance-based compensation” under Section 162(m).  In the case of such Awards granted to Covered
Employees, references to the Board or to a Committee shall be deemed to be
references to such Committee or subcommittee. 
“Covered Employee” shall mean any person who is a “covered employee”
under Section 162(m)(3) of the Code.

 

(3)           Performance Measures. 
For any Award that is intended to qualify as Performance-Based
Compensation, the Committee shall specify that the degree of granting, vesting and/or
payout shall be subject to the achievement of one or more objective performance
measures established by the Committee, which shall be based on the relative or
absolute attainment of specified levels of one or any combination of the
following:  (a) net income, (b) earnings
before or after discontinued operations, interest, taxes, depreciation and/or
amortization, (c) operating profit before or after discontinued operations
and/or taxes, (d) sales, (e) sales growth, (f) earnings growth, (g) cash
flow or cash position, (h) gross margins, (i) stock price, (j) market
share, (k) return on sales, assets, equity or investment, (l) improvement
of financial 

 

11

 

ratings,
(m) achievement of balance sheet or income statement objectives or (n) total
shareholder return, and may be absolute in their terms or measured against or
in relationship to other companies comparably, similarly or otherwise
situated.  Such performance measures may
be adjusted to exclude any one or more of (i) extraordinary items, (ii) gains
or losses on the dispositions of discontinued operations, (iii) the
cumulative effects of changes in accounting principles, (iv) the writedown
of any asset, and (v) charges for restructuring and rationalization
programs.  Such performance
measures:  (i) may vary by
Participant and may be different for different Awards; (ii) may be
particular to a Participant or the department, branch, line of business,
subsidiary or other unit in which the Participant works and may cover such
period as may be specified by the Committee; and (iii) shall be set by the
Committee within the time period prescribed by, and shall otherwise comply with
the requirements of, Section 162(m). 
Awards that are not intended to qualify as Performance-Based
Compensation may be based on these or such other performance measures as the
Board may determine.

 

(4)           Adjustments.  Notwithstanding any provision of the Plan,
with respect to any Performance Award that is intended to qualify as
Performance-Based Compensation, the Committee may adjust downwards, but not
upwards, the cash or number of Shares payable pursuant to such Award, and the
Committee may not waive the achievement of the applicable performance measures
except in the case of the death or disability of the Participant.

 

(5)           Other.  The Committee shall have the power to impose
such other restrictions on Performance Awards as it may deem necessary or
appropriate to ensure that such Awards satisfy all requirements for
Performance-Based Compensation.

 

12.          Miscellaneous

 

(a)            No Right To Employment or Other Status. 
No person shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed as giving a Participant the right to
continued employment or any other relationship with the Company.  The Company expressly reserves the right at
any time to dismiss or otherwise terminate its relationship with a Participant
free from any liability or claim under the Plan, except as expressly provided
in the applicable Award.

 

(b)           No Rights As Stockholder. 
Subject to the provisions of the applicable Award, no Participant or
Designated Beneficiary shall have any rights as a stockholder with respect to
any shares of Common Stock to be distributed with respect to an Award until becoming
the record holder of such shares.

 

(c)            Effective Date and Term of Plan. 
The Plan shall become effective on the date the Plan is approved by the
Company’s stockholders (the “Effective Date”). 
No Awards shall be granted under the Plan after the completion of 10
years from the Effective Date, but Awards previously granted may extend beyond
that date.

 

(d)           Amendment of Plan. 
The Board may amend, suspend or terminate the Plan or any portion
thereof at any time provided that (i) to the extent required by Section 162(m),
no Award granted to a Participant that is intended to comply with Section 162(m) after
the date of such amendment shall become exercisable, realizable or vested, as
applicable to such Award, 

 

12

 

unless and until
such amendment shall have been approved by the Company’s stockholders if
required by Section 162(m) (including the vote required under Section 162(m));
(ii) no amendment that would require stockholder approval under the rules of
NASDAQ may be made effective unless and until such amendment shall have been
approved by the Company’s stockholders; and (iii) if the NASDAQ amends its
corporate governance rules so that such rules no longer require
stockholder approval of material amendments to equity compensation plans, then,
from and after the effective date of such amendment to the NASDAQ rules, no
amendment to the Plan (A) materially increasing the number of shares
authorized under the Plan (other than pursuant to Section 10), (B) expanding
the types of Awards that may be granted under the Plan, or (C) materially
expanding the class of participants eligible to participate in the Plan shall
be effective unless stockholder approval is obtained.  In addition, if at any time the approval of the
Company’s stockholders is required as to any other modification or amendment
under Section 422 of the Code or any successor provision with respect to
Incentive Stock Options, the Board may not effect such modification or
amendment without such approval.  No
Award shall be made that is conditioned upon stockholder approval of any
amendment to the Plan.

 

(e)           Provisions for Foreign
Participants.  The Board may modify
Awards or Options granted to Participants who are foreign nationals or employed
outside the United States or establish subplans or procedures under the Plan to
recognize differences in laws, rules, regulations or customs of such foreign
jurisdictions with respect to tax, securities, currency, employee benefit or
other matters.

 

(f)            Compliance With Code Section 409A.  No Award shall provide for deferral of
compensation that does not comply with Section 409A of the Code, unless
the Board, at the time of grant, specifically provides that the Award is not
intended to comply with Section 409A of the Code.  The Company shall have no liability to a
Participant, or any other party, if an Award that is intended to be exempt
from, or compliant with, Section 409A is not so exempt or compliant or for
any action taken by the Board.

 

(g)           Governing Law.  The provisions of the Plan and all Awards
made hereunder shall be governed by and interpreted in accordance with the laws
of the State of Delaware, excluding choice-of-law principles of the law of such
state that would require the application of the laws of a jurisdiction other
than such state.

 

13

 

BIOSPHERE
MEDICAL, INC.

 

AMENDMENT
NO. 1 TO

2006
STOCK INCENTIVE PLAN

 

Pursuant to Section 6(e) of
the 2006 Stock Incentive Plan (the “Plan”) of BioSphere Medical, Inc., a
Delaware corporation (the “Company”), the Plan be, and hereby is, amended as
set forth below.  Capitalized terms used
and not defined herein shall have the meanings ascribed to them in the Plan.

 

1.             Section 6(a) of the Plan is hereby deleted in
its entirety and the following is substituted in its place:

 

“(a)  Initial Grant.  Upon commencement of service on the Board by
any individual who is not then an employee of the Company or any subsidiary of
the Company, the Company shall grant to such person a Nonstatutory Stock Option
to purchase 15,000 shares of Common Stock (subject to adjustment under Section 10).”

 

2.             Section 6(c) of the Plan is hereby deleted in
its entirety and the following is substituted in its place:

 

“(c)  Terms of Director Options.  Options granted under this Section 6
shall: (i) have an exercise price equal to the closing price (for the
primary trading session) of the Common Stock on The Nasdaq Stock Market (“NASDAQ”)
or the national securities exchange on which the Common Stock is then traded on
the date of grant (and if the Common Stock is not then traded on NASDAQ or a
national securities exchange, the Fair Market Value on the date the Option is
granted), (ii) with respect to Options granted under Section 6(a),
vest in five equal annual installments beginning on the first anniversary of
the date of grant, (iii) with respect to Options granted under Section 6(b),
vest in full on the date of grant, (iii) expire on the earlier of 10 years
from the date of grant or three months following cessation of services on the
Board, and (iv) contain such other terms and conditions as the Board shall
determine.”

 

3.             This amendment shall be effective as of the date
approved by the Board of Directors of the Company.

 

 

Approved by the Board of
Directors on August 3, 2006

 

14

 

AMENDMENT
NO. 2

 

TO

 

BIOSPHERE
MEDICAL, INC.

 

2006
STOCK INCENTIVE PLAN

 

This Amendment No. 2
(the “Amendment”) is made to the 2006 Stock Incentive Plan (the “Plan”) of
BioSphere Medical, Inc., a Delaware corporation (the “Company).

 

Section 4(a) of
the Plan is hereby deleted in its entirety and the following is substituted in
its place:

 

“(a)  Number of
Shares.   Subject to adjustment under
Section 10, Awards may be made under the Plan for up to 2,500,000 shares
of Common Stock. If any Award expires or is terminated, surrendered or canceled
without having been fully exercised, is forfeited in whole or in part
(including as the result of shares of Common Stock subject to such Award being
repurchased by the Company at the original issuance price pursuant to a
contractual repurchase right), is settled in cash or otherwise results in any
Common Stock not being issued, the unused Common Stock covered by such Award
shall again be available for the grant of Awards under the Plan. However, in
the case of Incentive Stock Options (as hereinafter defined), the foregoing
provisions shall be subject to any limitations under the Code. Shares issued
under the Plan may consist in whole or in part of authorized but unissued
shares or treasury shares.”

 

Except to the extent
amended hereby, the Plan is in all respects hereby ratified and confirmed and
shall continue in full force and effect.

 

Approved by the Board of
Directors, March 25, 2008

Approved by the Shareholders,
May 14, 2008

 

15Exhibit 10.2
 
BIOSPHERE MEDICAL, INC.
 
2000 Employee Stock Purchase Plan
 

The purpose of this Plan is to provide eligible employees of
BioSphere Medical, Inc. (the “Company”) and certain of its
subsidiaries with opportunities to purchase shares of the Company’s common
stock, $0.01 par value (the “Common Stock”), commencing on July 1, 2000.
Fifty Thousand (50,000) shares of Common Stock in the aggregate have been
approved for this purpose. This Plan is intended to qualify as an “employee
stock purchase plan” as defined in Section 423 of the Internal Revenue
Code of 1986, as amended (the “Code”), and the regulations promulgated
thereunder, and shall be interpreted consistent therewith.

 

1.             ADMINISTRATION. The Plan will be administered by the Company’s Board of Directors (the “Board”) or by a Committee appointed by the Board (the “Committee”). The Board or the Committee has authority to make rules and regulations for the administration of the Plan and its interpretation and decisions with regard thereto shall be final and conclusive.
 
2.             ELIGIBILITY. All employees of the Company, including Directors who are employees, and all employees of any subsidiary of the Company (as defined in Section 424(f) of the Code) designated by the Board or the Committee from time to time (a “Designated Subsidiary”), are eligible to participate in any one or more of the offerings of Options (as defined in Section 9) to purchase Common Stock under the Plan provided that:
 
(a)           they are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week and for more than five months in a calendar year; and
 
(b)           they have been employed by the Company or a Designated Subsidiary for at least three months prior to enrolling in the Plan; and
 
(c)           they are employees of the Company or a Designated Subsidiary on the first day of the applicable Plan Period (as defined below).
 

No employee may be granted an option hereunder if such employee,
immediately after the option is granted, owns 5% or more of the total combined
voting power or value of the stock of the Company or any subsidiary. For
purposes of the preceding sentence, the attribution rules of Section 424(d) of
the Code shall apply in determining the stock ownership of an employee, and all
stock which the employee has a contractual right to purchase shall be treated
as stock owned by the employee.

 

3.             OFFERINGS. The Company will make one or more offerings (“Offerings”) to employees to purchase stock under this Plan. Offerings will begin each July 1 and January 1, or the first business day thereafter (the “Offering Commencement Dates”). Each Offering Commencement Date will begin a six month period (a “Plan Period”) during which payroll deductions will be made and held for the purchase of Common Stock at the end of the Plan 
 

 
Period. The Board or the Committee may, at its discretion, choose a different Plan Period of twelve (12) months or less for subsequent Offerings.
 
4.             PARTICIPATION. An employee eligible on the Offering Commencement Date of any Offering may participate in such Offering by completing and forwarding a payroll deduction authorization form to the employee’s appropriate payroll office at least 14 days prior to the applicable Offering Commencement Date. The form will authorize a regular payroll deduction from the Compensation received by the employee during the Plan Period. Unless an employee files a new form or withdraws from the Plan, his deductions and purchases will continue at the same rate for future Offerings under the Plan as long as the Plan remains in effect. The term “Compensation” means the amount of money reportable on the employee’s Federal Income Tax Withholding Statement, excluding overtime, incentive or bonus awards, allowances and reimbursements for expenses such as relocation allowances for travel expenses, income or gains on the exercise of Company stock options and similar items, whether or not shown on the employee’s Federal Income Tax Withholding Statement.
 
5.             DEDUCTIONS. The Company will maintain payroll deduction accounts for all participating employees. With respect to any Offering made under this Plan, an employee may authorize a payroll deduction in any dollar amount up to a maximum of 10% of the Compensation he or she receives during the Plan Period or such shorter period during which deductions from payroll are made. Payroll deductions may be at the rate of 1%, 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9%, or 10% of Compensation with any change in compensation during the Plan Period to result in an automatic corresponding change in the dollar amount withheld.
 

No employee may be granted an Option (as defined in Section 9)
which permits his rights to purchase Common Stock under this Plan and any other
employee stock purchase plan (as defined in Section 423(b) of the
Code) of the Company and its subsidiaries, to accrue at a rate which exceeds
$25,000 of the fair market value of such Common Stock (determined at the
Offering Commencement Date of the Plan Period) for each calendar year in which
the Option is outstanding at any time.

 

6.             DEDUCTION CHANGES. An employee may decrease or discontinue his payroll deduction once during any Plan Period, by filing a new payroll deduction authorization form. However, an employee may not increase his payroll deduction during a Plan Period. If an employee elects to discontinue his payroll deductions during a Plan Period, but does not elect to withdraw his funds pursuant to Section 8 hereof, funds deducted prior to his election to discontinue will be applied to the purchase of Common Stock on the Exercise Date (as defined below).
 
7.             INTEREST. Interest will not be paid on any employee accounts, except to the extent that the Board or the Committee, in its sole discretion, elects to credit employee accounts with interest at such per annum rate as it may from time to time determine.
 
8.             WITHDRAWAL OF FUNDS. An employee may at any time prior to the close of business on the last business day in a Plan Period and for any reason permanently draw out the balance accumulated in the employee’s account and thereby withdraw from participation in an 
 
2

 
Offering. Partial withdrawals are not permitted. The employee may not begin participation again during the remainder of the Plan Period.
 

The employee may participate in any subsequent Offering in accordance
with terms and conditions established by the Board or the Committee.

 

9.             PURCHASE OF SHARES. On the Offering Commencement Date of each Plan Period, the Company will grant to each eligible employee who is then a participant in the Plan an option (“Option”) to purchase on the last business day of such Plan Period (the “Exercise Date”), at the Option Price hereinafter provided for, the largest number of whole shares of Common Stock of the Company as does not exceed the number of shares determined by multiplying $2,083 by the number of full months in the Offering Period and dividing the result by the closing price (as defined below) on the Offering Commencement Date of such Plan Period.
 

The purchase price for each share purchased will be 85% of the closing
price of the Common Stock on (i) the first business day of such Plan
Period or (ii) the Exercise Date, whichever closing price shall be less.
Such closing price shall be (a) the closing price on any national
securities exchange on which the Common Stock is listed, (b) the closing
price of the Common Stock on the Nasdaq National Market or (c) the average
of the closing bid and asked prices in the over-the-counter-market, whichever
is applicable, as published in THE WALL STREET JOURNAL If no sales of Common
Stock were made on such a day, the price of the Common Stock for purposes of
clauses (a) and (b) above shall be the reported price for the next
preceding day on which sales were made.

 

Each employee who continues to be a participant in the Plan on the
Exercise Date shall be deemed to have exercised his Option at the Option Price
on such date and shall be deemed to have purchased from the Company the number
of full shares of Common Stock reserved for the purpose of the Plan that his accumulated
payroll deductions on such date will pay for, but not in excess of the maximum
number determined in the manner set forth above.

 

Any balance remaining in an employee’s payroll deduction account at the
end of a Plan Period will be automatically refunded to the employee, except
that any balance which is less than the purchase price of one share of Common
Stock will be carried forward into the employee’s payroll deduction account for
the following Offering, unless the employee elects not to participate in the
following Offering under the Plan, in which case the balance in the employee’s
account shall be refunded.

 

10.           ISSUANCE OF CERTIFICATES. Certificates representing shares of Common Stock purchased under the Plan may be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or (in the Company’s sole discretion) in the name of a brokerage firm, bank or other nominee holder designated by the employee. The Company may, in its sole discretion and in compliance with applicable laws, authorize the use of book entry registration of shares in lieu of issuing stock certificates.
 
11.           RIGHTS ON RETIREMENT, DEATH OR TERMINATION OF EMPLOYMENT. In the event of a participating employee’s termination of employment prior to 
 
3

 
the last business day of a Plan Period, no payroll deduction shall be taken from any pay due and owing to an employee and the balance in the employee’s account shall be paid to the employee or, in the event of the employee’s death, (a) to a beneficiary previously designated in a revocable notice signed by the employee (with any spousal consent required under state law) or (b) in the absence of such a designated beneficiary, to the executor or administrator of the employee’s estate or (c) if no such executor or administrator has been appointed to the knowledge of the Company, to such other person(s) as the Company may, in its discretion, designate. If, prior to the last business day of the Plan Period, the Designated Subsidiary by which an employee is employed shall cease to be a subsidiary of the Company, or if the employee is transferred to a subsidiary of the Company that is not a Designated Subsidiary, the employee shall be deemed to have terminated employment for the purposes of this Plan.
 
12.           OPTIONEES NOT STOCKHOLDERS. Neither the granting of an Option to an employee nor the deductions from his pay shall constitute such employee a stockholder of the shares of Common Stock covered by an Option under this Plan until such shares have been purchased by and issued to him.
 
13.           RIGHTS NOT TRANSFERABLE. Rights under this Plan are not transferable by a participating employee other than by will or the laws of descent and distribution, and are exercisable during the employee’s lifetime only by the employee.
 
14.           APPLICATION OF FUNDS. All funds received or held by the Company under this Plan may be combined with other corporate funds and may be used for any corporate purpose.
 
15.           ADJUSTMENT IN CASE OF CHANGES AFFECTING COMMON STOCK. In the event of a subdivision of outstanding shares of Common Stock, or the payment of a dividend in Common Stock, the number of shares approved for this Plan, and the share limitation set forth in Section 9, shall be increased proportionately, and such other adjustment shall be made as may be deemed equitable by the Board or the Committee. In the event of any other change affecting the Common Stock, such adjustment shall be made as may be deemed equitable by the Board or the Committee to give proper effect to such event.
 
16.           MERGER. If the Company shall at any time merge or consolidate with another corporation and the holders of the capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 80% by voting power of the capital stock of the surviving corporation (“Continuity of Control”), the holder of each Option then outstanding will thereafter be entitled to receive at the next Exercise Date upon the exercise of such Option for each share as to which such Option shall be exercised the securities or property which a holder of one share of the Common Stock was entitled to upon and at the time of such merger or consolidation, and the Board or the Committee shall take such steps in connection with such merger or consolidation as the Board or the Committee shall deem necessary to assure that the provisions of Section 15 shall thereafter be applicable, as nearly as reasonably may be, in relation to the said securities or property as to which such holder of such Option might thereafter be entitled to receive thereunder.

 

4

 

In the event of a merger or consolidation of the Company with or into
another corporation which does not involve Continuity of Control, or of a sale
of all or substantially all of the assets of the Company while unexercised
Options remain outstanding under the Plan, (a) subject to the provisions
of clauses (b) and (c), after the effective date of such transaction, each
holder of an outstanding Option shall be entitled, upon exercise of such
Option, to receive in lieu of shares of Common Stock, shares of such stock or
other securities as the holders of shares of Common Stock received pursuant to
the terms of such transaction; or (b) all outstanding Options may be
cancelled by the Board or the Committee as of a date prior to the effective
date of any such transaction and all payroll deductions shall be paid out to
the participating employees; or (c) all outstanding Options may be
cancelled by the Board or the Committee as of the effective date of any such
transaction, provided that notice of such cancellation shall be given to each
holder of an Option, and each holder of an Option shall have the right to
exercise such Option in full based on payroll deductions then credited to his
account as of a date determined by the Board or the Committee, which date shall
not be less than ten (10) days preceding the effective date of such
transaction.

 

17.           AMENDMENT OF THE PLAN. The Board may at any time, and from time to time, amend this Plan in any respect, except that (a) if the approval of any such amendment by the shareholders of the Company is required by Section 423 of the Code, such amendment shall not be effected without such approval, and (b) in no event may any amendment be made which would cause the Plan to fail to comply with Section 423 of the Code.
 
18.           INSUFFICIENT SHARES. In the event that the total number of shares of Common Stock specified in elections to be purchased under any Offering plus the number of shares purchased under previous Offerings under this Plan exceeds the maximum number of shares issuable under this Plan, the Board or the Committee will allot the shares then available on a pro rata basis.
 
19.           TERMINATION OF THE PLAN. This Plan may be terminated at any time by the Board. Upon termination of this Plan all amounts in the accounts of participating employees shall be promptly refunded.
 
20.           GOVERNMENTAL REGULATIONS. The Company’s obligation to sell and deliver Common Stock under this Plan is subject to listing on a national stock exchange or quotation on the Nasdaq National Market (to the extent the Common Stock is then so listed or quoted) and the approval of all governmental authorities required in connection with the authorization, issuance or sale of such stock.
 
21.           GOVERNING LAW. The Plan shall be governed by Delaware law except to the extent that such law is preempted by federal law.
 
22.           ISSUANCE OF SHARES. Shares may be issued upon exercise of an Option from authorized but unissued Common Stock, from shares held in the treasury of the Company, or from any other proper source.
 
23.           NOTIFICATION UPON SALE OF SHARES. Each employee agrees, by entering the Plan, to promptly give the Company notice of any disposition of shares purchased under the 
 
5

 
Plan where such disposition occurs within two years after the date of grant of the Option pursuant to which such shares were purchased.
 
24.           EFFECTIVE DATE AND APPROVAL OF SHAREHOLDERS. The Plan shall take effect on July 1, 2000 subject to approval by the shareholders of the Company as required by Section 423 of the Code, which approval must occur within twelve months of the adoption of the Plan by the Board.
 
 
Adopted by the Board of Directors on April 29, 2000
 
Approved by the stockholders on June 7, 2000
 
6

 

AMENDMENT NO. 1

 

to

 

BIOSPHERE MEDICAL, INC.

 

2000 EMPLOYEE STOCK PURCHASE PLAN

 

This Amendment No. 1 (the “Amendment”) is made to the 2000
Employee Stock Purchase Plan (the “Plan”) of BioSphere Medical, Inc., a
Delaware corporation (the “Company”).

 

The second sentence of the first paragraph of the
Plan, is hereby amended and restated in its entirety as follows:

 

“One hundred thousand (100,000) shares of Common Stock
in the aggregate have been approved for this purpose.”

 

Except to the extent amended hereby, the Plan is in
all respects hereby ratified and confirmed and shall continue in full force and
effect.

 

 

Adopted
by the Board of Directors, March 9, 2006

 

Approved
by the Shareholders, May 10, 2006

 

 

AMENDMENT NO. 2

 

to

 

BIOSPHERE MEDICAL, INC.

 

2000 EMPLOYEE STOCK PURCHASE PLAN

 

This Amendment No. 2 (the “Amendment”) is made to the 2000
Employee Stock Purchase Plan (the “Plan”) of BioSphere Medical, Inc., a
Delaware corporation (the “Company”).

 

The
second sentence of the first paragraph of the Plan, is hereby amended and
restated in its entirety as follows:

 

“One
hundred sixty thousand (160,000) shares of Common Stock in the aggregate have
been approved for this purpose.”

 

Except
to the extent amended hereby, the Plan is in all respects hereby ratified and
confirmed and shall continue in full force and effect.

 

 

Adopted
by the Board of Directors, March 25, 2008

 

Approved
by the Shareholders, May 14, 2008

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