Document:

Exhibit 10.5

 

BioSphere Medical, Inc.

 

Incentive Stock Option
Agreement

Granted
Under 1997 Stock Incentive Plan

 

1.                                       Grant of Option.

 

This agreement evidences the grant by BioSphere
Medical, Inc., a Delaware corporation (the “Company”), on                         ,
                (the “Grant Date”) to                                      ,
an [employee], [consultant], [director] of the Company (the “Participant”), of
an option to purchase, in whole or in part, on the terms provided herein and in
the Company’s 1997 Stock Incentive Plan (the “Plan”), a total of                                        
shares (the “Shares”) of common stock, $.01 par value per
share, of the Company (“Common Stock”) at $                              
per Share.  Unless earlier terminated,
this option shall expire on                                     ,
20        [generally ten years from the date of grant] (the
“Final Exercise Date”).

 

It is intended that the option evidenced by this
agreement shall be an incentive stock option as defined in Section 422 of
the Internal Revenue Code of 1986, as amended and any regulations promulgated
thereunder (the “Code”).  Except as
otherwise indicated by the context, the term “Participant”, as used in this
option, shall be deemed to include any person who acquires the right to
exercise this option validly under its terms.

 

2.                                       Vesting Schedule.

 

This
option will become exercisable (“vest”) as follows:          %
of the original number of Shares on [vesting schedule will generally be
based upon time and/or performance metrics].

 

The right of exercise shall be cumulative so that to
the extent the option is not exercised in any period to the maximum extent
permissible it shall continue to be exercisable, in whole or in part, with
respect to all shares for which it is vested until the earlier of the Final
Exercise Date or the termination of this option under Section 3 hereof or
the Plan.

 

3.                                       Exercise of Option.

 

(a)                                  Form
of Exercise.  Each election to
exercise this option shall be in writing, signed by the Participant, and
received by the Company at its principal office, accompanied by this agreement,
and payment in full in the manner provided in the Plan.  The Participant may purchase less than the
number of shares covered hereby, provided that no partial exercise of this
option may be for any fractional share or for fewer than ten whole shares.

 

(b)                                 Continuous
Relationship with the Company Required. 
Except as otherwise provided in this Section 3, this option may not
be exercised unless the Participant, at the time he or she exercises this
option, is, and has been at all times since the Grant Date, an [employee,
officer or director of, or consultant or advisor to,] the Company or any parent
or subsidiary of the Company as defined in Section 424(e) or (f) of the
Code (an “Eligible Participant”).

 

 

(c)                                  Termination
of Relationship with the Company.  If
the Participant ceases to be an Eligible Participant for any reason, then,
except as provided in paragraph (d) [and paragraph (e) below, with respect
to Participants who are employees], the right to exercise this option shall
terminate three months after such cessation (but
in no event after the Final Exercise Date), provided  that this
option shall be exercisable only to the extent that the Participant was entitled
to exercise this option on the date of such cessation.  Notwithstanding the foregoing, if the
Participant, prior to the Final Exercise Date, violates the non-competition or
confidentiality provisions of any employment contract, confidentiality and nondisclosure
agreement or other agreement between the Participant and the Company, unless otherwise required by law or by the Company, the
right to exercise this option shall terminate immediately upon written notice
to the Participant from the Company describing such violation.

 

(d)                                 Exercise
Period Upon Death or Disability.  If
the Participant dies or becomes disabled (within the meaning of Section 22(e)(3)
of the Code) prior to the Final Exercise Date while he or she is an Eligible
Participant [and, in the case of a Participant who is an employee, the Company
has not terminated such relationship for “cause” as specified in paragraph (e)
below,] this option shall be exercisable, within the period of one year
following the date of death or disability of the Participant, by the
Participant, provided  that this option shall be exercisable only
to the extent that this option was exercisable by the Participant on the date
of his or her death or disability, and further provided that this option shall
not be exercisable after the Final Exercise Date.

 

(e)                                  Discharge
for Cause.  [For participants who are
employees of the Company] If the Participant, prior to the Final Exercise Date,
is discharged by the Company for “cause” (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of
such discharge.  “Cause” shall mean: (a)
a good faith finding by the Company of
willful misconduct by the Participant, willful and continuous failure by the
Participant to substantially perform his or her responsibilities to the
Company, dishonesty, or gross negligence (other than from a mental or physical
disability); or (b) the conviction of the Participant of, or the entry
of a pleading of guilty or nolo contendere by the Employee to any crime
involving moral turpitude or any felony.

 

4.                                       Withholding.

 

No Shares will be issued pursuant to the exercise of
this option unless and until the Participant pays to the Company, or makes
provision satisfactory to the Company for payment of, any federal, state or
local withholding taxes required by law to be withheld in respect of this
option.

 

5.                                       Nontransferability of Option.

 

This option may not be sold, assigned, transferred,
pledged or otherwise encumbered by the Participant, either voluntarily or by operation
of law, except by will or the laws of descent and distribution, and, during the
lifetime of the Participant, this option shall be exercisable only by the
Participant.

 

2

 

6.                                       Disqualifying Disposition.

 

If the Participant disposes
of Shares acquired upon exercise of this option within two years from the Grant
Date or one year after such Shares were acquired pursuant to exercise of this
option, the Participant shall notify the Company in writing of such
disposition.

 

7.                                       Provisions of the Plan.

 

This option is subject to the provisions of the Plan,
a copy of which is furnished to the Participant with this option.

 

IN WITNESS WHEREOF, the Company has caused this option
to be executed under its corporate seal by its duly authorized officer.  This option shall take effect as a sealed
instrument.

 

	
   

  	
  BioSphere Medical, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  	
   

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
										

 

3

 

PARTICIPANT’S ACCEPTANCE

 

The undersigned hereby accepts the foregoing option
and agrees to the terms and conditions thereof. 
The undersigned hereby acknowledges receipt of a copy of the Company’s
1997 Stock Incentive Plan.

 

 

	
   

  	
   

  	
   

  
	
   

  	
  Address:

  

 

4

 

NOTICE OF STOCK OPTION EXERCISE

 

	
   

  	
  Date: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Attention:  Treasurer

 

Dear
Sir or Madam:

 

I am the holder of an Incentive Stock Option granted
to me under the BioSphere Medical, Inc. (the “Company”) 1997 Stock Incentive
Plan on                       
for the purchase of                       
shares of Common Stock of the Company at a purchase price of $                      
per share.

 

I hereby exercise my option to purchase                shares
of Common Stock (the “Shares”), for which I have enclosed                 
in the amount of                 Please
register my stock certificate as follows:

 

	
  Name(s):

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tax I.D. #:

  	
   

  	
   

  	
   

  

 

 

	
  Very truly
  yours,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature)

  	
   

  
			

 

5Exhibit 10.6

 

BioSphere Medical, Inc.

 

Form of Nonstatutory
Stock Option Agreement

Granted Under 1997 Stock Incentive Plan

 

1.                                       Grant of Option.

 

This agreement evidences the grant by BioSphere
Medical, Inc., a Delaware corporation (the “Company”), on              ,
         (the
“Grant Date”) to                     ,
an [employee], [consultant], [director] of the Company (the “Participant”), of
an option to purchase, in whole or in part, on the terms provided herein and in
the Company’s 1997 Stock Incentive Plan (the “Plan”), a total of                    
shares (the “Shares”) of common stock, $.01 par value per
share, of the Company (“Common Stock”) at $[                ]
per Share.  Unless earlier terminated,
this option shall expire at 5:00 p.m., Eastern time, on               ,
20       [generally ten years from the date of grant] (the
“Final Exercise Date”).

 

It is intended that the option evidenced by this
agreement shall not be an incentive stock option as defined in Section 422
of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”). 
Except as otherwise indicated by the context, the term “Participant”, as
used in this option, shall be deemed to include any person who acquires the
right to exercise this option validly under its terms.

 

2.                                       Vesting Schedule.

 

This option will become exercisable (“vest”) as to        %
of the original number of Shares on [vesting schedule will generally be
based upon time and/or performance metrics].

 

The right of exercise shall be cumulative so that to
the extent the option is not exercised in any period to the maximum extent
permissible it shall continue to be exercisable, in whole or in part, with
respect to all Shares for which it is vested until the earlier of the Final
Exercise Date or the termination of this option under Section 3 hereof or
the Plan.

 

3.                                       Exercise of Option.

 

(a)                                  Form
of Exercise.  Each election to
exercise this option shall be in writing, signed by the Participant, and
received by the Company at its principal office, accompanied by this agreement,
and payment in full in the manner provided in the Plan.  The Participant may purchase less than the
number of shares covered hereby, provided that no partial exercise of this
option may be for any fractional share or for fewer than ten whole shares.

 

(b)                                 Continuous
Relationship with the Company Required. 
Except as otherwise provided in this Section 3, this option may not
be exercised unless the Participant, at the time he or she exercises this
option, is, and has been at all times since the Grant Date, an [employee,
officer or director of, or consultant or advisor to,] the Company or any parent
or subsidiary of the Company as defined in Section 424(e) or (f) of the
Code (an “Eligible Participant”).

 

 

(c)                                  Termination
of Relationship with the Company.  If
the Participant ceases to be an Eligible Participant for any reason, then,
except as provided in paragraph (d)[and paragraph (e) below, with respect
to Participants who are employees], the right to exercise this option shall
terminate three months after such cessation (but
in no event after the Final Exercise Date), provided  that this
option shall be exercisable only to the extent that the Participant was
entitled to exercise this option on the date of such cessation.  Notwithstanding the foregoing, if the
Participant, prior to the Final Exercise Date, violates the non-competition or
confidentiality provisions of any employment contract, confidentiality and
nondisclosure agreement or other agreement between the Participant and the
Company, unless otherwise required by
law or by the Company, the right to exercise this
option shall terminate immediately upon written notice to the Participant from
the Company describing such violation.

 

(d)                                 Exercise
Period Upon Death or Disability.  If
the Participant dies or becomes disabled (within the meaning of Section 22(e)(3)
of the Code) prior to the Final Exercise Date while he or she is an Eligible
Participant [and, in the case of a Participant who is an employee, the Company
has not terminated such relationship for “cause” as specified in paragraph (e)
below,] this option shall be exercisable, within the period of one year
following the date of death or disability of the Participant, by the
Participant, provided  that this option shall be exercisable only
to the extent that this option was exercisable by the Participant on the date
of his or her death or disability, and further provided that this option shall
not be exercisable after the Final Exercise Date.

 

(e)                                  Discharge
for Cause.  [For participants who are
employees of the Company] If the Participant, prior to the Final Exercise Date,
is discharged by the Company for “cause” (as defined below), the right to
exercise this option shall terminate immediately upon the effective date of
such discharge.  “Cause” shall mean: (a)
a good faith finding by the Company of
willful misconduct by the Participant, willful and continuous failure by the
Participant to substantially perform his or her responsibilities to the
Company, dishonesty, or gross negligence (other than from a mental or physical
disability); or (b) the conviction of the Participant of, or the entry
of a pleading of guilty or nolo contendere by the Employee to any crime
involving moral turpitude or any felony.

 

4.                                       Withholding.

 

No Shares will be issued pursuant to the exercise of
this option unless and until the Participant pays to the Company, or makes
provision satisfactory to the Company for payment of, any federal, state or
local withholding taxes required by law to be withheld in respect of this
option.

 

5.                                       Nontransferability of Option.

 

This option may not be sold, assigned, transferred,
pledged or otherwise encumbered by the Participant, either voluntarily or by
operation of law, except by will or the laws of descent and distribution, and,
during the lifetime of the Participant, this option shall be exercisable only
by the Participant.

 

2

 

6.                                       Provisions of the Plan.

 

This option is subject to the provisions of the Plan,
a copy of which is furnished to the Participant with this option.

 

IN WITNESS WHEREOF, the Company has caused this option
to be executed under its corporate seal by its duly authorized officer.  This option shall take effect as a sealed
instrument.

 

	
   

  	
  BioSphere Medical, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  	
   

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  	
   

  
										

 

3

 

PARTICIPANT’S ACCEPTANCE

 

The undersigned hereby accepts the foregoing option
and agrees to the terms and conditions thereof.  The undersigned hereby acknowledges receipt of
a copy of the Company’s 1997 Stock Incentive Plan.

 

	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

4

 

NOTICE OF STOCK OPTION EXERCISE

 

	
   

  	
  Date: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

Attention:  Treasurer

 

Dear
Sir or Madam:

 

I am the holder of a Nonstatutory Stock Option granted
to me under the BioSphere Medical, Inc. (the “Company”) 1997 Stock Incentive
Plan on                        for
the purchase of                        shares
of Common Stock of the Company at a purchase price of $                        per
share.

 

I hereby exercise my option to purchase                        shares
of Common Stock (the “Shares”), for which I have enclosed                         in
the amount of                        Please
register my stock certificate as follows:

 

	
  Name(s):

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tax I.D. #:

  	
   

  	
   

  	
   

  

 

 

	
  Very truly
  yours,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Signature)

  	
   

  
			

 

5

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