NONQUALIFIED STOCK OPTION AGREEMENT
Exhibit 10.11
CIBUS CORP.
This NONQUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made as of _____________ __, 20__, by and between Cibus Corp., a Delaware corporation (the “Company”), and _________________ (the “Optionee”).
1. Certain Definitions.
Capitalized terms used, but not otherwise defined, in this Agreement will have the meanings given to such terms in the Company’s 2019 Equity and Incentive Compensation Plan (the “Plan”).
2. Grant of Option.
Subject to and upon the terms, conditions and restrictions set forth in this Agreement and in the Plan, pursuant to authorization under a resolution of the Committee that was duly adopted on _____________ __, 20__, the Company has granted to the
Optionee as of _____________ __, 20__ (the “Date of Grant”) an Option Right to purchase _____________ shares of Common Stock
(the “Option”) at an Option Price of $_____ per share of Common Stock, which represents at least the Market Value per Share
on the Date of Grant (the “Option Exercise Price”).
3. Vesting of Option.
(a) The Option (unless terminated as hereinafter provided) shall become exercisable on the earlier of (i)
the first anniversary of the Date of Grant and (ii) the next annual meeting of the Company’s stockholders that occurs in 20__ closest to the first anniversary of the Date of Grant (the “Vesting Date”), provided that the Optionee shall have been in the continuous service as a member of the Board (“Director”) through such date (the period from the Date of Grant until the Vesting Date, the “Vesting Period”).
(b) Notwithstanding Section 3(a) above, the unvested portion of the Option (to the extent the Option has not been forfeited) shall become immediately exercisable in full if the Optionee’s service as a Director is terminated due to
the Optionee’s death or Disability during the Vesting Period.
(c) Notwithstanding Section 3(a) above, if the Optionee’s service as a Director involuntarily ceases without Cause (as defined in Section
8(a)) prior to the end of the Vesting Period, unless otherwise provided in Section 5(c), a pro-rata portion of the Option
(to the extent the Option has not been forfeited) shall become exercisable in an amount equal to the product of the total number of shares of Common Stock subject to the Option as evidenced by this Agreement, multiplied by a fraction, the numerator
of which is the number of full months from the Date of Grant until the date on which the Optionee’s service as a Director is terminated without Cause and the denominator of which is 12.
(d) Notwithstanding Section 3(a) above, in the event of a Change in Control, the Option shall vest and become exercisable in accordance with Section 5 below.
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4. Termination of the
Option. The Option shall terminate on the earliest of the following dates:
(a) 30 days after the Optionee’s service as a Director is terminated, unless such termination is a result
of (i) the Optionee’s death or Disability as described in Section 4(b) or 4(c), (ii) a termination without Cause not occurring after a Change in Control as described in Section
4(d), (iii) a termination without Cause that occurs after a Change in Control as described in Section 4(e), or (iv) a
termination for Cause as described in Section 4(f).
(b) One year after the Optionee’s death if such death occurs while the Optionee is a Director;
(c) One year after the Optionee’s service as a Director is terminated due to Disability;
(d) Ninety days after the Optionee’s service as a Director is terminated by the Company without Cause that
does not occur after a Change in Control;
(e) One year after the Optionee’s service as a Director is terminated by the Company without Cause
occurring after a Change in Control;
(f) The date the Optionee’s service as a Director is terminated by the Company for Cause; or
(g) Seven years from the Date of Grant.
5. Effect of Change in
Control.
(a) Notwithstanding Section 3(a) above, if at any time before the Option is fully vested or forfeited, and while the Optionee is a Director, a Change in Control occurs, then the unvested portion of the Option shall become
immediately exercisable, except to the extent that a Replacement Award is provided to the Optionee in accordance with Section 5(b) to
continue, replace or assume the Option covered by this Agreement (the “Replaced Award”).
(b) For purposes of this Agreement, a “Replacement Award” means an award (i) of the same type (e.g., time-based stock options) as the Replaced Award, (ii) that has a value at least equal to the value of the Replaced Award,
(iii) that relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control, (iv) if the Optionee holding
the Replaced Award is subject to U.S. federal income tax under the Code, the tax consequences of which to such Optionee under the Code are not less favorable to such Optionee than the tax consequences of the Replaced Award, and (v) the other terms
and conditions of which are not less favorable to the Optionee holding the Replaced Award than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement
Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may
take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether the conditions of this Section 5(b) are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.
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(c) If, after receiving a Replacement Award, the Optionee’s service as a Director is terminated with the
Company (or any of its successors) (the “Successor”) by reason of a termination by the Successor without Cause prior to the
first anniversary of the Date of Grant, the Replacement Award shall become fully exercisable with respect to the stock option covered by such Replacement Award upon such termination.
6. Exercise and Payment
of Option. To the extent exercisable, the Option may be exercised in whole or in part from time to time and will be settled in shares of Common Stock by the Optionee giving notice to the Company specifying the number of shares of
Common Stock for which the Option is to be exercised and paying the aggregate Option Exercise Price for such shares of Common Stock. The Option Exercise Price shall be payable (a) in cash or by check acceptable to the Company or by wire transfer
of immediately available funds, (b) by the actual or constructive transfer to the Company by the Optionee of nonforfeitable, unrestricted shares of Common Stock of the Company owned by the Optionee and having an aggregate fair market value at the
time of exercise of the Option equal to the total Option Price of the shares of Common Stock which are the subject of such exercise, (c) by a net exercise method as described in the Plan, (d) by a combination of such methods of payment, or (e) by
such other methods as may be approved by the Committee.
7. Transferability;
Binding Effect. Subject to Section 15 of the Plan, the Option is not transferable by the Optionee otherwise than by will or the laws of descent and distribution, and in no event shall this award be transferred for value.
8. Definitions.
(a) “Cause” shall mean (i) a material breach by the Optionee of any agreement (other than restrictive covenant agreement) then in effect between the Optionee and the Company; (ii) a breach by the Optionee of any restrictive
covenant agreement then in effect between the Optionee and the Company; (iii) the Optionee’s conviction of or plea of “guilty” or “no contest” to a felony under the laws of the United States or any state thereof or any equivalent conviction or plea
under non-U.S. law; (iv) any material violation or breach by the Optionee of the Company’s Code of Business Conduct and Ethics, as in effect from time to time, as determined by the Board; (v) the Optionee’s commission of a crime involving
dishonesty, breach of trust, or physical harm to any person; or (vi) the Optionee’s willful and continued failure to substantially perform the duties associated with the Optionee’s position (other than any such failure resulting from the Optionee’s
incapacity due to physical or mental illness), which failure has not been cured within 30 days after a written demand for substantial performance is delivered to the Optionee by the Board or an executive officer of the Company, as appropriate for
the Optionee’s position, which demand specifically identifies the manner in which the Board or such officer, as applicable, believes that the Optionee has not substantially performed his duties.
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(b) “Disability” shall mean that the Optionee, because of accident, disability, or physical or mental illness, is incapable of performing Optionee’s duties as a Director. Notwithstanding the foregoing, the Optionee will be
deemed to have become incapable of performing the Optionee’s duties as a Director, if the Optionee is incapable of so doing for (i) a continuous period of 120 days and remains so incapable at the end of such 120 day period or (ii) periods amounting
in the aggregate to 180 days within any one period of 365 days and remains so incapable at the end of such aggregate period of 180 days.
9. No Dividend
Equivalents. The Optionee shall not be entitled to dividend equivalents with respect to the Option or the shares of Common Stock underlying the Option.
10. Detrimental Activity
and Recapture.
a) In the event that, as determined by the Committee, the Optionee shall engage in Detrimental Activity
while serving as a Director, the Option covered by this Agreement will be forfeited automatically and without further notice at the time of that determination notwithstanding any other provision of this Agreement. For purposes of this Agreement, “Detrimental Activity” means any conduct or act determined to be injurious, detrimental or prejudicial to any significant interest
of the Company or any Subsidiary unless the Optionee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company.
(b) If a Restatement occurs and the Committee determines that the Optionee is personally responsible for
causing the Restatement as a result of the Optionee’s personal misconduct or any fraudulent activity on the part of the Optionee, then the Committee has discretion to, based on applicable facts and circumstances and subject to applicable law, cause
the Company to recover all or any portion (but no more than 100%) of the Option (and the shares of Common Stock underlying the Option) awarded to the Optionee for some or all of the years covered by the Restatement. The amount of the Option (and
the shares of Common Stock underlying the Option) recovered by the Company shall be limited to the amount by which such Option (and the shares of Common Stock underlying the Option) exceeded the amount that would have been awarded to the Optionee
had the Company’s financial statements for the applicable restated fiscal year or years been initially filed as restated, as reasonably determined by the Committee. The Committee shall also determine whether the Company shall effect any recovery
under this Section 10(b) by: (i) seeking repayment from the Optionee; (ii) reducing, except with respect to any non-qualified deferred compensation under
Section 409A of the Code, the amount that would otherwise be payable to the Optionee under any compensatory plan, program or arrangement maintained by the Company (subject to applicable law and the terms and conditions of such plan, program or
arrangement); (iii) by withholding, except with respect to any non-qualified deferred compensation under Section 409A of the Code, payment of future increases in compensation (including the payment of any discretionary bonus amount) that would
otherwise have been made to the Optionee in accordance with the Company’s compensation practices; or (iv) by any combination of these alternatives. For purposes of this Agreement, “Restatement” means a restatement of any part of the Company’s financial statements for any fiscal year or years after the year in which the Date of Grant occurs due to material
noncompliance with any financial reporting requirement under the U.S. securities laws applicable to such fiscal year or years.
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11. Adjustments.
The number of shares of Common Stock issuable subject to the Option and the other terms and conditions of the grant evidenced by this Agreement are subject to adjustment as provided in Section 11 of the Plan.
12. Compliance with Law.
The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue any shares of Common Stock pursuant to this Agreement if the
issuance thereof would result in a violation of any such law. The Option shall not be exercisable if such exercise would involve a violation of any law.
13. Amendments.
Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that no amendment shall materially adversely affect the Optionee’s rights with respect to the options without the Optionee’s consent and the Optionee’s
consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 10D of the Exchange Act.
14. Severability.
In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the
remaining provisions hereof shall continue to be valid and fully enforceable.
15. Relation to Plan.
The Option granted under this Agreement and all of the terms and conditions hereof are subject to all of the terms and conditions of the Plan. In the event of any inconsistency between this Agreement and the Plan, the terms of the Plan will
govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determine any questions which arise in connection with this Agreement.
Notwithstanding anything in this Agreement to the contrary, (a) the Optionee acknowledges and agrees that this Agreement and the award described herein are subject to the terms and conditions of the Company’s compensation clawback policy in effect
as of the Date of Grant and from time to time thereafter, including any amendments thereto specifically to implement Section 10D of the Exchange Act and any applicable rules or regulations promulgated thereunder (including applicable rules and
regulations of any national securities exchange on which the shares of Common Stock may be traded) and (b) nothing in this Agreement prevents the Optionee from providing, without prior notice to the Company, information to governmental authorities
regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purposes of clarity the Optionee is not prohibited from
providing information voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act.
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16. Electronic Delivery.
The Company may, in its sole discretion, deliver any documents related to the Option and the Optionee’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Optionee’s consent to
participate in the Plan by electronic means. The Optionee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by
the Company or another third party designated by the Company.
17. Governing Law.
This Agreement shall be governed by and construed with the internal substantive laws of the State of Delaware, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.
18. Successors and
Assigns. Without limiting Section 7 hereof, the provisions of this Agreement shall inure to the benefit of, and be
binding upon, the successors, administrators, heirs, legal representatives and assigns of the Optionee, and the successors and assigns of the Company.
19. Acknowledgement.
The Optionee acknowledges that the Optionee (a) has received a copy of the Plan, (b) has had an opportunity to review the terms of this Agreement and the Plan, (c) understands the terms and conditions of this Agreement and the Plan, and (d) agrees
to such terms and conditions.
20. Counterparts.
This Agreement may be executed in one or more counterparts, all of which together shall constitute but one Agreement.
[SIGNATURES ON FOLLOWING PAGE]
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CIBUS CORP.
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Optionee Acknowledgment and Acceptance
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