Document:

exv10w1

 

Exhibit 10.1

	 	 	 
	Optionee:

	 	«Optionee»
	Grant:

	 	«Grant_Amt»
	Nonqualified:

	 	«NSO_Amt»
	Exercise Price:

	 	$«Share_Price»

EntreMed, Inc. 2001 Long-Term Incentive Plan

Non-QUALIFIED Stock Option Grant Agreement

     This Stock Option Grant Agreement (the “Agreement”) is entered into on «Grant_Date», by and
between EntreMed, Inc., a Delaware corporation (the “Corporation”), and «Optionee» (the
“Optionee”), effective as of «Grant_Date» (the “Grant Date”).

     In consideration of the premises, mutual covenants and agreements herein, the Corporation and
the Optionee agree as follows:

     1. Grant of Option. The Corporation hereby grants to the Optionee, pursuant to the
EntreMed, Inc. 2001 Long-Term Incentive Plan (the “Plan”), a stock option to purchase from the
Corporation, at a price of $«Share_Price» per share (the “Exercise Price”), up to «Grant_Amt»
shares of Common Stock of the Corporation, $.01 par value, subject to the provisions of this
Agreement and the Plan (the “Option”). The Option shall expire at 5:00 p.m. Eastern Time on the
last business day preceding the tenth anniversary of the Grant Date (the “Expiration Date”), unless
fully exercised or terminated earlier.

     2. Terminology. Unless stated otherwise in this Agreement, capitalized terms in this
Agreement shall have the meaning set forth in the Plan. Except where the context otherwise
requires, the term “Corporation” shall include EntreMed, Inc. and its Affiliates under this
Agreement.

     3. Exercise of Option.

          (a) Right to Exercise. Except as otherwise provided in this Agreement, this Option
may be exercised as to any portion of the Option that is exercisable, in whole or in part, on or
before the Expiration Date or earlier termination of the Option, in installments as to not more
than the number of shares set forth in the table below during the respective installment periods
set forth in the table below; provided that the Optionee is in the continuous employ of the
Corporation from the Grant Date through the applicable date upon which such shares become
exercisable. The number of shares set forth under the column entitled “Incentive” shall be
incentive stock options.

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	 	 	Number of Shares as to
	 	 	Which Option is Exercisable
	Exercise Period	 	Nonqualified
	On or after «Date_Vest1»

	 	«AmtVested_1»
	but before «Expires»
	 	 
	 
	 	 
	On or after «Date_Vest2»

	 	«AmtVested_2»
	but before «Expires»
	 	 
	 
	 	 
	On or after «Date_Vest3»

	 	«AmtVested_3»
	but before «Expires»
	 	 
	 
	 	 
	On or after «Date_Vest4»

	 	«AmtVested_4»
	but before «Expires»
	 	 

To the extent not exercised, the number of shares as to which the Option is exercisable shall
accumulate and remain exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the Expiration Date or other termination of the Option. In the event of the
Optionee’s termination of employment, the exercisability is governed by Section 4.

          (b) Exercise Procedure. Subject to the conditions set forth in this Agreement, the
Option shall be exercised (to the extent then exercisable) by delivery of written notice of
exercise on any business day to the Corporate Secretary of the Corporation in such form as the
Administrator may require from time to time. Such notice shall specify the number of shares in
respect to which the Option is being exercised and shall be accompanied by full payment of the
Exercise Price for such shares in accordance with Section 3(d) of this Agreement. The exercise
shall be effective upon receipt by the Corporate Secretary of the Corporation of such written
notice accompanied by the required payment. The Option may be exercised only in multiples of whole
shares and may not be exercised at any one time as to fewer than one hundred shares (or such lesser
number of shares as to which the Option is then exercisable). No fractional shares shall be issued
pursuant to this Option.

          (c) Effect. The exercise, in whole or in part, of the Option shall cause a reduction
in the number of shares of Common Stock subject to the Option equal to the number of shares of
Common Stock with respect to which the Option is exercised.

          (d) Method of Payment. In addition to any other method approved by the Administrator,
if any, payment of the Exercise Price shall be by any of the following, or a combination thereof,
as determined by the Administrator in its discretion at the time of exercise:

                (i) by delivery of cash, certified or cashier’s check, or money order;

                (ii) by tender (via actual delivery or attestation) to the Corporation of other shares of
Common Stock of the Corporation which have a Fair Market Value on the date of tender equal to the
Exercise Price, provided that such shares have been owned by the Optionee for a minimum period of
time specified by the Administrator; or

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                (iii) by a broker-assisted cashless exercise in accordance with Regulation T of the Board of
Governors of the Federal Reserve System and the following provisions. Subject to such limitations
as the Administrator may determine, at any time during which the Common Stock is publicly traded on
a national securities exchange or Nasdaq, the Exercise Price shall be deemed to be paid, in whole
or in part, if the Optionee delivers a properly executed exercise notice, together with irrevocable
instructions: (i) to a brokerage firm approved by the Corporation to deliver promptly to the
Corporation the aggregate amount of sale or loan proceeds to pay the Exercise Price and any
withholding tax obligations that may arise in connection with the exercise; and (ii) to the
Corporation to deliver the certificates for such purchased shares directly to such brokerage firm.

          (e) Issuance of Shares Upon Exercise. Upon due exercise of the Option, in whole or in
part, in accordance with the terms of this Agreement, the Corporation shall issue to the Optionee,
the brokerage firm specified in the Optionee’s delivery instructions pursuant to a broker-assisted
cashless exercise, or such other person exercising the Option, as the case may be, the number of
shares of Common Stock so paid for, in the form of fully paid and non-assessable stock and shall
deliver certificates therefor as soon as practicable thereafter.

          (f) Restrictions on Exercise and upon Shares Issued upon Exercise. Notwithstanding any
other provision of the Agreement, the Option may not be exercised at any time that the Corporation
does not have in effect a registration statement under the Securities Act of 1933, as amended,
relating to the offer of Common Stock to the Optionee under the Plan, unless the Corporation agrees
to permit such exercise. Upon the issuance of any shares of Common Stock pursuant to the exercise
of the Option, the Optionee will, upon the request of the Corporation, agree in writing that the
Optionee is acquiring such shares for investment only and not with a view to resale, and that the
Optionee will not sell, pledge or otherwise dispose of such shares so issued unless (i) the
Corporation is furnished with an opinion of counsel to the effect that registration of such shares
pursuant to the Securities Act of 1933, as amended, is not required by that Act or by the rules and
regulations thereunder; (ii) the staff of the Securities and Exchange Commission has issued a
“no-action” letter with respect to such disposition; or (iii) such registration or notification as
is, in the opinion of counsel for the Corporation, required for the lawful disposition of such
shares has been filed by the Corporation and has become effective; provided, however, that the
Corporation is not obligated hereby to file any such registration or notification. The Corporation
may place a legend embodying such restrictions on the certificates evidencing such shares.

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     4. Adjustments and Business Combinations.

          (a) Adjustments for Events Affecting Common Stock. In the event of changes in the
Common Stock of the Corporation by reason of any stock dividend, spin-off, split-up, reverse stock
split, recapitalization, reclassification, merger, consolidation, liquidation, business combination
or exchange of shares and the like, the Administrator shall, in its discretion, make appropriate
substitutions for or adjustments in the number, kind and price of shares covered by this Option,
and shall, in its discretion and without the consent of the Optionee, make any other substitutions
for or adjustments in this Option, including but not limited to reducing the number of shares
subject to the Option or providing or mandating alternative settlement methods such as settlement
of the Option in cash or in shares of Common Stock or other securities of the Corporation or of any
other entity, or in any other matters which relate to the Option as the Administrator shall, in its
sole discretion, determine to be necessary or appropriate.

          (b) Pooling of Interests Transaction. Notwithstanding anything in the Plan or this
Agreement to the contrary and without the consent of the Optionee, the Administrator, in its sole
discretion, may make any modifications to the Option, including but not limited to cancellation,
forfeiture, surrender or other termination of the Option in whole or in part regardless of the
vested status of the Option, in order to facilitate any business combination that is authorized by
the Board to comply with requirements for treatment as a pooling of interests transaction for
accounting purposes under generally accepted accounting principles.

          (c) Adjustments for Other Events. The Administrator is authorized to make, in its
discretion and without the consent of the Optionee, adjustments in the terms and conditions of, and
the criteria included in, the Option in recognition of unusual or nonrecurring events affecting the
Corporation, or the financial statements of the Corporation, or of changes in applicable laws,
regulations, or accounting principles, whenever the Administrator determines that such adjustments
are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Option or the Plan.

          (d) Binding Nature of Adjustments. Adjustments under this Section 5 will be made by
the Administrator, whose determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive. No fractional shares will be issued pursuant to
this Option on account of any such adjustments.

          (e) Effect of Change of Control Event. All outstanding portions of the Option, if
any, shall become fully exercisable for a period of sixty days following the occurrence of any
Change of Control Event, whether or not such portions are then exercisable under the provisions of
this Agreement.

                (i) “Change of Control Event” shall mean any one of the following events: (A) the date on
which shares of Common Stock are first purchased
pursuant to a tender offer or exchange offer (other than such an offer by the Corporation, any
employee benefit plan of the Corporation or any entity holding shares or other securities of the
Corporation for or

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pursuant to the terms of such plan), whether or not such offer is approved or opposed by the
Corporation and regardless of the number of shares purchased pursuant to such offer; (B) the date
the Corporation acquires knowledge that any person or group deemed a person under Section 13(d)-3
of the Exchange Act (other than the Corporation, any employee benefit plan of the Corporation or
any entity holding shares of Common Stock or other securities of the Corporation for or pursuant to
the terms of any such plan or any individual or entity or group or affiliate thereof which acquired
its beneficial ownership interest prior to the date the Plan was adopted by the Board), in a
transaction or series of transactions, has become the beneficial owner, directly or indirectly
(with beneficial ownership determined as provided in Rule 13d-3, or any successor rule, under the
Exchange Act), of securities of the Corporation entitling the person or group to 30% or more of all
votes (without consideration of the rights of any class or stock to elect directors by a separate
class vote) to which all stockholders of the Corporation would be entitled in the election of the
Board, were an election held on such date; (C) the date, during any period of two consecutive
years, when individuals who at the beginning of such period constitute the Board or the Corporation
cease for any reason to constitute at least a majority thereof, unless the election, or the
nomination for election by the stockholders of the Corporation, of each new director was approved
by a vote of at least two-thirds of the directors then still in office who were directors at the
beginning of such period; and (D) the date of approval by the stockholders of the Corporation of an
agreement (a “reorganization agreement”) providing for: (1) the merger or consolidation of the
Corporation with another corporation where the stockholders of the Corporation, immediately prior
to the merger or consolidation, do not beneficially own, immediately after the merger or
consolidation, shares of the corporation issuing cash or securities in the merger or consolidation
entitling such stockholders to 65% or more of all votes (without consideration of the rights of any
class of stock to elect directors by a separate class vote) to which all stockholders of such
corporation would be entitled in the election of directors or where the members of the Board or the
Corporation, immediately prior to the merger or consolidation, do not, immediately after the merger
or consolidation, constitute a majority of the board of directors of the corporation issuing cash
or securities in the merger or consolidation; or (2) the sale or other disposition of all or
substantially all the assets of the Corporation.

          (f) Non-Survival of Corporation. In the event of any sale, merger, transfer or
acquisition of the Corporation or substantially all of the assets of the Corporation in which the
Corporation is not the surviving corporation, and provided that when the Corporation requests the
succeeding corporation (or an affiliate thereof), that an equivalent stock option be substituted
and such successor corporation refuses or fails to assume the outstanding portions of the Option,
if any, or issue a substantially equivalent stock option, then any or all outstanding portions of
the Option shall accelerate and become exercisable in full immediately prior to such event. The
Administrator will notify the Optionee that any such portions of the Option will be fully
exercisable for fifteen days from the date of such notice, and the Option will terminate upon
expiration of such notice.

     5. Non-Guarantee of Employment. Nothing in the Plan or in this Agreement shall confer
on an individual any legal or equitable right against the Corporation or the Administrator, except
as expressly provided in the Plan or this Agreement. Nothing in the Plan or in this Agreement
shall (a) constitute inducement, consideration, or contract for employment or service between an
individual and the Corporation; (b) confer any right on an individual to continue in the service of
the Corporation; or (c) shall interfere in any way with the right of the Corporation
to terminate such service at any time with or without cause or notice, or to increase or
decrease compensation for such service.

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     6. No Rights as Stockholder. The Optionee shall not have any of the rights of a
stockholder with respect to the shares of Common Stock that may be issued upon the exercise of the
Option (including, without limitation, any rights to receive dividends or noncash distributions
with respect to such shares) until such shares of Common Stock have been issued to him or her upon
the due exercise of the Option. No adjustment shall be made for dividends or distributions or
other rights for which the record date is prior to the date such certificate or certificates are
issued.

     7. Incentive/Nonqualified Nature of the Option. The option hereby granted is intended
to qualify as an incentive stock option within the meaning of Section 422A of the Code to the
extent set forth herein; provided, however, to the extent that the aggregate «Expires»fair market
value as of the date of this grant, of the shares into which this option becomes exercisable for
the first time by the Optionee during the calendar year exceeds $100,000, the portion of this
option which is in excess of the $100,000 limitation will be treated as a nonqualified stock
option. The Optionee hereby agrees to notify the Company of any early disposition of Shares.

     8. Withholding of Taxes.

          (a) In General. At the time the Option is exercised in whole or in part, or at any
time thereafter as requested by the Corporation, the Optionee hereby authorizes withholding from
payroll or any other payment of any kind due the Optionee and otherwise agrees to make adequate
provision for foreign, federal, state and local taxes required by law to be withheld, if any, which
arise in connection with the Option. The Corporation may require the Optionee to make a cash
payment to cover any withholding tax obligation as a condition of exercise of the Option. If the
Optionee does not make such payment when requested, the Corporation may refuse to issue any stock
certificate under the Plan until arrangements satisfactory to the Administrator for such payment
have been made.

          (b) Means of Payment. The Administrator may, in its sole discretion, permit the
Optionee to satisfy, in whole or in part, any withholding tax obligation which may arise in
connection with the Option by any of the following means or by a combination of such means: (i)
tendering a cash payment, (ii) authorizing the Corporation to deduct any such tax obligations from
any payment of any kind otherwise due to the Optionee, (iii) authorizing the Corporation to
withhold shares of Common Stock otherwise issuable to the Optionee pursuant to the exercise of this
Option, or (iv) delivering to the Corporation unencumbered shares of Common Stock already owned by
the Optionee.

          (c) Disposition of Shares. The acceptance of shares of Common Stock upon exercise of
this Option shall constitute an agreement by the Optionee (i) to notify the Corporation if any of
such shares are disposed of by the Optionee within two years from the Grant Date or within one year
from the date the shares were issued to the Optionee pursuant to the exercise of the Option, and
(ii) if required by law, to remit to the Corporation, at the time of any such disposition, an
amount sufficient to satisfy the Corporation’s withholding tax
obligations with respect to such disposition, whether or not, as to both (i) and (ii), the
Optionee is employed by or has any other relationship with the Corporation at the time of such
disposition.

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     9. The Corporation’s Rights. The existence of this Option shall not affect in any way
the right or power of the Corporation or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the Corporation’s capital
structure or its business, or any merger or consolidation of the Corporation, or any issue of
bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or
otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of
the Corporation, or any sale or transfer of all or any part of the Corporation’s assets or
business, or any other corporate act or proceeding, whether of a similar character or otherwise.

     10. Optionee. Whenever the word “Optionee” is used in any provision of this Agreement
under circumstances where the provision should logically be construed, as determined by the
Administrator, to apply to the estate, personal representative or beneficiary to whom this Option
may be transferred by will, by the laws of descent and distribution, or pursuant to a qualified
domestic relations order as defined in Code section 414(p), the word “Optionee” shall be deemed to
include such person.

     11. Transferability of Option. This Option is not transferable other than by will or
the laws of descent and distribution, pursuant to a qualified domestic relations order as defined
in Code section 414(p), or as otherwise permitted by the Administrator, in its sole discretion.
During the lifetime of the Optionee, the Option may be exercised only by the Optionee, by such
permitted transferees or, during the period the Optionee is under a legal disability, by the
Optionee’s guardian or legal representative. Except as provided above, the Option may not be
assigned, transferred, pledged, hypothecated or disposed of in any way (whether by operation of law
or otherwise) and shall not be subject to execution, attachment or similar process.

     12. Notices. All notices and other communications made or given pursuant to this
Agreement shall be in writing and shall be sufficiently made or given if hand delivered or mailed
by certified mail, addressed to the Optionee at the address contained in the records of the
Corporation, or addressed to the Administrator, care of the Corporation for the attention of its
Corporate Secretary at its principal office or, if the receiving party consents in advance,
transmitted and received via telecopy or via such other electronic transmission mechanism as may be
available to the parties.

     13. Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the Option granted hereunder. Any oral or written agreements,
representations, warranties, written inducements, or other communications made prior to the
execution of this Agreement with respect to the Option granted hereunder shall be void and
ineffective for all purposes.

     14. Amendment. This Agreement may not be modified, except as provided in the Plan or
in a written document signed by each of the parties hereto.

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     15. Conformity with Plan. This Agreement is intended to conform in all respects with,
and is subject to all applicable provisions of, the Plan, which is incorporated herein by
reference. Inconsistencies between this Agreement and the Plan shall be resolved in
accordance with the terms of the Plan. In the event of any ambiguity in this Agreement or any
matters as to which this Agreement is silent, the Plan shall govern. A copy of the Plan is
available upon request to the Administrator.

     16. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, other than the conflict of laws principles thereof.

     17. Headings. The headings in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.

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     IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its duly
authorized officer as of the date first above written.

ENTREMED, INC.

                                                            

Dane R. Saglio

Chief Financial Officer

The undersigned hereby acknowledges that he/she has carefully read this Agreement and the
prospectus of the Plan and agrees to be bound by all of the provisions set forth in such documents.

	 	 	 
	OPTIONEE
	 	 
	 
	 	 
	                                                            

	 	Date:                                                             

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EXERCISE FORM

EntreMed, Inc.

9640 Medical Center Drive

Rockville, Maryland 20850

Gentlemen:

     I hereby exercise the Option granted to me on ___, by EntreMed, Inc. (the
“Corporation”), subject to all the terms and provisions thereof and of the EntreMed, Inc. 2001
Long-Term Incentive Plan (the “Plan”), and notify you of my desire to purchase ___
incentive shares and ___ non-qualified shares of Common Stock of the Corporation at a
price of $  per share pursuant to the exercise of said Option.

Payment Amount: $____________________

	 	 	 
	Date:                                                             

	 	                                                            
	

	 	Optionee Signature
	 
	 	 
	

	 	Received by EntreMed, Inc. on
	 
	 	 
	

	 	                                                            

Broker Information:

Firm Name

			
	Contact Person
	 	 

			
	Broker Address
	 	 

					
	City, State, Zip Code
	 	Phone Number
	 	 

			
	Broker Account Number
	 	 

			
	Electronic Transfer Number:
	 	 

10exv10w2

 

Exhibit 10.2

	 	 	 
	Optionee:

	 	«Optionee»
	Grant:

	 	«Grant_Amt»
	Nonqualified:

	 	«NSO_Amt»
	Exercise Price:

	 	$«Share_Price»

EntreMed, Inc. 2001 Long-Term Incentive Plan

Non-QUALIFIED Stock Option Grant Agreement

     This Stock Option Grant Agreement (the “Agreement”) is entered into on «Grant_Date», by and
between EntreMed, Inc., a Delaware corporation (the “Corporation”), and «Optionee» (the
“Optionee”), effective as of «Grant_Date» (the “Grant Date”).

     In consideration of the premises, mutual covenants and agreements herein, the Corporation and
the Optionee agree as follows:

     1. Grant of Option. The Corporation hereby grants to the Optionee, pursuant to the
EntreMed, Inc. 2001 Long-Term Incentive Plan (the “Plan”), a stock option to purchase from the
Corporation, at a price of $«Share_Price» per share (the “Exercise Price”), up to «Grant_Amt»
shares of Common Stock of the Corporation, $.01 par value, subject to the provisions of this
Agreement and the Plan (the “Option”). The Option shall expire at 5:00 p.m. Eastern Time on the
last business day preceding the tenth anniversary of the Grant Date (the “Expiration Date”), unless
fully exercised or terminated earlier.

     2. Terminology. Unless stated otherwise in this Agreement, capitalized terms in this
Agreement shall have the meaning set forth in the Plan. Except where the context otherwise
requires, the term “Corporation” shall include EntreMed, Inc. and its Affiliates under this
Agreement.

     3. Exercise of Option.

          (a) Right to Exercise. Except as otherwise provided in this Agreement, this Option
may be exercised as to any portion of the Option that is exercisable, in whole or in part, on or
before the Expiration Date or earlier termination of the Option, in installments as to not more
than the number of shares set forth in the table below during the respective installment periods
set forth in the table below; provided that the Optionee is in the continuous employ of the
Corporation from the Grant Date through the applicable date upon which such shares become
exercisable. The number of shares set forth under the column entitled “Incentive” shall be
incentive stock options.

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	 	 	Number of Shares as to
	 	 	Which Option is Exercisable
	Exercise Period	 	Nonqualified
	On or after «Date_Vest1»

but before «Expires»

	 	«AmtVested_1»
	 
	 	 
	On or after «Date_Vest2»

but before «Expires»

	 	«AmtVested_2»
	 
	 	 
	On or after «Date_Vest3»

but before «Expires»

	 	«AmtVested_3»
	 
	 	 
	On or after «Date_Vest4»

but before «Expires»

	 	«AmtVested_4»

To the extent not exercised, the number of shares as to which the Option is exercisable shall
accumulate and remain exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the Expiration Date or other termination of the Option. In the event of the
Optionee’s termination of employment, the exercisability is governed by Section 4.

          (b) Exercise Procedure. Subject to the conditions set forth in this Agreement, the
Option shall be exercised (to the extent then exercisable) by delivery of written notice of
exercise on any business day to the Corporate Secretary of the Corporation in such form as the
Administrator may require from time to time. Such notice shall specify the number of shares in
respect to which the Option is being exercised and shall be accompanied by full payment of the
Exercise Price for such shares in accordance with Section 3(d) of this Agreement. The exercise
shall be effective upon receipt by the Corporate Secretary of the Corporation of such written
notice accompanied by the required payment. The Option may be exercised only in multiples of whole
shares and may not be exercised at any one time as to fewer than one hundred shares (or such lesser
number of shares as to which the Option is then exercisable). No fractional shares shall be issued
pursuant to this Option.

          (c) Effect. The exercise, in whole or in part, of the Option shall cause a reduction
in the number of shares of Common Stock subject to the Option equal to the number of shares of
Common Stock with respect to which the Option is exercised.

          (d) Method of Payment. In addition to any other method approved by the Administrator,
if any, payment of the Exercise Price shall be by any of the following, or a combination thereof,
as determined by the Administrator in its discretion at the time of exercise:

               (i) by delivery of cash, certified or cashier’s check, or money order;

               (ii) by tender (via actual delivery or attestation) to the Corporation of other shares of
Common Stock of the Corporation which have a Fair Market Value on the date of
tender equal to the Exercise Price, provided that such shares have been owned by the Optionee
for a minimum period of time specified by the Administrator; or

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               (iii) by a broker-assisted cashless exercise in accordance with Regulation T of the Board of
Governors of the Federal Reserve System and the following provisions. Subject to such limitations
as the Administrator may determine, at any time during which the Common Stock is publicly traded on
a national securities exchange or Nasdaq, the Exercise Price shall be deemed to be paid, in whole
or in part, if the Optionee delivers a properly executed exercise notice, together with irrevocable
instructions: (i) to a brokerage firm approved by the Corporation to deliver promptly to the
Corporation the aggregate amount of sale or loan proceeds to pay the Exercise Price and any
withholding tax obligations that may arise in connection with the exercise; and (ii) to the
Corporation to deliver the certificates for such purchased shares directly to such brokerage firm.

          (e) Issuance of Shares Upon Exercise. Upon due exercise of the Option, in whole or in
part, in accordance with the terms of this Agreement, the Corporation shall issue to the Optionee,
the brokerage firm specified in the Optionee’s delivery instructions pursuant to a broker-assisted
cashless exercise, or such other person exercising the Option, as the case may be, the number of
shares of Common Stock so paid for, in the form of fully paid and non-assessable stock and shall
deliver certificates therefor as soon as practicable thereafter.

          (f) Restrictions on Exercise and upon Shares Issued upon Exercise. Notwithstanding any
other provision of the Agreement, the Option may not be exercised at any time that the Corporation
does not have in effect a registration statement under the Securities Act of 1933, as amended,
relating to the offer of Common Stock to the Optionee under the Plan, unless the Corporation agrees
to permit such exercise. Upon the issuance of any shares of Common Stock pursuant to the exercise
of the Option, the Optionee will, upon the request of the Corporation, agree in writing that the
Optionee is acquiring such shares for investment only and not with a view to resale, and that the
Optionee will not sell, pledge or otherwise dispose of such shares so issued unless (i) the
Corporation is furnished with an opinion of counsel to the effect that registration of such shares
pursuant to the Securities Act of 1933, as amended, is not required by that Act or by the rules and
regulations thereunder; (ii) the staff of the Securities and Exchange Commission has issued a
“no-action” letter with respect to such disposition; or (iii) such registration or notification as
is, in the opinion of counsel for the Corporation, required for the lawful disposition of such
shares has been filed by the Corporation and has become effective; provided, however, that the
Corporation is not obligated hereby to file any such registration or notification. The Corporation
may place a legend embodying such restrictions on the certificates evidencing such shares.

     4. Termination of Employment or Other Relationship. Except as otherwise determined by
the Administrator, and subject to the provisions of the Plan, the Optionee may exercise this Option
at any time within three months following the termination of the Optionee ‘s employment or other
relationship with the Corporation or by the Optionee’s legal representatives or beneficiaries
within 12 months if such termination was due to the death or disability of the Optionee, but, in no
event later than the Expiration Date of the Option and only to the extent that the Option is
exercisable by the grantee on the date of termination, death, or disability.

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     If the termination of the Optionee’s employment is for cause or is otherwise attributable to a
breach by the Optionee of an employment or confidentiality or nondisclosure agreement, the Option
shall expire immediately upon such termination. The Board shall have the power to determine what
constitutes a termination for cause or a breach of an employment or confidentiality or
nondisclosure agreement, whether an Optionee has been terminated for cause or has breached such an
agreement, and the date upon which such termination for cause or breach occurs. Any such
determinations shall be conclusive and binding upon the Optionee.

     5. Adjustments and Business Combinations.

          (a) Adjustments for Events Affecting Common Stock. In the event of changes in the
Common Stock of the Corporation by reason of any stock dividend, spin-off, split-up, reverse stock
split, recapitalization, reclassification, merger, consolidation, liquidation, business combination
or exchange of shares and the like, the Administrator shall, in its discretion, make appropriate
substitutions for or adjustments in the number, kind and price of shares covered by this Option,
and shall, in its discretion and without the consent of the Optionee, make any other substitutions
for or adjustments in this Option, including but not limited to reducing the number of shares
subject to the Option or providing or mandating alternative settlement methods such as settlement
of the Option in cash or in shares of Common Stock or other securities of the Corporation or of any
other entity, or in any other matters which relate to the Option as the Administrator shall, in its
sole discretion, determine to be necessary or appropriate.

          (b) Pooling of Interests Transaction. Notwithstanding anything in the Plan or this
Agreement to the contrary and without the consent of the Optionee, the Administrator, in its sole
discretion, may make any modifications to the Option, including but not limited to cancellation,
forfeiture, surrender or other termination of the Option in whole or in part regardless of the
vested status of the Option, in order to facilitate any business combination that is authorized by
the Board to comply with requirements for treatment as a pooling of interests transaction for
accounting purposes under generally accepted accounting principles.

          (c) Adjustments for Other Events. The Administrator is authorized to make, in its
discretion and without the consent of the Optionee, adjustments in the terms and conditions of, and
the criteria included in, the Option in recognition of unusual or nonrecurring events affecting the
Corporation, or the financial statements of the Corporation, or of changes in applicable laws,
regulations, or accounting principles, whenever the Administrator determines that such adjustments
are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Option or the Plan.

          (d) Binding Nature of Adjustments. Adjustments under this Section 5 will be made by
the Administrator, whose determination as to what adjustments, if any, will be made and the extent
thereof will be final, binding and conclusive. No fractional shares will be issued pursuant to
this Option on account of any such adjustments.

          (e) Effect of Change of Control Event. All outstanding portions of the Option, if
any, shall become fully exercisable for a period of sixty days following the occurrence
of any Change of Control Event, whether or not such portions are then exercisable under the
provisions of this Agreement.

4

 

          (i) “Change of Control Event” shall mean any one of the following events: (A) the date on
which shares of Common Stock are first purchased pursuant to a tender offer or exchange offer
(other than such an offer by the Corporation, any employee benefit plan of the Corporation or any
entity holding shares or other securities of the Corporation for or pursuant to the terms of such
plan), whether or not such offer is approved or opposed by the Corporation and regardless of the
number of shares purchased pursuant to such offer; (B) the date the Corporation acquires knowledge
that any person or group deemed a person under Section 13(d)-3 of the Exchange Act (other than the
Corporation, any employee benefit plan of the Corporation or any entity holding shares of Common
Stock or other securities of the Corporation for or pursuant to the terms of any such plan or any
individual or entity or group or affiliate thereof which acquired its beneficial ownership interest
prior to the date the Plan was adopted by the Board), in a transaction or series of transactions,
has become the beneficial owner, directly or indirectly (with beneficial ownership determined as
provided in Rule 13d-3, or any successor rule, under the Exchange Act), of securities of the
Corporation entitling the person or group to 30% or more of all votes (without consideration of the
rights of any class or stock to elect directors by a separate class vote) to which all stockholders
of the Corporation would be entitled in the election of the Board, were an election held on such
date; (C) the date, during any period of two consecutive years, when individuals who at the
beginning of such period constitute the Board or the Corporation cease for any reason to constitute
at least a majority thereof, unless the election, or the nomination for election by the
stockholders of the Corporation, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of such period; and (D)
the date of approval by the stockholders of the Corporation of an agreement (a “reorganization
agreement”) providing for: (1) the merger or consolidation of the Corporation with another
corporation where the stockholders of the Corporation, immediately prior to the merger or
consolidation, do not beneficially own, immediately after the merger or consolidation, shares of
the corporation issuing cash or securities in the merger or consolidation entitling such
stockholders to 65% or more of all votes (without consideration of the rights of any class of stock
to elect directors by a separate class vote) to which all stockholders of such corporation would be
entitled in the election of directors or where the members of the Board or the Corporation,
immediately prior to the merger or consolidation, do not, immediately after the merger or
consolidation, constitute a majority of the board of directors of the corporation issuing cash or
securities in the merger or consolidation; or (2) the sale or other disposition of all or
substantially all the assets of the Corporation.

          (f) Non-Survival of Corporation. In the event of any sale, merger, transfer or
acquisition of the Corporation or substantially all of the assets of the Corporation in which the
Corporation is not the surviving corporation, and provided that when the Corporation requests the
succeeding corporation (or an affiliate thereof), that an equivalent stock option be substituted
and such successor corporation refuses or fails to assume the outstanding portions of the Option,
if any, or issue a substantially equivalent stock option, then any or all outstanding portions of
the Option shall accelerate and become exercisable in full immediately prior to such event. The
Administrator will notify the Optionee that any such portions of the Option will be fully
exercisable for fifteen days from the date of such notice, and the Option will terminate upon
expiration of such notice.

5

 

     6. Non-Guarantee of Employment. Nothing in the Plan or in this Agreement shall confer
on an individual any legal or equitable right against the Corporation or the Administrator, except
as expressly provided in the Plan or this Agreement. Nothing in the Plan or in this Agreement
shall (a) constitute inducement, consideration, or contract for employment or service between an
individual and the Corporation; (b) confer any right on an individual to continue in the service of
the Corporation; or (c) shall interfere in any way with the right of the Corporation to terminate
such service at any time with or without cause or notice, or to increase or decrease compensation
for such service.

     7. No Rights as Stockholder. The Optionee shall not have any of the rights of a
stockholder with respect to the shares of Common Stock that may be issued upon the exercise of the
Option (including, without limitation, any rights to receive dividends or noncash distributions
with respect to such shares) until such shares of Common Stock have been issued to him or her upon
the due exercise of the Option. No adjustment shall be made for dividends or distributions or
other rights for which the record date is prior to the date such certificate or certificates are
issued.

     8. Incentive/Nonqualified Nature of the Option. The option hereby granted is intended
to qualify as an incentive stock option within the meaning of Section 422A of the Code to the
extent set forth herein; provided, however, to the extent that the aggregate fair market value as
of the date of this grant, of the shares into which this option becomes exercisable for the first
time by the Optionee during the calendar year exceeds $100,000, the portion of this option which is
in excess of the $100,000 limitation will be treated as a nonqualified stock option. The Optionee
hereby agrees to notify the Company of any early disposition of Shares.

     9. Withholding of Taxes.

          (a) In General. At the time the Option is exercised in whole or in part, or at any
time thereafter as requested by the Corporation, the Optionee hereby authorizes withholding from
payroll or any other payment of any kind due the Optionee and otherwise agrees to make adequate
provision for foreign, federal, state and local taxes required by law to be withheld, if any, which
arise in connection with the Option. The Corporation may require the Optionee to make a cash
payment to cover any withholding tax obligation as a condition of exercise of the Option. If the
Optionee does not make such payment when requested, the Corporation may refuse to issue any stock
certificate under the Plan until arrangements satisfactory to the Administrator for such payment
have been made.

          (b) Means of Payment. The Administrator may, in its sole discretion, permit the
Optionee to satisfy, in whole or in part, any withholding tax obligation which may arise in
connection with the Option by any of the following means or by a combination of such means: (i)
tendering a cash payment, (ii) authorizing the Corporation to deduct any such tax obligations from
any payment of any kind otherwise due to the Optionee, (iii) authorizing the Corporation to
withhold shares of Common Stock otherwise issuable to the Optionee pursuant to the exercise of this
Option, or (iv) delivering to the Corporation unencumbered shares of Common Stock already owned by
the Optionee.

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          (c) Disposition of Shares. The acceptance of shares of Common Stock upon exercise of
this Option shall constitute an agreement by the Optionee (i) to notify the Corporation if any of
such shares are disposed of by the Optionee within two years from the Grant Date or within one year
from the date the shares were issued to the Optionee pursuant to the exercise of the Option, and
(ii) if required by law, to remit to the Corporation, at the time of any such disposition, an
amount sufficient to satisfy the Corporation’s withholding tax obligations with respect to such
disposition, whether or not, as to both (i) and (ii), the Optionee is employed by or has any other
relationship with the Corporation at the time of such disposition.

     10. The Corporation’s Rights. The existence of this Option shall not affect in any
way the right or power of the Corporation or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the Corporation’s capital
structure or its business, or any merger or consolidation of the Corporation, or any issue of
bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or
otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of
the Corporation, or any sale or transfer of all or any part of the Corporation’s assets or
business, or any other corporate act or proceeding, whether of a similar character or otherwise.

     11. Optionee. Whenever the word “Optionee” is used in any provision of this Agreement
under circumstances where the provision should logically be construed, as determined by the
Administrator, to apply to the estate, personal representative or beneficiary to whom this Option
may be transferred by will, by the laws of descent and distribution, or pursuant to a qualified
domestic relations order as defined in Code section 414(p), the word “Optionee” shall be deemed to
include such person.

     12. Transferability of Option. This Option is not transferable other than by will or
the laws of descent and distribution, pursuant to a qualified domestic relations order as defined
in Code section 414(p), or as otherwise permitted by the Administrator, in its sole discretion.
During the lifetime of the Optionee, the Option may be exercised only by the Optionee, by such
permitted transferees or, during the period the Optionee is under a legal disability, by the
Optionee’s guardian or legal representative. Except as provided above, the Option may not be
assigned, transferred, pledged, hypothecated or disposed of in any way (whether by operation of law
or otherwise) and shall not be subject to execution, attachment or similar process.

     13. Notices. All notices and other communications made or given pursuant to this
Agreement shall be in writing and shall be sufficiently made or given if hand delivered or mailed
by certified mail, addressed to the Optionee at the address contained in the records of the
Corporation, or addressed to the Administrator, care of the Corporation for the attention of its
Corporate Secretary at its principal office or, if the receiving party consents in advance,
transmitted and received via telecopy or via such other electronic transmission mechanism as may be
available to the parties.

     14. Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the Option granted hereunder. Any oral or written agreements,
representations, warranties, written inducements, or other communications made prior to the
execution of this Agreement with respect to the Option granted hereunder shall be void and
ineffective for all purposes.

7

 

     15. Amendment. This Agreement may not be modified, except as provided in the Plan or
in a written document signed by each of the parties hereto.

     16. Conformity with Plan. This Agreement is intended to conform in all respects with,
and is subject to all applicable provisions of, the Plan, which is incorporated herein by
reference. Inconsistencies between this Agreement and the Plan shall be resolved in accordance
with the terms of the Plan. In the event of any ambiguity in this Agreement or any matters as to
which this Agreement is silent, the Plan shall govern. A copy of the Plan is available upon
request to the Administrator.

     17. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, other than the conflict of laws principles thereof.

     18. Headings. The headings in this Agreement are for reference purposes only and
shall not affect the meaning or interpretation of this Agreement.

8

 

     IN WITNESS WHEREOF, the Corporation has caused this Agreement to be executed by its duly
authorized officer as of the date first above written.

ENTREMED, INC.

Dane R. Saglio

Chief Financial Officer

The undersigned hereby acknowledges that he/she has carefully read this Agreement and the
prospectus of the Plan and agrees to be bound by all of the provisions set forth in such documents.

	 	 	 
	OPTIONEE
	 	 
	 
	 	 
	 	Date:	 
	
	 	

9

 

EXERCISE FORM

EntreMed, Inc.

9640 Medical Center Drive

Rockville, Maryland 20850

Gentlemen:

     I hereby exercise the Option granted to me on ___, by EntreMed, Inc. (the
“Corporation”), subject to all the terms and provisions thereof and of the EntreMed, Inc. 2001
Long-Term Incentive Plan (the “Plan”), and notify you of my desire to purchase ___
incentive shares and ___non-qualified shares of Common Stock of the Corporation at a
price of $  per share pursuant to the exercise of said Option.

Payment Amount: $____________________

	 	 	 
	Date:                                                             

	 	                                                            
	

	 	Optionee Signature
	 
	 	 
	

	 	Received by EntreMed, Inc. on
	 
	 	 
	

	 	                                                            

Broker Information:

Firm Name

			
	Contact Person
	 	 

			
	Broker Address
	 	 

					
	City, State, Zip Code
	 	Phone Number
	 	 

			
	Broker Account Number
	 	 

			
	Electronic Transfer Number:
	 	 

10

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