AgraQuest, Inc.
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1995 STOCK OPTION PLAN
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As Amended
1. PURPOSE: This 1995 Stock Option Plan ("Plan") is established as a
compensatory plan to attract, retain and provide equity incentives to selected
persons to promote the financial success of AgraQuest, Inc. a Delaware
corporation, (the "Company"). Capitalized terms not previously defined herein
are defined in Section 17 of this Plan.
2. TYPES OF OPTIONS AND SHARES: Options granted under this Plan (the "Options")
may be either (a) incentive stock options ("ISO"') within the meaning of Section
42:2 of the Internal Revenue Code of 1986, as amended (the "revenue Code"), or
(b) nonqualified stock options ("NQSOs"), as designated at the time of grant.
The shares of stock that may be purchased upon exercise of Options granted under
this Plan (the "Shares") are shares of the common stock, $0.001 par value, of
the Company.
3. NUMBER OF SHARES: The aggregate number of Shares that may be issued pursuant
to Options granted under this Plan is 2,500,000 Shares, subject to adjustment as
provided in this Plan. If any Option expires or is terminated without being
exercised in whole or in part, the unexercised or released Shares from such
Option shall be available for future grant and purchase under this Plan. At all
times during the term of this Plan, the Company shall reserve and keep available
such number of Shares as shall be required to satisfy the requirements of
outstanding Options under this Plan.
4. ELIGIBILITY: Options may be granted to employees, officers, directors,
consultants, independent contractors and advisers (provided such consultants,
contractors and advisers render bona fide services not in connection with the
offer and sale of securities in a capital-raising transaction) of the Company or
any Parent, Subsidiary or Affiliate of the Company. ISOs may be granted only to
employees (including officers and directors who are also employees) of the
Company or a Parent or Subsidiary of the Company. The Committee (as defined in
Section 14) in its sole discretion shall select the recipients of Options
("Optionees"). An Optionee may be granted more than one Option under this Plan.
The Company may also, from time to time, assume outstanding options granted by
another company, whether in connection with an acquisition of such other company
or otherwise, by either (a) granting an Option under this Plan in replacement of
the option assumed by the Company, or (b) treating the assumed option as if it
had been granted under this Plan if the terms of such assumed option could be
applied to an Option granted under this Plan. Such assumption shall be
permissible if the holder of the assumed option would have been eligible to be
granted an Option hereunder if the other company had applied the rules of this
Plan to such grant.
5. TERMS AND CONDITIONS OF OPTIONS: The Committee shall determine whether each
Option is to be an ISO or an NQSO, the number of Shares subject to the Option,
the exercise price of the Option, the period during which the Option may he
exercised. and all other terms and conditions of the Option, subject to the
following:
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. 5.1 FORM OF OPTION GRANT: Each Option granted under this Plan shall be
evidenced by a written Stock Option Grant (the "Grant") in such form (which need
not be the same for each Optionee) as the Committee shall from time to time
approve. The Grant shall comply with and be subject to the terms and conditions
of this Plan.
. 5.2 DATE OF GRANT: The date of grant of an Option shall be the date on which
the Committee makes the determination to grant such Option unless otherwise
specified by the Committee. The Grant representing the Option will be delivered
to Optionee with a copy of this Plan within a reasonable time after the granting
of the Option.
. 5.3 EXERCISE PRICE: The exercise price of an Option shall be not less than
100% of the Fair Market Value of the Shares on the date the Option is granted.
The exercise price of any Option granted to a person owning more than 10% of the
total combined voting power of all classes of stock of the Company or any Parent
or Subsidiary of the Company ("Ten Percent Shareholder") shall not be less than
110% of the Fair Market Value of the Shares on the date the Option is granted.
. 5.4 EXERCISE PERIOD: Options shall be exercisable within the times or upon
the events determined by the Committee as set forth in the Grant; provided,
however, that no Option shall be exercisable after the expiration of ten (10)
years from the date the Option is granted, and provided further that no ISO
granted to a Ten Percent Shareholder shall be exercisable after the expiration
of five (5) years from the date the Option is granted.
. 5.5 LIMITATIONS ON ISOs: The aggregate Fair Market Value (determined as of
the time an Option is granted) of stock with respect to which ISOs are
exercisable for the first time by an Optionee during any calendar year (under
this Plan or under any other incentive stock option plan of the Company or any
Parent or Subsidiary of the Company) shall not exceed $100,000. If the Fair
Market Value of Shares with respect to which ISOs are exercisable for the first
time by an Optionee during any calendar year exceeds $100,000, the Options for
the first $100,000 worth of Shares to become exercisable in such year shall be
ISOs and the Options for the amount in excess of $100,000 that becomes
exercisable in that year shall be NQSOs. In the event that the Revenue Code or
the regulations promulgated thereunder are amended after the effective date of
this Plan to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, such different limit shall be incorporated
herein and shall apply to any Options granted after the effective date of such
amendment.
. 5.6 OPTIONS NON-TRANSFERABLE: Options granted under this Plan, and any
interest therein, shall not be transferable or assignable by Optionee, and may
not be made subject to execution, attachment or similar process, otherwise than
by will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act or the rules thereunder, and shall be exercisable
during the lifetime of Optionee only by Optionee; provided. however, that NQSOs
held by an Optionee who is not an officer or director of the Company or other
person (in each case, an "Insider") whose transactions in the Company's common
stock are subject to Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), may be transferred to such family members, trusts
and charitable institutions as the Committee, in its sole discretion, shall
approve at the time of the grant of such Option.
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. 5.7 ASSUMED OPTIONS: In the event the Company assumes an option granted by
another company, the terms and conditions of such option shall remain unchanged
(except the exercise price and the number and nature of shares issuable upon
exercise, which will be adjusted appropriately pursuant to Section 424 of the
Revenue Code). In the event the Company elects to grant a new option rather than
assuming an existing option (as specified in Section 4), such new option need
not he granted at Fair Market Value on the date of grant and may instead be
granted with a similarly adjusted exercise price.
6. EXERCISE OF OPTIONS:
. 6.1 NOTICE: Options may be exercised only by delivery to the Company of a
written stock option exercise agreement (the "Exercise Agreement") in a form
approved by the Committee (which need not be the same for each Optionee),
stating the number of Shares being purchased, the restrictions imposed on the
Shares, if any, and such representations and agreements regarding Optionee's
investment intent and access to information, if any, as may be required by the
Company to comply with applicable securities laws, together with payment in full
of the exercise price for the number of Shares being purchased.
. 6.2 PAYMENT: Payment for the Shares may be made in cash (by check) or, where
approved by the Committee in its sole discretion and where permitted by law: (a)
by cancellation of indebtedness of the Company to the Optionee; (b) by surrender
of shares of common stock of the Company having a Fair Market Value equal to the
applicable exercise price of the Options that have been owned by Optionee for
more than six (6) months (and which have been paid for within the meaning of the
Securities and Exchange Commission ("'SEC") Rule 144 and, if such Shares were
purchased from the Company by use of a promissory note, such note has been fully
paid with respect to such shares), or were obtained by Optionee in the open
public market; (c) by waiver of compensation due or accrued to Optionee for
services rendered; (d) provided that a public market for the Company's stock
exists, through a "same day sale" commitment from Optionee and a broker dealer
that is a member of the National Association of Securities Dealers (an "NASD
Dealer") whereby Optionee irrevocably elects to exercise The 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; (e) provided that a public market for
the Company's stock exists, through a "margin" commitment from Optionee and an
NASD Dealer whereby Optionee irrevocably elects to exercise the 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 (f) by any combination of
the foregoing.
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. 6.3 WITHHOLDING TAXES: Prior to issuance of the Shares upon exercise of an
Option, Optionee shall pay or make adequate provision for any federal or state
withholding obligations of the Company, if applicable. Where approved by the
Committee in its sole discretion, Optionee may provide for payment of
withholding taxes upon exercise of the 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 Optionee by deducting the Shares retained from the Shares exercised.
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined in accordance
with Section 83 of the Revenue Code (the "Tax Date"). All elections by Optionees
to have Shares withheld for this purpose shall be made in writing in a form
acceptable to the Committee and shall be subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, the election shall be irrevocable as to The particular
Shares as to which the election is made; and
(c) all elections shall be subject to the consent or disapproval of the
Committee.
In addition, if Optionee is an Insider, and if the Company is subject to
Section 16(b) of the Exchange Act, the following shall apply:
(d) the election may not be made within six (6) months of the date of grant
of the Option; provided, however, that this limitation shall not apply
in the event that death or disability of Optionee occurs prior to the
expiration of the six (6) month period;
(e) the election must be made either six (6) months prior to the Tax Date
or in the 10-day period beginning on the third day following the public
release of the Company's quarterly or annual summary statement of
operations; and
(f) if the Tax Date is deferred until six months after exercise of the
Option because no election is filed under Section 83(b) of the Revenue
Code, Optionee shall receive the full number of Shares with respect to
which the Option is exercised, but Optionee shall be unconditionally
obligated to tender back to the Company the proper number of Shares on
the Tax Date.
. 6.4 LIMITATIONS ON EXERCISE: Notwithstanding the exercise periods set forth
in the Grant, exercise of an Option shall always be subject to the following :
6.4.1 If Optionee ceases to be employed by the Company or any Parent,
Subsidiary or Affiliate of the Company for any reason except death or
disability, Optionee may exercise such Optionee's ISOs to the extent (and only
to the extent) that they would have been exercisable upon the date of
termination, within ninety (90) days after the date of termination (or such
shorter time period as may be specified in the Grant).
6.4.2 If Optionee is an insider and the Company is subject to Section
16(b) of the Exchange Act, Optionee's Option will remain exercisable until the
end of the thirty (30) day period commencing on the first date on which Optionee
may exercise without having a matching purchase and sale under Section 16(b).
with any extension beyond ninety (90) days after termination of employment
deemed to be as an NQSO, and provided further that in no event may an Option be
exercisable later than the expiration date of the Option.
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6.4.3 If Optionee's employment with the Company or any Parent,
Subsidiary or Affiliate of the Company is terminated because of the death of
Optionee or disability of Optionee within the meaning of Section 22(e)(3) of the
Revenue Code, Optionee's ISOs may be exercised to the extent (and only to the
extent) that they would have been exercisable by Optionee on the date of
termination, by Optionee (or Optionee's legal representative) within twelve (12)
months after the date of termination (or such shorter time period as may be
specified in the Grant), but in any event no later than the expiration date of
the ISOs.
6.4.4 The Committee shall have discretion to determine whether Optionee
has ceased to be employed by the Company or any Parent, Subsidiary or Affiliate
of the Company and the effective date on which such employment terminated.
6.4.5 In the case of an Optionee who is a director, independent
consultant, contractor or adviser, the Committee will have the discretion to
determine whether Optionee is "employed by the Company or any Parent, Subsidiary
or affiliate of the Company" pursuant to the foregoing Sections.
6.4.6 The Committee may specify a reasonable minimum number of Shares
that may be purchased on any exercise of an Option. provided that such minimum
number will not prevent Optionee from exercising the full number of Shares as to
which the Option is then exercisable.
6.4.7 An Option shall not be exercisable unless such exercise is in
compliance with the Securities Act of 1933 as amended (the "Securities Act"),
all applicable state securities laws and the requirements of any stock exchange
or national market system upon which the Shares may then be listed, as they are
in effect on the date of exercise. The Company shall be under no obligation to
register the Shares with the SEC or to effect compliance with the registration,
qualification or listing requirements of any state securities laws, stock
exchange or national market system, and the Company shall have no liability for
any inability or failure to do
7. RESTRICTIONS ON SHARES: At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) in the Grant (a) a right of first
refusal to purchase all Shares that an Optionee (or a subsequent transferee) may
propose to transfer to a third party and or (b) a right to repurchase a portion
of or all Shares held by an Optionee upon Optionee's termination of employment
or service with the Company or a Parent, Subsidiary or Affiliate of the Company,
for any reason within a specified time as determined by the Committee at the
time of grant at Optionee's original purchase price, the Fair Market Value of
such Shares or a price determined by a formula or other provision set forth in
the Grant.
8. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS: The Committee shall have the
power to modify, extend or renew outstanding Options and to authorize the grant
of new Options in substitution therefor, provided that any such action may not,
without the written consent of Optionee, impair any rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered shall be treated in accordance with Section 424(h) of the
Revenue Code. The Committee shall have the power to reduce the exercise price of
outstanding Options without the consent of Optionees by a written notice to the
Optionees affected; provided, however, that the exercise price per Share may not
be reduced below the minimum exercise price that would be permitted under
Section 5.3 of this Plan for Options granted on the date the action is taken to
reduce the exercise price.
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9. STOCK OWNERSHIP, FINANCIAL STATEMENTS: No Optionee shall have any of the
rights of a shareholder with respect to any Shares subject to an Option until
such Option is properly exercised. No adjustment shall be made for dividends or
distributions or other rights for which the record date is prior to such date,
except as provided in this Plan. However, the Company shall make available to
each Optionee in the office of the Treasurer, during the period for which
Optionee has one or more Options outstanding, copies of the financial statements
of the Company, consisting of, at a minimum, a balance sheet and an income
statement, at such time after the close of each fiscal year of the Company as
such statements are released by the Company to its shareholders. The Company
shall not be required to provide such information to key employees whose duties
in connection with the Company assume their access to equivalent information.
10. NO OBLIGATION TO EMPLOY: Nothing in this Plan or any Option granted under
this Plan shall confer on any Optionee any right to continue in the employ of,
or other relationship with, the Company or any Parent, Subsidiary or Affiliate
of the Company or limit in any way the right of the Company or any Parent,
Subsidiary or Affiliate of the Company to terminate Optionee's employment or
other relationship at any time, with or without cause.
11. ADJUSTMENT OF OPTION SHARES: In the event that the number of outstanding
shares of common stock of the company is changed by a stock dividend, stock
split, reverse stock split, recapitalization, combination, reclassification or
similar change in the capital structure of the Company without consideration, or
if a substantial portion of the assets of the Company are distributed, without
consideration in a spinoff or similar transaction, to the shareholders of the
Company, the number of Shares available under this Plan and the number of Shares
subject to outstanding Options and the exercise price per Share of such Options
shall be proportionately adjusted, subject to any required action by the Board
of Directors (the "Board") or shareholders of the Company and compliance with
applicable securities laws; provided, however, that a fractional share shall not
be issued upon exercise of any Option and any fractions of a Share that would
have resulted shall either be cashed out at Fair Market Value or the number of
Shares issuable under the Option shall be rounded up to the nearest whole
number, as determined by the Committee; and provided further that the exercise
price may not be decreased to below the par value, if any, for the Shares.
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12. ASSUMPTION OF OPTIONS BY SUCCESSORS.
. 12.1 ASSUMPTION OR SUBSTITUTION:
In the event of:
(a) a merger or consolidation in which the Company is not the surviving
corporation (other than a merger or consolidation with a wholly owned
subsidiary, a reincorporation, or other transaction in which there is
no substantial change in the shareholders of the corporation and the
Options granted under this Plan are assumed by the successor
corporation, which assumption shall be binding on all Optionees),
(b) a dissolution or liquidation of the Company,
(c) the sale of substantially all of the assets of the Company,
or (d) any other transaction which qualifies as a "corporate transaction"
under Section 424(a) of the Revenue Code wherein the shareholders of
the Company give up all of their equity interest in the Company (except
for the acquisition of all or substantially all of the outstanding
shares of the Company),
any or all outstanding Options may be assumed by the successor corporation,
which assumption shall be binding on all Optionees. In the alternative, the
successor corporation may substitute an equivalent option or provide
substantially similar consideration to Optionees as was provided to shareholders
(after taking into account the existing provisions of Optionee's options, such
as the exercise price and the vesting schedule). The successor corporation may
also issue, in place of outstanding shares of the Company held by Optionee as a
result of the exercise of an Option that is subject to repurchase, substantially
similar shares or other property subject to similar repurchase restrictions no
less favorable to Optionee.
. 12.2 VESTING and EXPIRATION: In the event such successor corporation, if
any, refuses to assume or substitute Options, as provided above, pursuant to a
transaction described in Subsections 12.1 above, or there is no successor
corporation, and if the Company is ceasing to exist as a separate corporate
entity, the Options shall, notwithstanding any contrary terms in the Grant, all
unexercised Options theretofore granted under the Plan shall become immediately
fully vested and exercisable. Upon Optionee's exercise of his Options in
accordance with the term of the Plan prior to the closing of any such
dissolution, consolidation or merger, and issuance of a stock certificate for
the purchased shares, the Optionee shall become a stockholder of the company
with respect to such shares. If the then-outstanding Options are not exercised
at the time such dissolution, merger or consolidation becomes effective, those
Options shall then terminate and become null and void (and, in the case of a
transaction described in Subsection 12.1(a) above, if the Company has reserved
to itself a right to repurchase Shares issued on exercise of Options at the
original purchase price of such Shares, such right shall terminate).
. 12.3 ADDITIONAL PROVISIONS: Subject to the foregoing provisions of this
Section 12, in the event of the occurrence of any transaction described in
Section 12.1, any outstanding Option shall be treated as provided in the
applicable agreement or plan of merger, consolidation, dissolution, liquidation,
sale of assets or other "corporate transaction".
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13. ADOPTION AND SHAREHOLDER APPROVAL: This Plan shall become effective on the
date that it is adopted by the Board of the Company. This Plan shall be approved
by the shareholders of the Company, in any manner permitted by applicable
corporate law, within twelve months before or after the date this Plan is
adopted by the Board. Upon the effective date of the Plan, the Board may grant
Options pursuant to this Plan; provided that, in the event that shareholder
approval is not obtained within the time period provided herein, all Options
granted hereunder shall terminate. No Option that is issued as a result of any
increase in the number of shares authorized to be issued under this Plan shall
be exercised prior to the time such increase has been approved by the
shareholders of the Company and all such Options granted pursuant to such
increase shall similarly terminate if such shareholder approval is not obtained.
After the Company becomes subject to Section 16(b) of the Exchange Act, the
Company will comply with the requirements of Rule 16b-3 with respect to
shareholder approval.
14. ADMINISTRATION: This Plan may be administered by the Board or a committee
appointed by the Board (the "Committee"). If at the time the Company registers
under the Exchange Act, a majority of the Board is not comprised of
Disinterested Persons. the Company will take appropriate steps to comply with
the disinterested director requirements of Section 16(b) of the Exchange Act,
which may consist of the appointment by the Board of a Committee consisting of
not less than two members of the Board, each of whom is a Disinterested Person.
As used in this Plan. references to the "Committee" shall mean either the
committee appointed by the Board to administer this Plan or the Board if no
committee has been established. After registration of the Company under the
Exchange Act, Board members who are not Disinterested Persons may not vote on
any matters affecting the administration of this Plan or on the grant of any
Options pursuant to this Plan, but any such member may be counted for
determining the existence of a quorum at any meeting of the Board during which
action is taken with respect to Options or administration of this Plan. The
interpretation by the Committee of any of the provisions of this Plan or any
Option granted under this Plan shall be final and binding upon the Company and
all persons having an interest in any Option or any Shares purchased pursuant to
an Option. The Committee may delegate to officers of the Company the authority
to grant Options under this Plan to Optionees who are not Insiders of the
Company.
15. TERM OF PLAN: Options may be granted pursuant to this Plan from time to time
within a period of ten (10) years after the date on which this Plan is adopted
by the Board.
16. AMENDMENT OR TERMINATION OF PLAN: The Committee may at any time terminate or
amend this Plan in any respect including (but not limited to) amendment of any
form of grant, exercise agreement or instrument to be executed pursuant to this
Plan; provided, however, that the Committee shall not, without the approval of
the shareholders of the Company. amend this Plan in any manner that requires
such shareholder approval pursuant to the Revenue Code or the regulations
promulgated thereunder as such provisions apply to ISO plans or pursuant to the
Exchange Act or Rule l6b-3 (or its successor) promulgated thereunder.
17. CERTAIN DEFINITIONS: As used in this Plan, the following terms shall have
the following meanings:
. 17.1 "PARENT" means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if, at the time of the granting of
the Option, each of such corporations other than the Company owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
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. 17.2 "SUBSIDIARY" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the time of
granting of the Option, each of the corporations other than the last corporation
in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
. 17.3 "AFFILIATE" means any corporation that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with, another corporation, where "control" (including the terms
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to cause the direction of the management and policies of
the corporation. whether through the ownership of voting securities, by contract
or otherwise.
. 17.4 "DISINTERESTED PERSON" shall have the meaning set forth in Rule
16b-3(c)(2)(i) as promulgated by the SEC under Section 16(b) of the Exchange
Act, as such rule is amended from time to time and as interpreted by the SEC.
. 17.5 "FAIR MARKET VALUE" shall mean the fair market value of the Shares as
determined by The Committee from time to time in good faith. If a public market
exists for the Shares, the Fair Market Value shall be the average of the last
reported bid and asked prices for common stock of the Company on the last
trading day prior to the date of determination (or the average closing price
over the number of consecutive working days preceding the date of determination
as the Committee shall deem appropriate) or, in the event the common stock of
the Company is listed on a stock exchange or on the NASDAQ National Market
System, the Fair Market Value shall be the closing price on such exchange or
quotation system on the last trading day prior to the date of determination (or
the average closing price over the number of consecutive working days preceding
the date of determination as the Committee shall deem appropriate).
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1995 Stock Option Plan - AgraQuest Inc.
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