Document:

exv4w2

 

EXHIBIT 4.2

SIPEX CORPORATION

STAND-ALONE STOCK OPTION AGREEMENT

	 	 	 	 	 
	I.	 	NOTICE OF STOCK OPTION GRANT
	 
	 	 	 	 
	 

	 	[Name]   
             
            
             
              
     	 	 
	 
	 	 	 	 
	 

	 	[Address]  
             
            
              
               
    	 	 
	 
	 	 	 	 
	 

	 	       
              
              
             
             
               
    	 	 

     You
have been granted a Nonstatutory Stock Option to purchase Common Stock of the Company,
subject to the terms and conditions of this Agreement, as follows:

	 	 	 	 	 
	Date of Grant
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	Vesting Commencement Date
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	Exercise Price per Share
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	Total Number of Shares Granted
	 	 	 	 
	 
	 	 	 
	 
	 	 	 	 
	Total Exercise Price
	 	$	 	 
	 
	 	 	 
	 
	 	 	 	 
	Term/Expiration Date:
	 	 	 	 
	 
	 	 	 

     Vesting Schedule:

     The Shares subject to the Option shall be fully vested and may be exercised, in whole or in
part, as of the Date of Grant, subject to the Optionee continuing remaining a Service Provider of
the Company through such dates.

	 	 	 
	On [Vest Date 1]

	 	[Number] shares
	 	 	 
	On [Vest Date 2]
	 	an additional [Number] shares

 

 

     Termination Period

     This Option may be exercised in accordance with Sections 6 through 10 of this Agreement. In
no event shall this Option be exercised later than the Term/Expiration Date provided.

II. AGREEMENT

     1. Definitions. As used herein, the following definitions shall apply:

          (a) “Agreement” means this stock option agreement between the Company and Optionee
evidencing the terms and conditions of this Option.

          (b) “Applicable Laws” means the requirements relating to the administration of stock
options under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any
stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable
laws of any foreign country or jurisdiction that may apply to this Option.

          (c) “Board” means the Board of Directors of the Company or any committee of the Board
that has been designated by the Board to administer this Agreement.

          (d) “Cause” means (i) Optionee’s failure to perform the duties of his position (as
they may exist from time to time) to the reasonable satisfaction of the Board; (ii) any act of
dishonesty, fraud or misrepresentation taken by Optionee in connection with his responsibilities as
a Service Provider; (iii) Optionee’s conviction or plea of no contest to a crime that negatively
reflects on his fitness to perform his duties or harms the Company’s reputation or business, in
each case as determined by the Board in its sole discretion; (iv) Optionee’s violation of any
federal, state or other law or regulation applicable to the Company’s business, or of any Company
policy, including, but not limited to, the Company’s anti-harassment and discrimination policies;
(v) willful misconduct by Optionee that is injurious to the Company’s reputation or business, in
each case as determined by the Board in its sole discretion; and (vi) Optionee’s termination
pursuant to the termination of the Company’s normal business operations. For the purposes of this
definition of “Cause,” an act or failure to act will be deemed “willful” if effected not in good
faith or without reasonable belief that such action or failure to act was in the best interests of
the Company.

          (e) “Change in Control” means (i) any “person” (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company representing sixty percent
(60%) or more of the total voting power represented by the Company’s then outstanding voting
securities; or (ii) a change in the composition of the Board occurring within a two-year period, as
a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent
Directors” will mean directors who either (A) are directors of the Company as of June 7, 2005, or
(B) are elected, or nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination (but will not
include an individual whose election or nomination is in connection with an actual or threatened
proxy contest relating to the election of directors to the Company); or (iii) the date of the
consummation of a merger or consolidation of the Company with any other corporation that has been
approved by the stockholders of the Company, other than a merger or consolidation which would
result in the voting

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securities of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of the surviving
entity) more than sixty percent (60%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of complete liquidation of the
Company; or (iv) the date of the consummation of the sale or disposition by the Company of all or
substantially all the Company’s assets. Notwithstanding the foregoing, a “Change in Control” shall
not include any transaction or series of transactions involving the Company’s issuance of any
equity or debt securities to third parties for capital raising purposes.

          (f) “Code” means the Internal Revenue Code of 1986, as amended.

          (g) “Common Stock” means the common stock of the Company.

          (h) “Company” means SIPEX Corporation, a Delaware corporation.

          (i) “Consultant” means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services to such entity.

          (j) “Director” means a member of the Board.

          (k) “Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code.

          (l) “Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. An Employee shall not cease to be an Employee
in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any successor. Neither
service as a Director nor payment of a director’s fee by the Company shall be sufficient to
constitute “employment” by the Company.

          (m) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (n) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:

                    (1) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of
The Nasdaq Stock Market, or is actively traded over-the-counter, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system on the date of grant, or if unavailable, for the last market trading day
prior to date of grant, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable;

                    (2) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of determination; or

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                    (3) In the absence of an established market for the Common Stock, the Fair Market Value
thereof shall be determined in good faith by the Board.

          (o) “Nonstatutory Stock Option” means an Option not intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

          (p) “Notice of Grant” means a written notice, in Part I of this Agreement, evidencing
certain the terms and conditions of this Option grant. The Notice of Grant is part of the Option
Agreement.

          (q) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

          (r) “Option” means this stock option.

          (s) “Optioned Stock” means the Common Stock subject to this Option.

          (t) “Optionee” means the person named in the Notice of Grant or such person’s
successor.

          (u) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

          (v) “Service Provider” means an Employee, Director or Consultant.

          (w) “Share” means a share of the Common Stock, as adjusted in accordance with Section
11 of this Agreement.

          (x) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing,
as defined in Section 424(f) of the Code.

     2. Grant of Option. The Board hereby grants to the Optionee named in the Notice of
Grant attached as Part I of this Agreement the Option to purchase the number of Shares, as set
forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the
“Exercise Price”), subject to the terms and conditions of this Agreement.

     3. Exercise of Option.

          (a) Right to Exercise. This Option is exercisable during its term in accordance with
the Vesting Schedule set out in the Notice of Grant and the applicable provisions of this
Agreement.

          (b) Method of Exercise. This Option is exercisable by delivery of an exercise notice,
in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election
to exercise the Option, the number of Shares in respect of which the Option is being exercised (the
“Exercised Shares”), and such other representations and agreements as may be required by the
Company. The Exercise Notice shall be completed by the Optionee and delivered to the Secretary of

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the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise
Price as to all Exercised Shares. This Option shall be deemed to be exercised upon receipt by the
Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price.

          (c) Legal Compliance. No Shares shall be issued pursuant to the exercise of this
Option unless such issuance and exercise complies with Applicable Laws. Assuming such compliance,
for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the
date the Option is exercised with respect to such Exercised Shares.

          (d) Buyout Provisions. The Board may at any time offer to buy out for a payment in
cash or Shares an Option previously granted based on such terms and conditions as the Board shall
establish and communicate to the Optionee at the time that such offer is made.

     4. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

          (a) cash or check;

          (b) consideration received by the Company under a cashless exercise program implemented by the
Company;

          (c) surrender of other Shares which (i) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six (6) months on the date of surrender, and
(ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares.

     5. Non-Transferability of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by the Optionee. The terms of this Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.

     6. Term of Option. This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with the terms of this
Agreement. Notwithstanding any other provision of this Agreement, in no event shall this Option be
exercised later than the Term/Expiration Date provided.

     7. Termination of Relationship as a Service Provider. If the Optionee ceases to be a
Service Provider (other than for death or Disability), this Option may be exercised for a period of
three (3) months after the date of such termination (but in no event later than the expiration date
of this Option as set forth in the Notice of Grant) to the extent that the Option is vested on the
date of such termination. To the extent that the Optionee does not exercise this Option within the
time specified herein, the Option shall terminate.

     8. Disability of Optionee. If Optionee’s ceases to be a Service Provider as a result
of the Optionee’s Disability, this Option may be exercised for a period of twelve (12) months after
the date of such termination (but in no event later than the expiration date of this Option as set
forth in the Notice of Grant) to the extent that the Option is vested on the date of such
termination. To the extent

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that Optionee does not exercise this Option within the time specified herein, the Option shall
terminate.

     9. Death of Optionee. If the Optionee dies while a Service Provider, the Option may
be exercised at any time within twelve (12) months following the date of death (but in no event
later than the expiration date of this Option as set forth in the Notice of Grant), by the
Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent that the Optionee was entitled to exercise the Option at the
date of death. If, after death, the Optionee’s estate or a person who acquired the right to
exercise the Option by bequest or inheritance does not exercise the Option within the time
specified herein, the Option shall terminate.

     10. Termination for Cause. If the Optionee is terminated for Cause, this Option shall
terminate immediately upon the Optionee’s receipt of written notice of such termination and shall
thereafter not be exercisable to any extent whatsoever.

     11. Adjustments upon Changes in Capitalization, Dissolution, Merger or Asset Sale.

          (a) Subject to any required action by the stockholders of the Company, the number of shares of
Common Stock and class of securities covered by this Option, as well as the price per share of
Common Stock covered by this Option and the vesting schedule, shall be proportionately adjusted (or
a substituted option may be granted) for any increase or decrease in the number of issued shares of
Common Stock resulting from a stock split, reverse stock split, stock dividend, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares,
liquidation, spin-off, split-up or other similar event or reclassification of the Common Stock, or
any other increase or decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Board or its designated committee, whose
determination in that respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or securities convertible into
shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to this Option.

          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Board or its designated committee shall notify Optionee as soon as
practicable prior to the effective date of such proposed transaction. The Board or its designated
committee in its discretion may provide for the Optionee to have the right to exercise his or her
Option until fifteen (15) days prior to such transaction as to all of the Optioned Stock covered
thereby, including Shares as to which the Option would not otherwise be exercisable. To the extent
it has not been previously exercised, the Option will terminate immediately prior to the
consummation of such proposed

          (c) Merger or Change in Control. In the event of a merger of the Company with or into
another corporation, or a Change in Control, the Option shall be assumed or an equivalent option
substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.
In the event that the successor corporation in a merger or Change in Control refuses to

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assume or substitute for the Option, then the Optionee shall fully vest in and have the right
to exercise the Option as to all of the Optioned Stock, including Shares as to which it would not
otherwise be vested or exercisable. If the Option is not assumed or substituted in connection with
a merger or Change in Control, the Board or its designated committee shall notify the Optionee in
writing or electronically that the Option shall be fully exercisable for a period of fifteen (15)
days from the date of such notice, and the Option shall terminate upon the expiration of such
period. For the purposes of this paragraph, the Option shall be considered assumed if, following
the merger or Change in Control, the option confers the right to purchase or receive, for each
Share subject to the Option immediately prior to the merger or Change in Control, the consideration
(whether stock, cash, or other securities or property) received in the merger or Change in Control
by holders of Common Stock for each Share held on the effective date of the transaction (and if
holders were offered a choice of consideration, the type of consideration chosen by the holders of
a majority of the outstanding Shares); provided, however, that if such consideration received in
the merger or Change in Control is not solely common stock of the successor corporation or its
Parent, the Board or its designated committee may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option, for each Share
subject to the Option, to be solely common stock of the successor corporation or its Parent equal
in fair market value to the per share consideration received by holders of common stock in the
merger or Change in Control.

     12. Notices. Any notice to be given to the Company hereunder shall be in writing and
shall be addressed to the Company at its then current principal executive office or to such other
address as the Company may hereafter designate to the Optionee by notice as provided in this
Section. Any notice to be given to the Optionee hereunder shall be addressed to the Optionee at
the address set forth beneath his signature hereto, or at such other address as the Optionee may
hereafter designate to the Company by notice as provided herein. A notice shall be deemed to have
been duly given when personally delivered or mailed by registered or certified mail to the party
entitled to receive it.

     13. Tax Consequences. Some of the federal tax consequences relating to this Option,
as of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND
THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

          (a) Exercising the Option. The Optionee may incur regular federal income tax
liability upon exercise of a Nonstatutory Stock Option (an “NSO”). The Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates) equal to the excess, if
any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate
Exercise Price. If the Optionee is an Employee or a former Employee, the Company will be required
to withhold from his or her compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income at the time of
exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding
amounts are not delivered at the time of exercise.

          (b) Disposition of Shares. If the Optionee holds NSO Shares for at least one year,
any gain realized on disposition of the Shares will be treated as long-term capital gain for
federal income tax purposes.

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     14. Entire Agreement; Governing Law. This Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the subject matter hereof,
and may not be modified adversely to the Optionee’s interest except by means of a writing signed by
the Company and Optionee. This agreement is governed by the internal substantive laws, but not the
choice of law rules, of California.

     15. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE
PROVIDER AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, ELECTED AS A DIRECTOR,
BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH
HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUES ENGAGEMENT AS A SERVICE
PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S
RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY
TIME, WITH OR WITHOUT CAUSE.

     By your signature and the signature of the Company’s representative below, you and the Company
agree that this Option is granted under and governed by the terms and conditions of this Agreement.
Optionee has reviewed this Agreement in its entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Agreement and fully understands all provisions of this
Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Board upon any questions relating to this Agreement. Optionee further
agrees to notify the Company upon any change in the residence address indicated below.

	 	 	 	 	 	 	 
	OPTIONEE

	 	SIPEX CORPORATION
	 
	 	 	 	 	 	 
	 	 	 
	Signature: 

	 	 	By:	 	 
	 

	 	 
	 	 	 
	Address:

	 	 	 	Title: 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	 	C/O Sipex Corporation	 	 
	 
	 	 	 	 	 	 
	 	233 South Hillview Drive	 	 
	 
	 	 	 	 	 	 
	 	Milpitas, CA 95035	 	 

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EXHIBIT A

SIPEX CORPORATION

EXERCISE NOTICE

SIPEX Corporation

233 South Hillview Drive

Milpitas, CA 95053

Attention:

     1. Exercise of Option. Effective as of today, ___, 20___, the undersigned
(“Purchaser”) hereby elects to purchase ___shares (the “Shares”) of the Common Stock of
SIPEX Corporation (the “Company”) under and pursuant to the Stock Option Agreement dated
[___] (the “Option Agreement”). The purchase price for the Shares shall be [$___],
as required by the Option Agreement.

     2. Delivery of Payment. Purchaser herewith delivers to the Company the full purchase
price for the Shares.

     3. Representations of Purchaser. Purchaser acknowledges that Purchaser has received,
read and understood the Option Agreement and agrees to abide by and be bound by their terms and
conditions.

     4. Rights as Shareholder. Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares,
no right to vote or receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be
issued to the Optionee as soon as practicable after exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the date of issuance,
except as provided in Section 11 of the Option Agreement.

     5. Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser
represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in
connection with the purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.

     6. Successors and Assigns. The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the
benefit of the successors and assigns of the Company. Subject to the restrictions on transfer
herein set forth, this Exercise Notice shall be binding upon Optionee and his or her heirs,
executors, administrators, successors and assigns.

 

 

     7. Interpretation. Any dispute regarding the interpretation of this Exercise Notice
shall be submitted by Optionee or by the Company forthwith to the Administrator which shall review
such dispute at its next regular meeting. The resolution of such a dispute by the Administrator
shall be final and binding on all parties.

     8. Entire Agreement; Governing Law. The Option Agreement is incorporated herein by
reference. This Agreement, and the Option Agreement constitute the entire agreement of the parties
with respect to the subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not
be modified adversely to the Purchaser’s interest except by means of a writing signed by the
Company and Purchaser. This agreement is governed by the internal substantive laws, but not the
choice of law rules, of California.

	 	 	 
	Submitted by:

	 	Accepted by:
	 
	 	 
	OPTIONEE

	 	SIPEX CORPORATION
	 
	 	 
	 

	 	 
	Signature
	 	 
	 
	 	 
	 

	 	 
	Print Name
	 	 
	 
	 	 
	 

	 	 
	Address:

	 	Address:
	 

	 	233 South Hillview Drive
	 
	 

	 	Milpitas, CA 95053
	 
	 
	 

	 	Date Received:                                                             

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EXHIBIT 4.3

SIPEX CORPORATION

STAND-ALONE STOCK OPTION AGREEMENT

I. NOTICE OF STOCK OPTION GRANT

     Ralph Schmitt

     You have been granted a Nonstatutory Stock Option to purchase Common Stock of the Company,
subject to the terms and conditions of this Agreement, as follows:

	 	 	 	 	 
	 

	 	Date of Grant
	 	June 27, 2005
	 
	 	 	 	 
	 

	 	Vesting Commencement Date
	 	June 27, 2005
	 
	 	 	 	 
	 

	 	Exercise Price per Share
	 	$1.70
	 
	 	 	 	 
	 

	 	Total Number of Shares Granted
	 	1,000,000
	 
	 	 	 	 
	 

	 	Term/Expiration Date:
	 	June 27, 2015
	 
	 	 	 	 
	 

	 	Vesting Schedule:	 	 

     The Shares subject to the Option shall vest and may be exercised, in whole or in part, in at a
rate of 1/4 of such Shares on the one-year anniversary of the Vesting Commencement Date and 1/48 of
such Shares monthly thereafter, subject to the Optionee continuing to be an Employee of the Company
on such dates.

 

 

     Termination Period

     This Option may be exercised in accordance with Sections 6 through 10 of this Agreement. In
no event shall this Option be exercised later than the Term/Expiration Date provided.

II. AGREEMENT

     1. Definitions. As used herein, the following definitions shall apply:

          (a) “Agreement” means this stock option agreement between the Company and Optionee
evidencing the terms and conditions of this Option.

          (b) “Applicable Laws” means the requirements relating to the administration of stock
options under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any
stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable
laws of any foreign country or jurisdiction that may apply to this Option.

          (c) “Board” means the Board of Directors of the Company or any committee of the Board
that has been designated by the Board to administer this Agreement.

          (d) “Cause” means (i) Optionee’s failure to perform the duties of his position (as
they may exist from time to time) to the reasonable satisfaction of the Board; (ii) any act of
dishonesty, fraud or misrepresentation taken by Optionee in connection with his responsibilities as
an employee; (iii) Optionee’s conviction or plea of no contest to a crime that negatively reflects
on his fitness to perform his duties or harms the Company’s reputation or business, in each case as
determined by the Board in its sole discretion; (iv) Optionee’s violation of any federal, state or
other law or regulation applicable to the Company’s business, or of any Company policy, including,
but not limited to, the Company’s anti-harassment and discrimination policies; (v) willful
misconduct by Optionee that is injurious to the Company’s reputation or business, in each case as
determined by the Board in its sole discretion; (vi) a material breach of Optionee’s obligations
pursuant to the Letter Agreement or under the Confidential Information and Invention Assignment
Agreement between him and the Company; and (vii) Optionee’s termination pursuant to the termination
of the Company’s normal business operations. For the purposes of this definition of “Cause,” an
act or failure to act will be deemed “willful” if effected not in good faith or without reasonable
belief that such action or failure to act was in the best interests of the Company.

          (e) “Change of Control” means (i) any “person” (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company representing sixty percent
(60%) or more of the total voting power represented by the Company’s then outstanding voting
securities; or (ii) a change in the composition of the Board occurring within a two-year period, as
a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent
Directors” will mean directors who either (A) are directors of the Company as of June 7, 2005, or
(B) are elected, or nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination (but will not
include an individual whose election or nomination is in connection with an actual or threatened
proxy contest relating to the election of directors to the Company); or (iii) the date of the
consummation of

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a merger or consolidation of the Company with any other corporation that has been approved by
the stockholders of the Company, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of the surviving
entity) more than sixty percent (60%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of complete liquidation of the
Company; or (iv) the date of the consummation of the sale or disposition by the Company of all or
substantially all the Company’s assets. Notwithstanding the foregoing, a “Change of Control” shall
not include any transaction or series of transactions involving the Company’s issuance of any
equity or debt securities to third parties for capital raising purposes.

          (f) “Code” means the Internal Revenue Code of 1986, as amended.

          (g) “Common Stock” means the common stock of the Company.

          (h) “Company” means SIPEX Corporation, a Delaware corporation.

          (i) “Director” means a member of the Board.

          (j) “Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code.

          (k) “Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. A Employee shall not cease to be an Employee
in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any successor. Neither
service as a Director nor payment of a director’s fee by the Company shall be sufficient to
constitute “employment” by the Company.

          (l) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (m) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:

                    (1) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of
The Nasdaq Stock Market, or is actively traded over-the-counter, its Fair Market Value shall be the
closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system on the date of grant, or if unavailable, for the last market trading day
prior to date of grant, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable;

                    (2) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of determination; or

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                    (3) In the absence of an established market for the Common Stock, the Fair Market Value
thereof shall be determined in good faith by the Board.

          (n) “Nonstatutory Stock Option” means an Option not intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

          (o) “Notice of Grant” means a written notice, in Part I of this Agreement, evidencing
certain the terms and conditions of this Option grant. The Notice of Grant is part of the Option
Agreement.

          (p) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

          (q) “Option” means this stock option.

          (r) “Optioned Stock” means the Common Stock subject to this Option.

          (s) “Optionee” means the person named in the Notice of Grant or such person’s
successor.

          (t) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

          (u) “Share” means a share of the Common Stock, as adjusted in accordance with Section
11 of this Agreement.

          (v) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing,
as defined in Section 424(f) of the Code.

     2. Grant of Option. The Board hereby grants to the Optionee named in the Notice of
Grant attached as Part I of this Agreement the Option to purchase the number of Shares, as set
forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the
“Exercise Price”), subject to the terms and conditions of this Agreement.

     3. Exercise of Option.

          (a) Right to Exercise. This Option is exercisable during its term in accordance with
the Vesting Schedule set out in the Notice of Grant and the applicable provisions of this
Agreement.

          (b) Method of Exercise. This Option is exercisable by delivery of an exercise notice,
in the form attached as Exhibit A (the “Exercise Notice”), which shall state the election
to exercise the Option, the number of Shares in respect of which the Option is being exercised (the
“Exercised Shares”), and such other representations and agreements as may be required by the
Company. The Exercise Notice shall be completed by the Optionee and delivered to the Secretary of
the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise

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Price as to all Exercised Shares. This Option shall be deemed to be exercised upon receipt by
the Company of such fully executed Exercise Notice accompanied by such aggregate Exercise Price.

          (c) Legal Compliance. No Shares shall be issued pursuant to the exercise of this
Option unless such issuance and exercise complies with Applicable Laws. Assuming such compliance,
for income tax purposes the Exercised Shares shall be considered transferred to the Optionee on the
date the Option is exercised with respect to such Exercised Shares.

          (d) Buyout Provisions. The Board may at any time offer to buy out for a payment in
cash or Shares an Option previously granted based on such terms and conditions as the Board shall
establish and communicate to the Optionee at the time that such offer is made.

     4. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

          (a) check;

          (b) consideration received by the Company under a cashless exercise program implemented by the
Company;

          (c) surrender of other Shares which (i) in the case of Shares acquired upon exercise of an
option, have been owned by the Optionee for more than six (6) months on the date of surrender, and
(ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the
Exercised Shares.

     5. Non-Transferability of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by the Optionee. The terms of this Agreement shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.

     6. Term of Option. This Option may be exercised only within the term set out in the
Notice of Grant, and may be exercised during such term only in accordance with the terms of this
Agreement. Notwithstanding any other provision of this Agreement, in no event shall this Option be
exercised later than the Term/Expiration Date provided.

     7. Termination of Employment Relationship.

          (a) If Optionee’s status as an Employee of the Company terminates voluntarily by Optionee,
this Option may be exercised for a period of three (3) months after the date of such termination
(but in no event later than the expiration date of this Option as set forth in the Notice of Grant)
to the extent that the Option is vested on the date of such termination. To the extent that the
Optionee does not exercise this Option within the time specified herein, the Option shall
terminate.

          (b) Except as otherwise provided in Sections 7 through 9 of this Agreement, if Optionee’s
status as an Employee terminates other than (a) voluntarily by Optionee, or (b) for Cause, this
Option may be exercised for a period of twelve (12) months after the date of such termination (but
in no event later than the expiration date of this Option as set forth in the Notice of Grant) to
the

-5-

 

extent that the Option is vested on the date of such termination. To the extent that the
Optionee does not exercise this Option within the time specified herein, the Option shall
terminate.

          (c) If Optionee’s status as an Employee terminates other than (a) voluntarily, (b) by reason
of his death or Disability or (c) for Cause prior to June 27, 2006, two hundred and fifty thousand
(250,000) of the shares subject to the Option shall immediately vest and become exercisable for a
period of twelve (12) months following the date of termination (but in no event later than the
expiration date of this Option as set forth in the Notice of Grant).

          (d) If Optionee’s status as an Employee terminates other than (a) voluntarily, (b) by reason
of his death or Disability, or (c) for Cause within twelve (12) months after a Change of Control,
all of the shares subject to the Option shall vest and become exercisable for a period of twelve
(12) months following the date of Optionee’s termination (but in no event later than the expiration
date of this Option as set forth in the Notice of Grant).

     8. Disability of Optionee. If Optionee’s status as an Employee terminates as a result
of the Optionee’s Disability, this Option may be exercised for a period of twelve (12) months after
the date of such termination (but in no event later than the expiration date of this Option as set
forth in the Notice of Grant) to the extent that the Option is vested on the date of such
termination. To the extent that Optionee does not exercise this Option within the time specified
herein, the Option shall terminate.

     9. Death of Optionee. If the Optionee dies while an Employee, the Option may be
exercised at any time within twelve (12) months following the date of death (but in no event later
than the expiration date of this Option as set forth in the Notice of Grant), by the Optionee’s
estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the Option at the date of death. If,
after death, the Optionee’s estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified herein, the Option
shall terminate.

     10. Termination for Cause. If the Optionee is terminated for Cause, this Option shall
terminate immediately upon the Optionee’s receipt of written notice of such termination and shall
thereafter not be exercisable to any extent whatsoever.

     11. Adjustments upon Changes in Capitalization, Dissolution, Merger or Asset Sale.
Subject to any required action by the stockholders of the Company, the number of shares of Common
Stock and class of securities covered by this Option, as well as the price per share of Common
Stock covered by this Option and the vesting schedule, shall be proportionately adjusted (or a
substituted option may be granted) for any increase or decrease in the number of issued shares of
Common Stock resulting from a stock split, reverse stock split, stock dividend, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares,
liquidation, spin-off, split-up or other similar event or reclassification of the Common Stock, or
any other increase or decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the
Company of shares of stock

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of any class, or securities convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number or price of shares of
Common Stock subject to this Option.

     12. Notices. Any notice to be given to the Company hereunder shall be in writing and
shall be addressed to the Company at its then current principal executive office or to such other
address as the Company may hereafter designate to the Optionee by notice as provided in this
Section. Any notice to be given to the Optionee hereunder shall be addressed to the Optionee at
the address set forth beneath his signature hereto, or at such other address as the Optionee may
hereafter designate to the Company by notice as provided herein. A notice shall be deemed to have
been duly given when personally delivered or mailed by registered or certified mail to the party
entitled to receive it.

     13. Tax Consequences. Some of the federal tax consequences relating to this Option,
as of the date of this Option, are set forth below. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND
THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT A TAX ADVISER
BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

          (a) Exercising the Option. The Optionee may incur regular federal income tax
liability upon exercise of a Nonstatutory Stock Option (an “NSO”). The Optionee will be treated as
having received compensation income (taxable at ordinary income tax rates) equal to the excess, if
any, of the Fair Market Value of the Exercised Shares on the date of exercise over their aggregate
Exercise Price. If the Optionee is an Employee or a former Employee, the Company will be required
to withhold from his or her compensation or collect from Optionee and pay to the applicable taxing
authorities an amount in cash equal to a percentage of this compensation income at the time of
exercise, and may refuse to honor the exercise and refuse to deliver Shares if such withholding
amounts are not delivered at the time of exercise.

          (b) Disposition of Shares. If the Optionee holds NSO Shares for at least one year,
any gain realized on disposition of the Shares will be treated as long-term capital gain for
federal income tax purposes.

     14. Entire Agreement; Governing Law. This Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the subject matter hereof,
and may not be modified adversely to the Optionee’s interest except by means of a writing signed by
the Company and Optionee. This agreement is governed by the internal substantive laws, but not the
choice of law rules, of California.

     15. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS AN
EMPLOYEE AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN
OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO

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NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUES ENGAGEMENT AS AN EMPLOYEE FOR THE
VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE WITH OPTIONEE’S RIGHT OR THE
COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS AN EMPLOYEE AT ANY TIME, WITH OR WITHOUT
CAUSE.

     By your signature and the signature of the Company’s representative below, you and the Company
agree that this Option is granted under and governed by the terms and conditions of this Agreement.
Optionee has reviewed this Agreement in its entirety, has had an opportunity to obtain the advice
of counsel prior to executing this Agreement and fully understands all provisions of this
Agreement. Optionee hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Board upon any questions relating to this Agreement. Optionee further
agrees to notify the Company upon any change in the residence address indicated below.

	 	 	 	 	 	 	 
	OPTIONEE

	 	 	 	SIPEX CORPORATION	 	 
	 
	 	 	 	 	 	 
	/s/ Ralph Schmitt

	 	 	 	/s/ Clyde R. Wallin	 	 
	 

Signature: Ralph Schmitt

	 	 	 	 

By: Clyde R. Wallin
	 	 
	 

	 	 	 	Title: CFO	 	 

-8-

 

EXHIBIT A

SIPEX CORPORATION

EXERCISE NOTICE

SIPEX Corporation

233 South Hillview Drive

Milpitas, CA 95053

Attention:

     1. Exercise of Option. Effective as of today,                     , 20___, the undersigned
(“Purchaser”) hereby elects to purchase                                 shares (the “Shares”) of the Common Stock of
SIPEX Corporation (the “Company”) under and pursuant to the Stock Option Agreement dated June ___,
2005 (the “Option Agreement”). The purchase price for the Shares shall be $1.70, as required by
the Option Agreement. Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Option Agreement.

     2. Delivery of Payment. Purchaser herewith delivers to the Company the full purchase
price for the Shares.

     3. Representations of Purchaser. Purchaser acknowledges that Purchaser has received,
read and understood the Option Agreement and agrees to abide by and be bound by their terms and
conditions.

     4. Rights as Shareholder. Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the Company) of the Shares,
no right to vote or receive dividends or any other rights as a stockholder shall exist with respect
to the Optioned Stock, notwithstanding the exercise of the Option. The Shares so acquired shall be
issued to the Optionee as soon as practicable after exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the date of issuance,
except as provided in Section 11 of the Option Agreement.

     5. Tax Consultation. Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser
represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in
connection with the purchase or disposition of the Shares and that Purchaser is not relying on the
Company for any tax advice.

     6. Successors and Assigns. The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this Exercise Notice shall inure to the
benefit of the successors and assigns of the Company. Subject to the restrictions on transfer
herein set forth,

 

 

this Exercise Notice shall be binding upon Optionee and his or her heirs, executors,
administrators, successors and assigns.

     7. Interpretation. Any dispute regarding the interpretation of this Exercise Notice
shall be submitted by Optionee or by the Company forthwith to the Administrator which shall review
such dispute at its next regular meeting. The resolution of such a dispute by the Administrator
shall be final and binding on all parties.

     8. Entire Agreement; Governing Law. The Option Agreement is incorporated herein by
reference. This Agreement, and the Option Agreement constitute the entire agreement of the parties
with respect to the subject matter hereof and supersede in their entirety all prior undertakings
and agreements of the Company and Purchaser with respect to the subject matter hereof, and may not
be modified adversely to the Purchaser’s interest except by means of a writing signed by the
Company and Purchaser. This agreement is governed by the internal substantive laws, but not the
choice of law rules, of California.

	 	 	 	 	 	 	 
	Submitted by:

	 	 	 	Accepted by:	 	 
	 
	 	 	 	 	 	 
	OPTIONEE

	 	 	 	SIPEX CORPORATION	 	 
	 
	 

Signature

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Print Name
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Address:

	 	 	 	Address:	 	 
	 

	 	 	 	233 South Hillview Drive	 	 
	 
	 

	 	 
	 	Milpitas, CA 95053	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 

	 	Date Received:	 	 	 	 
	 

	 	 	 

	 	 

-2-

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