NUTRACEA DIRECTOR STOCK OPTION AGREEMENT (For Non-Employee Directors)
EXHIBIT
10.38.6
2005
EQUITY INCENTIVE PLAN
(For
Non-Employee Directors)
This
Director Stock Option Agreement (this “Agreement”)
is made
and entered into as of the date of grant set forth below (the “Date
of Grant”)
by and
between NutraCea, a California corporation (the “Company”),
and
the participant named below (“Participant”).
Capitalized terms not defined herein shall have the meaning ascribed to them
in
the Company’s 2005 Equity Incentive Plan, as amended (the “2005
Plan”).
Participant:
Social
Security Number:
Participant’s
Address:
Total
Option Shares:
Exercise
Price Per Share:
Date
of Grant:
Vesting
Start Date:
Expiration
Date:
1. Grant
of Option. The
Company hereby grants to Participant an option (this “Option”)
to
purchase up to the total number of shares of Common Stock of the Company set
forth above (collectively, the “Shares”)
at the
Exercise Price Per Share set forth above (the “Exercise
Price”),
subject to all of the terms and conditions of this Agreement and the 2005 Plan,
including without limitation Section 5.11 of the 2005 Plan. This Option is
granted pursuant to Section 5.11 of the 2005 Plan and is not intended to qualify
as an “incentive stock option” (“ISO”)
within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”).
Capitalized terms not defined in this Agreement will have the meanings given
to
them in the 2005 Plan.
2. Vesting;
Exercise Period.
2.1
Vesting
of Right to Exercise Option.
Subject to the terms and conditions of the 2005 Plan and this Grant, and so
long
as the Optionee continuously remains a member of the Board of Directors of
the
Company (a “Board
Member”),
this
Option shall vest and become exercisable as to one-twelfth (1/12)
of the
Shares monthly following the Date of Grant.
2.2 Expiration. This
Option shall expire on the Expiration Date set forth above and must be
exercised, if at all, on or before the earlier of the Expiration Date or the
date on which this Option is earlier terminated in accordance with the
provisions of Section 3.
3. Termination.
3.1 Termination. The
Option shall cease to vest if the Participant ceases to be a Board Member (the
“Termination
Date”).
If
Participant is terminated for any reason, then this Option, to the extent (and
only to the extent) that it would have been exercisable by Participant on the
Termination Date, may be exercised by Participant (or the Participant’s legal
representative) within ninety (90) days after the Termination Date, but in
no
event later than the Expiration Date.
3.2
No
Right to Remain a Director. Nothing
in the 2005 Plan or this Agreement shall confer on Participant any right to
remain a Board Member or limit in any way the right of the Company to terminate
Participant’s relationship with the Company at any time.
4. Manner
of Exercise.
4.1 Stock
Option Exercise Agreement. To
exercise this Option, Participant (or in the case of exercise after
Participant’s death, Participant’s executor, administrator, heir, legatee or
authorized assignee, as the case may be) must deliver to the Company an executed
stock option exercise agreement in such form as may be approved by the Company
from time to time (the “Exercise
Agreement”),
which
shall set forth, inter
alia, Participant’s
election to exercise this Option, the number of Shares being purchased, any
restrictions imposed on the Shares and any representations, warranties and
agreements regarding Participant’s investment intent and access to information
as may be required by the Company to comply with applicable securities laws.
If
someone other than Participant exercises this Option, then such person must
submit documentation reasonably acceptable to the Company that such person
has
the right to exercise this Option.
4.2 Limitations
on Exercise. This
Option may not be exercised unless such exercise is in compliance with all
applicable federal and state securities laws, as they are in effect on the
date
of exercise. This Option may not be exercised as to fewer than 100 Shares unless
it is exercised as to all Shares as to which this Option is then exercisable.
4.3 Payment. The
Exercise Agreement shall be accompanied by full payment of the Exercise Price
for the Shares being purchased in cash (by check), or, if the Company in its
discretion agrees in writing and where permitted by law:
(a)
by
cancellation of indebtedness of the Company to the Participant;
(b)
by
waiver of compensation due or accrued to Participant for services
rendered;
(c)
provided that a public market for the Company’s stock exists: (1) through a
“same day sale” commitment from Participant and an NASD Dealer whereby
Participant irrevocably elects to exercise this Option and to sell a portion
of
the Shares so purchased to pay for the Exercise Price and whereby the NASD
Dealer irrevocably commits upon receipt of such Shares to forward the exercise
price directly to the Company; or
(2)
through a “margin” commitment from the Participant and a NASD Dealer whereby the
Participant irrevocably elects to exercise this Option and to pledge the Shares
so purchased to the NASD Dealer in a margin account as security for a loan
from
the NASD Dealer in the amount of the exercise price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the exercise price
directly to the Company; or
(d)
by
any combination of the foregoing.
4.4 Tax
Withholding. Prior
to the issuance of the Shares upon exercise of this Option, Participant must
pay
or provide for any applicable federal or state withholding obligations of the
Company. If the Committee permits, Participant may provide for payment of
withholding taxes upon exercise of this Option by requesting that the Company
retain Shares with a Fair Market Value
equal to the minimum amount of taxes required to be withheld. In such case,
the
Company shall issue the net number of Shares to the Participant by deducting
the
Shares retained from the Shares issuable upon exercise.
4.5 Issuance
of Shares. Provided
that the Exercise Agreement and payment are in form and substance satisfactory
to counsel for the Company, the Company shall issue the Shares registered in
the
name of Participant, Participant’s authorized assignee, or Participant’s legal
representative, and shall deliver certificates representing the Shares with
the
appropriate legends affixed thereto.
5. Compliance
with Laws and Regulations. The
exercise of this Option and the issuance and transfer of Shares shall be subject
to compliance by the Company and Participant with all applicable requirements
of
federal and state securities laws and with all applicable requirements of any
stock exchange on which the Company’s Common Stock may be listed at the time of
such issuance or transfer. Participant understands that the Company is under
no
obligation to register or qualify the Shares with the Securities and Exchange
Commission, any state securities commission or any stock exchange to effect
such
compliance.
6. Non-transferability
of Option. This
Option may not be transferred or assigned in any manner other than by will
or by
the laws of descent and distribution and may be exercised during the lifetime
of
Participant only by Participant. The terms of this Option shall be binding
upon
the executors, administrators, successors and assigns of Participant.
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7. Tax
Consequences. Set
forth below is a brief summary as of the Date of Grant of some of the federal
tax consequences of exercise of this Option and disposition of the Shares.
THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION
OR DISPOSING OF THE SHARES.
7.1.
Exercise
of Nonqualified Stock Option. There
may be a regular federal income tax liability upon the exercise of this Option.
Participant will be treated as having received compensation income (taxable
at
ordinary income tax rates) equal to the excess, if any, of the fair market
value
of the Shares on the date of exercise over the Exercise Price. The Company
may
be required to withhold from Participant’s compensation or collect from
Participant and pay to the applicable taxing authorities an amount equal to
a
percentage of this compensation income at the time of exercise.
7.2.
Disposition
of Shares.
If the
Shares are held for more than twelve (12) months after the date of the transfer
of the Shares pursuant to the exercise of this Option, any gain realized on
disposition of the Shares will be treated as long-term capital
gain.
8. Privileges
of Stock Ownership. Participant
shall not have any of the rights of a stockholder with respect to any Shares
until Participant exercises this Option and pays the Exercise Price.
9. Interpretation. Any
dispute regarding the interpretation of this Agreement shall be submitted by
Participant or the Company to the Committee for review. The resolution of such
a
dispute by the Committee shall be final and binding on the Company and
Participant.
10. Entire
Agreement. The
2005 Plan is incorporated herein by reference. This Agreement and the 2005
Plan
and the Exercise Agreement constitute the entire agreement and understanding
of
the parties hereto with respect to the subject matter hereof and supersede
all
prior understandings and agreements with respect to such subject matter.
11. Notices. Any
notice required to be given or delivered to the Company under the terms of
this
Agreement shall be in writing and addressed to the Corporate Secretary of the
Company at its principal corporate offices. Any notice required to be given
or
delivered to Participant shall be in writing and addressed to Participant at
the
address indicated above or to such other address as such party may designate
in
writing from time to time to the Company. All notices shall be deemed to have
been given or delivered upon: personal delivery; three (3) days after
deposit in the United States mail by certified or registered mail (return
receipt requested); one (1) business day after deposit with any return
receipt express courier (prepaid); or one (1) business day after
transmission by telecopier with confirmation of successful transmission.
12. Successors
and Assigns. T
he Company may assign any of its rights under this Agreement. This Agreement
shall be binding upon and inure to the benefit of the successors and assigns
of
the Company. Subject to the restrictions on transfer set forth herein, this
Agreement shall be binding upon Participant and Participant’s heirs, executors,
administrators, legal representatives, successors and assigns.
13. Governing
Law. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of California, without regard to that body of law pertaining
to choice of law or conflict of law.
14. Acceptance. Participant
hereby acknowledges receipt of a copy of the 2005 Plan and this Agreement.
Participant has read and understands the terms and provisions thereof, and
accepts this Option subject to all the terms and conditions of the 2005 Plan
and
this Agreement. Participant acknowledges that there may be adverse tax
consequences upon exercise of this Option or disposition of the Shares and
that
the Company has advised Participant to consult a tax advisor prior to such
exercise or disposition.
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IN
WITNESS WHEREOF,
the
Company has caused this Agreement to be executed by its duly authorized
representative and Participant has executed this Agreement as of the Date of
Grant.
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PARTICIPANT
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By:
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______________________________
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______________________________
(Signature)
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______________________________
(Please
print name)
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__________________________ (Please
print name) |
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______________________________ (Please
print title) |
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