ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are
hereby made a part of, that certain Stock Option Agreement dated
_________________ (the "Option Agreement") by and between Atlantic
Pharmaceuticals, Inc. (the "Corporation") and __________________ ("Optionee")
evidencing the non-statutory stock option granted on such date to Optionee under
the terms of the Corporation's 1995 Stock Option Plan, and such provisions shall
be effective immediately. Capitalized terms in this Addendum, to the extent not
otherwise defined herein, shall have the meanings assigned to such terms in the
Option Agreement.
SPECIAL TAX ELECTIONS
1. Stock Withholding. Optionee is hereby granted the election
to have the Corporation withhold, at the time the option is exercised, a portion
of the purchased Option Shares with an aggregate Fair Market Value not to exceed
one hundred percent (100%) of the applicable Federal, state and local income and
employment tax withholding liability (the "Taxes") Optionee incurs in connection
with the option exercise.
Any such exercise of the election must be effected in
accordance with the following terms and conditions:
(i) The election must be made on or before the date
the liability for the Taxes is determined (the "Tax Determination
Date").
(ii) The election shall be irrevocable.
(iii) The election shall be subject to the approval
of the Plan Administrator, and none of the Option Shares shall be
withheld in satisfaction of the Taxes, except to the extent the
election is approved by the Plan Administrator.
(iv) The Option Shares withheld pursuant to the
election shall be valued at Fair Market Value on the Tax Determination
Date.
(v) In no event may the number of shares of Common
Stock requested to be withheld exceed in Fair Market Value the dollar
amount of the Taxes.
If the stock withholding election is made by Optionee
at a time when Optionee is an officer or director of the Corporation subject to
the short-swing profit
restrictions of Section 16(b) of the Securities Exchange Act of 1934, as
amended, then the following limitations, in addition to the preceding
provisions, shall also be applicable:
(i) The election shall not become effective at any
time prior to the expiration of the six (6)-month period measured from
the Effective Date of this Addendum indicated below, and no Option
Shares shall be withheld in connection with any Tax Determination Date
which occurs before the expiration of such six (6)-month period.
(ii) The stock withholding election must be made in
accordance with the following limitations:
(A) Such election must be made at least six
(6) months before the Tax Determination Date, or
(B) Both the exercise of such election and the
exercise of the option must occur concurrently within a quarterly
"window" period. Quarterly window periods shall begin on the third
(3rd) business day following the date of public release of each
quarterly or annual statement of the Corporation's sales and earnings
and end on the earlier of the twelfth (12th) business day following
such release date or the Tax Determination Date.
2. Stock Delivery. Optionee is hereby granted the election to
deliver, at the time the option is exercised, one or more shares of Common Stock
previously acquired by Optionee (other than in connection with the acquisition
triggering the Taxes) with an aggregate Fair Market Value not to exceed one
hundred percent (100%) of the Taxes.
Any such exercise of the election must be effected in
accordance with the following terms and conditions:
(i) The election must be made on or before the Tax
Determination Date for the Taxes.
(ii) The election shall be irrevocable.
(iii) The election shall be subject to the approval
of the Plan Administrator, and none of the delivered shares of Common
Stock shall be accepted in satisfaction of the Taxes, except to the
extent the election is approved by the Plan Administrator.
(iv) The shares of Common Stock delivered in
satisfaction of the Taxes shall be valued at Fair Market Value on the
Tax Determination Date.
2.
(v) In no event may the number of delivered shares
exceed in Fair Market Value the dollar amount of the Taxes.
IN WITNESS WHEREOF, Atlantic Pharmaceuticals, Inc. has caused
this Addendum to be executed by its duly-authorized officer, and Optionee has
executed this Addendum, all as of the Effective Date specified below.
ATLANTIC PHARMACEUTICALS, INC.
By: __________________________________
Title: __________________________________
_________________________________________
OPTIONEE
EFFECTIVE DATE:________________, 199__
3.
