EXHIBIT 4.1
THIS OPTION HAS BEEN ISSUED PURSUANT TO EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND THE
QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS (THE "LAWS"). IT
IS UNLAWFUL TO EXERCISE, SELL, PLEDGE OR OTHERWISE DISPOSE OF THIS OPTION, OR
ANY INTEREST THEREIN, OR RECEIVE ANY CONSIDERATION THEREFOR, IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND QUALIFICATION UNDER THE
LAWS, UNLESS EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION REQUIREMENTS
ARE AVAILABLE.
THIS OPTION MAY BE EXERCISED ONLY IN ACCORDANCE WITH THE TERMS OF THIS STOCK
OPTION AGREEMENT. ----
THE RICEX COMPANY
BOARD MEMBER - NONSTATUTORY STOCK OPTION AGREEMENT
--------------------------------------------------
The RiceX Company, a Delaware corporation (the "Company"), hereby
grants to XXXXX X. XXXXXXXXXX (the "Optionee"), an option (the "Option") to
purchase a total of 50,000 shares of common stock, par value $.001, of the
Company (the "Common Stock") at an exercise price (the "Exercise Price") equal
to $0.25 per share, which is equal to the fair market value of the Company's
Common Stock on the date of the grant, in all respects subject to the terms,
definitions and provisions of this Nonstatutory Stock Option Agreement (the
"Agreement").
1. NATURE OF THE OPTION. The Option is intended to be a
nonstatutory option and not an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. PAYMENT OF EXERCISE PRICE.
(a) METHOD OF PAYMENT. Payment of the Exercise Price for
shares purchased upon exercise of the Option shall be made (i) by delivery to
the Company of cash or a check to the order of the Company in an amount equal to
the purchase price of such shares; (ii) subject to the consent of the Company,
by delivery to the Company of shares of Common Stock of the Company then owned
by the Optionee having a fair market value equal in amount to the purchase price
of such shares in accordance with Section 2(b); or, (iii) by any other means
approved by the Board of Directors and which is consistent with applicable laws
and regulations (including, without limitation, the provisions of Rule 16b-3
under the Securities Exchange Act of 1934 and Regulation T promulgated by the
Federal Reserve Board); or (iv) by any combination of such methods of payment.
(b) METHOD OF PAYMENT - PUBLIC MARKET. In the event there
exists a public market for the Company's Common Stock on the date of exercise,
payment of the exercise price may be made by surrender of shares of the
Company's Common Stock. In this case payment shall be made as follows:
(i) Optionee shall deliver to the Secretary of the
Company a written notice which shall set forth the portion of the purchase price
the Optionee wishes to pay with Common Stock, and the number of shares of such
Common Stock the Optionee intends to surrender pursuant to the exercise of this
Option, which shall be determined by dividing the aforementioned portion of the
purchase price by the average of the last reported bid and asked prices per
share of Common Stock of the Company, as reported in The Wall Street Journal
(or, if not so reported, as otherwise reported by the National Association of
Securities Dealers Automated Quotation (NASDAQ) System or, in the event the
Common Stock is listed on a national securities exchange, or on the NASDAQ
Small-Cap Market of any successor national market system, the closing price of
Common Stock of the Company on such exchange as reported in The Wall Street
Journal) for the day on which the notice of exercise is sent or delivered;
(ii) Fractional shares shall be disregarded and the
Optionee shall pay in cash an amount equal to such fraction multiplied by the
price determined under subparagraph (i);
(iii)The written notice shall be accompanied by a duly
endorsed blank stock power with respect to the number of Shares set forth in the
notice, and the certificate(s) representing said Shares shall be delivered to
the Company at its principal offices within three (3) working days from the date
of the notice of exercise;
(iv) The Optionee hereby authorizes and directs the
Secretary of the Company to transfer so many of the Shares represented by such
certificate(s) as are necessary to pay the purchase price in accordance with the
provisions herein;
(v) If any such transfer of Shares requires the consent
of the California Commissioner of Corporations or of some other agency under the
securities laws of any other state, or an opinion of counsel for the Company or
Optionee that such transfer may be effected under applicable federal and state
securities laws, the time periods specified herein shall be extended for such
periods as the necessary request for consent to transfer is pending before said
commissioner or other agency, or until counsel renders such an opinion, as the
case may be. All parties agree to cooperate in making such request for transfer,
or in obtaining such opinion of counsel, and no transfer shall be effected
without such consent or opinion if required by law; and
(vi) Notwithstanding any other provisions herein, the
Optionee shall only be permitted to pay the purchase price with shares of the
Company's Common Stock owned by him as of the exercise date in the manner and
within the time periods allowed under Rule 16b-3 promulgated under the
Securities Exchange Act of 1934 as such regulation is presently constituted, as
it is amended from time to time, and as it is interpreted now or hereafter
by the Securities and Exchange Commission and any such shares have been held by
the Optionee for not less than six (6) months.
3. EXERCISE OF OPTION. The Option shall vest and become
exercisable during its term, subject to the provisions of Section 5 below, as
follows:
(a) VESTING AND RIGHT TO EXERCISE.
(i) The Option hereby granted shall vest and become
exercisable on a prorated basis over a twelve-month period beginning June 28,
2004. The option will be fully vested on June 27, 2005.
Subject to the provisions of subparagraph (ii) and (iii) below, the
Optionee can exercise any portion of the Option, which has vested until the
expiration of the Option term.
If a "change of control" of the Company should occur, as defined below,
then the Option shall immediately vest and become exercisable in full. For
purposes of the foregoing provision, a "change in control" means the occurrence
of any of the following:
(A) any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as emended (the
"Exchange Act") (other than the Company or its existing shareholders) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company (or a successor to
the Company) representing 50% or more of the combined voting power of the then
outstanding securities of the Company or such successor;
(B) the dissolution of the Company or liquidation
of more than 50% or more in value of the assets of the Company, (ii) or any
merger or reorganization of the Company whether or not another entity is the
survivor, (iii) a transaction (other than the initial public offering of the
Company's shares) pursuant to which holders, as a group, of all of the shares of
the Company outstanding before the transaction, hold, as a group, less than 50%
of the combined voting power of the Company or any successor company outstanding
after the transaction, or (iv) any other event or series of events which the
Optionee determines, in his discretion, would materially alter the structure of
the Company or its ownership.
(ii) In the event of the Optionee's death, disability,
other termination of employment or ceases to be a member of the Board prior to
exercise, the exercisability of the Option shall be governed by Section 5 below.
(iii)The Option may be exercised in whole or in part but
may not be exercised as to fractional shares.
(b) METHOD OF EXERCISE. In order to exercise any portion of
the Option, the Optionee shall execute and deliver to the Chief Financial
Officer of the Company the Notice of Exercise of Stock Option in the form
attached hereto as Exhibit "A," together with the Consent of Spouse. The Notice
of Exercise must be accompanied by payment in full of the
aggregate purchase price for the Shares to be purchased in the type of
consideration set forth in Section 2. The Notice of Exercise may be delivered to
the Company at any time. The certificate(s) for the Shares as to which the
Option has been exercised shall be registered in the name of Optionee or his
designee.
(c) RESTRICTIONS ON EXERCISE. This Option may not be
exercised if the issuance of the shares upon such exercise or the method of
payment of consideration for such shares would constitute a violation of any
applicable federal or state securities law or any other law or regulation. As a
condition to the exercise of the Option, the Company may require the Optionee to
make any representation or warranty to the Company at the time of exercise of
the Option as in the opinion of legal counsel for the Company may be required by
any applicable law or regulation, including the execution and delivery of an
appropriate representation statement. The stock certificate(s) for the Shares
issued upon exercise of the Option may bear appropriate legends restricting
transfer.
(d) DELIVERY OF CERTIFICATES. The Company shall deliver the
certificate(s) for the Shares issued upon exercise of the Option to the Optionee
as soon as is practicable; provided, however, that if any law or regulation
requires the Company to take action with respect to such shares before the
issuance thereof, including, without limitation, actions taken pursuant to
Section 6 below, then the date of delivery of such Shares shall be extended for
a period necessary to take such action.
4. NON-TRANSFERABILITY OF OPTION. This Option may be exercised
during the lifetime of the Optionee only by the Optionee and may not be
transferred in any manner other than by will or by the laws of descent and
distribution. The terms of this Option shall be binding upon the executors,
administrators, heirs and successors of the Optionee.
5. TERM OF THE OPTION. Except as otherwise provided in this
Agreement, to the extent not previously exercised, the right to exercise the
Option shall terminate on the tenth (10th) anniversary of the date of grant.
Notwithstanding the foregoing, if an Optionee ceases to be a Board Member of the
Company for any reason, except death and disability, he or she may, but only
within ninety (90) days after the date he or she ceases to be a Board Member of
the Company, exercise his or her Option to the extent that he or she was
entitled to exercise it at the date of such termination, and in the case of the
Optionee's death or disability, the Optionee (or the Administrator or Executor
or other Representative of the Optionee's estate) may, but only within one (1)
year after the date he or she ceases to be a Board Member of the Company due to
death or disability, exercise his or her Option to the extent that he or she was
entitled to exercise it at the date of such termination; provided, however that
in no event may the Option be exercised after the ten (10) year term has
expired. To the extent that the Optionee was not entitled to exercise an Option
at the date of such termination, or if he or she does not exercise such Option
(which he or she was entitled to exercise) within the time specified herein, the
Option shall terminate.
6. ADJUSTMENTS UPON /CHANGES IN CAPITALIZATION; OTHER
ADJUSTMENTS. Subject to any required action by the shareholders of the Company,
the number of Shares and the Exercise Price shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, combination,
reclassification, the payment of a stock dividend on the Common Stock or any
other increase or decrease in the number of shares of Common Stock of the
Company 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 issue
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 of shares subject to, or the Exercise
Price of, this Option.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the number of shares, as well as
the Exercise Price, in the event that the Company effects one or more
reorganizations, recapitalizations, rights offerings, or other increases or
reductions of shares of its outstanding common stock, and in the event of the
Company being consolidated with or merged into any other corporation; provided,
however, that in no event shall the Optionee be adversely affected by such
adjustment.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for changing, modifying, amending or adjusting
any of the terms of this Option solely in order for the Company to perfect a
significant financing; provided, however, that in no event shall the Optionee be
adversely affected by such adjustment.
7. RIGHTS OF SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the shares until the date of the issuance or the
transfer to the Optionee of the certificate(s) for such shares and only after
the Exercise Price for such shares has been paid in full.
8. AMENDMENT. Except as set forth in Section 6, this Agreement
may not be amended without the written consent of the Optionee.
9. INCOME TAX WITHHOLDING. The Optionee authorizes the Company
to withhold, in accordance with applicable law from any compensation payable to
him or her, any taxes required to be withheld by federal, state or local laws as
a result of the exercise of this Option. Furthermore, in the event of any
determination that the Company has failed to withhold a sum sufficient to pay
all withholding taxes due in connection with the exercise of this Option, the
Optionee agrees to pay the Company the amount of such deficiency in cash within
five (5) days after receiving a written demand from the Company to do so,
whether or not Optionee is an employee or director of the Company at that time.
10. INVESTMENT REPRESENTATIONS; LEGENDS.
(a) REPRESENTATIONS. The Optionee represents, warrants and
covenants that:
(i) Any shares purchased upon exercise of this Option
shall be acquired for the Optionee's account for investment only, and not with a
view to, or for sale in connection with, any distribution of the shares in
violation of the Securities Act of 1933 (the "Securities Act"), or any rule or
regulation under the Securities Act.
(ii) The Optionee has had such opportunity as he or she
has deemed adequate to obtain from representatives of the Company such
information as is necessary to permit the Optionee to evaluate the merits and
risks of his or her investment in the Company.
(iii)The Optionee is able to bear the economic risk of
the holding of such shares acquired pursuant to the exercise of this Option for
an indefinite period.
(iv) The Optionee understands that the Shares acquired
pursuant to the exercise of this Option are not registered under the Securities
Act and are "restricted securities" within the meaning of Rule 144 under the
Securities Act and may not be transferred, sold or otherwise disposed of in the
absence of an effective registration statement with respect to the Shares filed
and made effective under the Securities Act of 1933, or an opinion of counsel
satisfactory to the Company to the effect that registration under such Act is
not required.
By making payment upon exercise of this Option, the Optionee shall be deemed to
have reaffirmed, as of the date of such payment, the representations made in
this Section 10.
(b) Legends of Stock Certificate. All stock certificates
representing share of Common Stock issued to the Optionee upon exercise of this
Option shall have affixed thereto legend(s) substantially in the following
forms, in addition to any other legends required by applicable state law:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT WITH RESPECT TO THE SHARES EVIDENCED BY THIS
CERTIFICATE, FILED AND MADE EFFECTIVE UNDER THE SECURITIES ACT OF 1933,
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
REGISTRATION UNDER SUCH ACT IS NOT REQUIRED."
DATE OF GRANT: June 28, 2004
The RiceX Company
By: _______________________________________
Xxxxxxxx Xxxxxx, Chief Executive Officer
By: _______________________________________
Xxxx X. Xxxx, Chief Financial Officer
The Optionee acknowledges receipt of a copy of the Plan, and represents
that he or she is familiar with the terms and provisions thereof, and hereby
accepts this Option subject to all of the terms and provisions thereof. The
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board of Directors of The RiceX Company upon any
questions arising under such Agreement.
Dated: ________________________
________________________________________
XXXXX X. XXXXXXXXXX
("Optionee")
CONSENT OF SPOUSE
I, ________________________, spouse of the Optionee who executed the
foregoing Agreement attached hereto, hereby agree that my spouse's interest in
the shares of Common Stock of The RiceX Company subject to said Agreement shall
be irrevocably bound by the Agreement's terms. I agree to accept as binding,
conclusive and final all decisions or interpretations of the Board of Directors
of The RiceX Company upon any questions arising under such Agreement. I further
agree that my community property interest in such Shares, if any, shall
similarly be bound by said Agreement and that such consent is binding upon my
executors, administrators, heirs and assigns. I agree to execute and deliver
such documents as may be necessary to carry out the intent of said Agreement and
this consent.
Dated: ________________________
________________________________________
Signature
________________________________________
Print Name
EXHIBIT A
TO: The RiceX Company
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xx Xxxxxx Xxxxx, XX 00000
SUBJECT: NOTICE OF EXERCISE OF STOCK OPTIONS
With respect to the stock option granted to the undersigned by The RiceX
Company, (the "Company") on (grant date) _______________________, to purchase an
aggregate of ________________________ shares of the Company's Common Stock, this
is official notice that the undersigned hereby elects to exercise such option to
purchase shares as follows:
Number of Shares ________________________
Date of Purchase: ________________________
Mode of Payment: ________________________ (certified check or cash)
The shares should be issued as follows:
Name: _____________________________________________
Address: _____________________________________________
_____________________________________________
Signed by (print name): _____________________________________________
Signature: _____________________________________________
Dated: _____________________________________________
Please send this notice of exercise to:
The RiceX Company
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xx Xxxxxx Xxxxx, XX 00000
Phone: 000-000-0000
