STOCK OPTION AGREEMENT
Pursuant to the Grant Notice and this Stock Option Agreement, the Company
has granted you an option to purchase the number of shares of the Company's
common stock ("Common Stock") indicated in the Grant Notice at the exercise
price indicated in the Grant Notice.
Your option is granted in connection with and in furtherance of the
Company's compensatory benefit plan for the Company's employees (including
officers), directors or consultants, and is intended to comply with the
provisions of (i) Rule 701 promulgated by the Securities and Exchange Commission
under the Securities Act of 1933, as amended (the "Securities Act") and (ii)
Section 25102(o) of the California Corporations Code. Defined terms not
explicitly defined in this Stock Option Agreement but defined in the Plan shall
have the same definitions as in the Plan.
The details of your option are as follows:
1. Vesting. Subject to the limitations contained herein, your option will
vest as provided in the Grant Notice, provided that vesting will cease upon the
termination of your Continuous Status as an Employee, Director or Consultant.
2. Number of Shares and Exercise Price. The number of shares of Common
Stock subject to your option and your exercise price per share referenced in
your Grant Notice may be adjusted from time to time for Capitalization
Adjustments, as provided in the Plan.
3. Exercise prior to Vesting ("Early Exercise"). If permitted in your
Grant Notice (i.e., the "Exercise Schedule" indicates that "Early Exercise" of
your option is permitted) and subject to the provisions of your option, you may
elect at any time that is both (i) during the period of your Continuous Service
and (ii) during the term of your option, to exercise all or part of your option,
including the nonvested portion of your option; provided, however, that:
(a) a partial exercise of your option shall be deemed to cover first
vested shares of Common Stock and then the earliest vesting installment of
unvested shares of Common Stock;
(b) any shares of Common Stock so purchased from installments that
have not vested as of the date of exercise shall be subject to the purchase
option in favor of the Company as described in the Company's form of Early
Exercise Stock Purchase Agreement; and
(c) you shall enter into the Company's form of Early Exercise Stock
Purchase Agreement with a vesting schedule that will result in the same vesting
as if no early exercise had occurred.
4. ISO Exercise Limitation.
(a) The aggregate Fair Market Value of the shares of Common Stock
with respect to which you may exercise your option for the first time during any
calendar year, when added to the aggregate Fair Market Value of the shares of
Common Stock subject to any other
1.
options designated as Incentive Stock Options and granted to you under any stock
option plan of the Company or an Affiliate prior to the Date of Grant with
respect to which such options are exercisable for the first time during the same
calendar year, shall not exceed $100,000 (the "ISO Exercise Limitation") unless
applicable law requires that your option be exercisable sooner./1/
(b) Notwithstanding the provisions of paragraph 4(a), if the ISO
Exercise Limitation would prevent you from exercising your option as to vested
shares, then the ISO Exercise Limitation shall terminate as to such vested
shares as such shares vest, and you may exercise your option as to such vested
shares. Upon such termination of the ISO Exercise Limitation, your option shall
be deemed a Nonstatutory Stock Option to the extent of the number of vested
shares of Common Stock subject to your option that would otherwise exceed the
ISO Exercise Limitation.
(c) The ISO Exercise Limitation shall terminate, and you may fully
exercise your option, as to all shares of Common Stock subject to your option
for which your option would have been exercisable in the absence of the ISO
Exercise Limitation upon the earlier of the following events:
(i) the date of termination of your Continuous Service,
(ii) the day immediately prior to the effective date of a Change
in Control (as defined in the Plan) in which your option is not assumed or
substituted for as provided in the Plan, or
(iii) the day that is ten (10) days prior to the Expiration Date
of your option.
Upon such termination of the ISO Exercise Limitation, your option shall be
deemed a Nonstatutory Stock Option to the extent of the number of shares of
Common Stock subject to your option that would otherwise then exceed the ISO
Exercise Limitation.
5. Method Of Payment.
(a) Payment Options. Payment of the exercise price by cash or check
is due in full upon exercise of all or any part of your option, provided that
you may elect, to the extent permitted by applicable law and the Grant Notice,
to make payment of the exercise price under one of the following alternatives:
(i) Pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which, prior to the issuance of Common
Stock, results in either the receipt of cash (or check) by the Company or the
receipt of irrevocable instructions to pay the aggregate exercise price to the
Company from the sales proceeds;
____________________
/1/ For purposes of this provision, your options designated as Incentive Stock
Options shall be taken into account in the order in which they were granted to
you, and the Fair Market Value of shares of Common Stock shall be determined as
of the time the option with respect to such shares of Common Stock is granted.
If Section 422 of the Code is amended to provide for a different limitation from
that set forth in this provision, the ISO Exercise Limitation shall be deemed
amended effective as of the date required or permitted by such amendment to the
Code.
2.
(ii) Provided that at the time of exercise the Company's Common
Stock is publicly traded and quoted regularly in the Wall Street Journal, by
delivery of already-owned shares of Common Stock, held for the period required
to avoid a charge to the Company's reported earnings, and owned free and clear
of any liens, claims, encumbrances or security interests, which Common Stock
shall be valued at its fair market value on the date of exercise; or
(iii) By a combination of the above methods.
6. Whole Shares. Your option may only be exercised for whole shares.
7. Securities Law Compliance. Notwithstanding anything to the contrary
contained herein, your option may not be exercised unless the shares issuable
upon exercise of your option are then registered under the Securities Act or, if
such shares are not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the
Securities Act.
8. Term. The term of your option commences on the Date of Grant and
expires upon the earliest of:
(i) the Expiration Date indicated in the Grant Notice;
(ii) the tenth (10th) anniversary of the Date of Grant;
(iii) twelve (12) months after either (x) your death or (y) the
termination of your Continuous Status as Employee, Director or Consultant as a
result of disability;
(iv) termination of your Continuous Status as Employee, Director or
Consultant for cause; or
(v) three (3) months after the termination of your Continuous Status
as an Employee, Director or Consultant for any other reason, provided that if
during any part of such three (3)-month period the option is not exercisable
solely because of the condition set forth in paragraph 7 (Securities Law
Compliance), in which event the option shall not expire until the earlier of the
Expiration Date or until it shall have been exercisable for an aggregate period
of three (3) months after the termination of Continuous Status as an Employee,
Director or Consultant.
To obtain the federal income tax advantages associated with an
"incentive stock option," the Code requires that at all times beginning on the
grant date of the option and ending on the day three (3) months before the date
of the option's exercise, you must be an employee of the Company, except in the
event of your death or permanent and total disability. The Company cannot
guarantee that your option will be treated as an "incentive stock option" if you
exercise your option more than three (3) months after the date your employment
with the Company terminates.
3.
9. Exercise.
(a) You may exercise the vested portion of your option during its
term by delivering a Notice of Exercise (in the form attached to your Grant
Notice) together with the exercise price to the Secretary of the Company, or to
such other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require.
(b) By exercising your option you agree that:
(i) as a condition to any exercise of your option, the Company
may require you to enter an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of
(1) the exercise of your option; (2) the lapse of any substantial risk of
forfeiture to which the shares are subject at the time of exercise; or (3) the
disposition of shares acquired upon such exercise;
(ii) prior to the effective date of the first registration
statement registering securities of the Company filed under the Act, as a
condition to any exercise of your option, you shall execute and deliver a voting
Agreement in the form attached to your Stock Option Grant Notice as it may be
modified by the Company;
(iii) you will notify the Company in writing within fifteen (15)
days after the date of any disposition of any of the shares of the Common Stock
issued upon exercise of an incentive stock option that occurs within two (2)
years after the Date of Grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option; and
(iv) the Company (or a representative of the underwriters) may,
in connection with the first underwritten registration of the offering of any
securities of the Company under the Act, require that you not sell or otherwise
transfer or dispose of any shares of Common Stock or other securities of the
Company during such period (not to exceed one hundred eighty (180) days)
following the effective date of the registration statement of the Company filed
under the Act as may be requested by the Company or the representative of the
underwriters. You further agree that the Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such period.
10. Transferability. Your option is not transferable, except by will or by
the laws of descent and distribution, and is exercisable during your life only
by you. Notwithstanding the foregoing, by delivering written notice to the
Company, in a form satisfactory to the Company, you may designate a third party
who, in the event of your death, shall thereafter be entitled to exercise your
option.
11. Right of First Refusal.
(a) Subject to subparagraphs 11(e) and 11(f) below, if you intend to
sell or transfer any Common Stock, you shall give written notice (the "Notice"),
delivered or mailed as provided in paragraph 13, to the Company stating that you
intend to make such a sale or transfer, identifying the party who made the offer
to purchase the Common Stock (the "Proposed Transferee"), specifying the number
of shares of Common Stock proposed to be purchased or
4.
acquired pursuant to the offer (the "First Refusal Shares"), specifying the per
share purchase price which the Proposed Transferee has offered to pay for the
First Refusal Shares (the "Sale Price"), and any other material facts relating
to the proposed sale or transfer, and certifying the bona fide nature of the
proposed sale or transfer.
(b) Upon receipt of the Notice, the Company shall have the
irrevocable and exclusive option to buy all (to the extent permitted by
applicable law) of the First Refusal Shares at the Sale Price (the "First
Refusal Right") on the same terms and conditions as offered by the Proposed
Transferee. Within thirty (30) calendar days of the Company's receipt of the
Notice, the Company shall deliver or mail, as provided in paragraph 13, to you a
written notice stating whether the Company elects to exercise its First Refusal
Right under this paragraph 11, and such notice shall constitute an irrevocable
commitment to purchase such First Refusal Shares. The Company shall complete the
purchase of the First Refusal Shares which it has agreed to purchase within
sixty (60) days of the Company's receipt of the Notice or such longer period of
time as has been offered by the Proposed Transferee, or as may be agreed to by
you and the Company for example, for purposes of satisfying the requirements of
Section 1202(c) of the Internal Revenue Code of 1986, as amended.
(c) If the Company elects to purchase the First Refusal Shares
hereunder, the sale of the First Refusal Shares to the Company shall be made at
the offices of the Company on the thirtieth (30th) day following the expiration
of the Company's 30-day period after the Notice is made (or if such thirtieth
(30th) day is not a business day, then on the next succeeding business day).
Such sale shall be effected by your delivery to the Company of a certificate or
certificates evidencing the First Refusal Shares to be purchased by it, duly
endorsed for transfer to the Company, which First Refusal Shares shall be
delivered free and clear of all liens, charges, claims and encumbrances of any
nature whatsoever, against payment to you of the purchase price therefor by the
Company. Payment for the First Refusal Shares shall be made as provided in the
Notice or by wire transfer or certified check, or by any other means acceptable
to you and the Company.
(d) If the First Refusal Shares are not purchased by the Company
pursuant to this paragraph 11, then you shall be free for a period of ninety
(90) calendar days from the date of the Company's receipt of the Notice to sell
the First Refusal Shares to the Proposed Transferee, at a price equal to or
greater than the Sale Price and on the other terms and conditions originally
offered by the Proposed Transferee. The Company shall be entitled to obtain such
evidence as it may reasonably request in order to confirm that any such sale to
the Proposed Transferee complies with this subparagraph 11(d).
(e) The First Refusal Right set forth in this paragraph 11 shall not
apply to any transfer to your executor, conservator, or personal representative
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in the event of your death, disability or incapacity. Any transfer under this
subparagraph 11(e), however, shall not cause to lapse or bar the Company's
enforcement of the Company's First Refusal Right. The Company may condition the
completion of any transfer under this subparagraph 11(e) on the transferee
executing such document or documents as the Company may require in its
discretion or on the advice of the Company's outside counsel to preserve the
Company's rights under this Stock Option Agreement.
5.
(f) This First Refusal Right shall terminate on the effective date of
the first registration statement registering securities of the Company filed
under the Act.
12. Option Not a Service Contract. Your option is not an employment
contract and nothing in your option shall be deemed to create in any way
whatsoever any obligation on your part to continue in the employ of the Company,
or of the Company to continue your employment with the Company. In addition,
nothing in your option shall obligate the Company, its shareholders, board of
directors, officers or employees to continue any relationship which you might
have as a Director or Consultant for the Company.
13. Notices. Any notices provided for in your option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in the
case of notices delivered by the Company to you, five (5) days after deposit in
the United States mail, postage prepaid, addressed to you at the last address
you provided to the Company.
14. Governing Plan Document. Your option is subject to all the provisions
of the Plan, the provisions of which are hereby made a part of your option,
including without limitation the provisions of the Plan relating to option
provisions, and is further subject to all interpretations, amendments, rules and
regulations which may from time to time be promulgated and adopted pursuant to
the Plan. In the event of any conflict between the provisions of your option and
those of the Plan, the provisions of the Plan shall control.
6.
EXHIBIT 10.5
Diversa Corporation
STOCK OPTION GRANT NOTICE
(1997 Equity Incentive Plan)
Diversa Corporation (the "Company"), pursuant to its 1997 Equity Incentive Plan
(the "Plan"), hereby grants to Optionee an option to purchase the number of
shares of the Company's common stock set forth below. This option is subject to
all of the terms and conditions as set forth herein and in Attachments I, II and
III, which are incorporated herein in their entirety.
Optionee: ______________________________________
Date of Grant: ______________________________________
Vesting Commencement Date: ______________________________________
Shares Subject to Option: ______________________________________
Exercise Price Per Share: ______________________________________
Expiration Date: ______________________________________
____ Incentive Stock Option ____ Nonstatutory Stock Option
Exercise/Vesting Schedule: [25%] vested [12] months from Vesting
Commencement Date; [1/16th of the total
shares subject to the Option vests on the
end of quarterly period thereafter].
Payment: Any or a combination of the following: (i) by cash or check, (ii)
pursuant to a Regulation T program, as provided in the Stock Option Agreement or
(iii) delivering shares of previously-owned common stock, as provided in the
Stock Option Agreement.
Additional Terms/Acknowledgments: The undersigned Optionee acknowledges receipt
of, and understands and agrees to, this Grant Notice, the Stock Option Agreement
and the Plan. Optionee further acknowledges that as of the Date of Grant, this
Grant Notice, the Stock Option Agreement, the Voting Agreement and the Plan set
forth the entire understanding between Optionee and the Company regarding the
acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted
and delivered to Optionee under the Plan, and (ii) the following agreements
only:
Other Agreements: [None.]
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____________________________________________
____________________________________________
Diversa Corporation Optionee:
By:_______________________________ ________________________________________
Signature
Title:____________________________
Date:_____________________________ Date:___________________________________
Attachment I: Stock Option Agreement
Attachment II: 1997 Equity Incentive Plan
Attachment III: Notice of Exercise
Attachment IV: Voting Agreement
1.
Diversa Corporation Diversa Corporation
Stock Option Grant Notice ID: 00-0000000
1997 Equity Incentive Plan 00000 Xxxxxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000-0000
Option Number:
Plan:
ID:
Effective ________________, the Date of Grant, you have been granted an
Incentive Stock Option to buy ________________ shares of Diversa Corporation
(the Company) Common Stock at ________________ per share, subject to the
provisions of the Stock Option Agreement and the 1997 Equity Incentive Plan (the
Plan), which are attached hereto. The Stock Option will expire on the date
shown below.
The total Stock Option exercise price of the shares granted is ________________.
Exercise/Vesting Schedule: 25% of the shares covered by the Stock Option will
be vested on the Vest Date and 1/16 of the total shares subject to the Stock
Option will vest quarterly thereafter, and will be fully vested on the date as
shown in the table below.
Shares Vest Type Full Vest Expiration
________________ ________________ ________________ ________________
________________ ________________ ________________ ________________
Payment: Any one or a combination of the following: (i) by cash or check, (ii)
pursuant to a Regulation T program, as provided in the Stock Option Agreement or
(iii) delivering shares of previously-owned common stock, as provided in the
Stock Option Agreement.
By your signature and the Company's signature below, you and the Company agree
that this Stock Option is granted under and governed by the terms and conditions
of this Grant Notice and the Company's 1997 Equity Incentive Plan (Attachment I)
and the Stock Option Agreement (Attachment II), Notice of Exercise (Attachment
III), and the Voting Agreement (Attachment IV), all of which are incorporated
herein by reference. By your signature below you acknowledge receipt of all
such attachments. In addition, by your signature below you further acknowledge
that as of the Date of Grant, this Grant Notice, the Stock Option Agreement, the
Voting Agreement and the Plan set forth the entire and sole understanding
between you and the Company regarding the Stock Option set forth above and
supercedes all written or oral agreements relating thereto.
__________________________________ ____________________________________
Diversa Corporation Date
__________________________________ ____________________________________
Date
1.
