Exhibit 10.3
CHROMADEX, INC.
2007 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
(Incentive Stock Option
or Nonstatutory Stock Option)
Pursuant to
your Stock Option Grant Notice (“ Grant Notice
”) and this Stock Option Agreement, Chromadex, Inc., a
California corporation (the “ Company ”), has
granted you an option under its 2007 Equity Incentive Plan (the
“ Plan ”) to purchase the number of shares of
the Company’s Common Stock indicated in your Grant Notice at
the exercise price indicated in your Grant Notice. 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
your Grant Notice, provided that vesting will cease upon the
termination of your Continuous Service.
[DRAFTING NOTE: 1(a) AND (b) ARE OPTIONAL
PROVISIONS]
(a) Special Acceleration Provisions . Notwithstanding
any other provisions of the Plan to the contrary;
(i) If a
Change in Control (as such term is defined below) occurs within
twenty-four (24) months of your Vesting Commencement Date,
then for each year or part of a year that accrues following your
Vesting Commencement Date, Twenty-Five percent (25%) of your
options shall vest, or any reacquisition or repurchase rights held
by the Company with respect to Common Stock acquired pursuant to
the early exercise of such an option shall lapse with respect to
such shares, as appropriate (“ Special Change of Control
Vesting ”). Vesting of your remaining options (or
expiration of repurchase rights on the resulting remaining shares)
shall commence at a rate of 1/48 of the shares per month beginning
on the thirteenth-month anniversary of your Vesting Comencement
Date or on the twenty-fifth-month anniversary of your Vesting
Comencement Date if such Special Change of Contro Vesting occurs
during the second twelve months following your Vesting Commencement
Date.
(ii) If
(1) a Change in Control (as such term is defined below) occurs
and (2) within one (1) month prior to the date of such Change
in Control or thirteen (13) months after the date of such Change in
Control your Continuous Service terminates due to an involuntary
termination (not including death or Disability) without Cause or
due to a Constructive Termination, then the vesting and
exercisability of all remaining Options held by you shall be
accelerated in full or any reacquisition or repurchase rights held
by the Company with respect to Common Stock acquired pursuant to
the early exercise of an Option shall lapse in full, as
appropriate.
For purposes
of this Section 1 only, Accountants means the Company’s
independent certified public accountants.
For purposes
of this Section 1(a) only, Change in Control means(i) the merger,
consolidation or other reorganization of the Company, with or into
one or more entities other than an Affiliate, as a result of which
the outstanding shares of the Company immediately prior to such
merger or consolidation are, or are to be, converted
(A) solely into cash or non-voting securities of the surviving
or resulting entity, or (B) at least in part into voting
securities of the surviving or resulting entity, but such voting
securities will represent less than fifty percent (50%) of the
outstanding voting securities of the surviving or resulting entity;
(ii) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, of the assets of the company to a Person that
was not a shareholder or an Affiliate thereof on December 23,
2005 or an Affiliate of the Company; or (iii) a Person who is
not an Investor or a Shareholder or an Affiliate thereof as of the
date hereof acquires directly or indirectly fifty percent (50%) or
more of the Company’s outstanding voting securities.
(b) Parachute Payments . In the event that the
acceleration of the vesting and exercisability of the Options
and/or the lapse of reacquisition or repurchase rights with respect
to Common Stock acquired pursuant to the early exercise of an
Option provided for in Section 1(a) and benefits otherwise payable
to you (i) constitute “parachute payments” within
the meaning of Section 280G of the Code, or any comparable
successor provisions, and (ii) but for this subsection would
be subject to the excise tax imposed by Section 4999 of the
Code, or any comparable successor provisions (the “ Excise
Tax ”), then your benefits hereunder shall be
either
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(i) |
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provided to you in full, or
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(ii) |
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provided to you as to such lesser
extent which would result in no portion of such benefits being
subject to the Excise Tax,
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whichever of the foregoing amounts, when taking into account
applicable federal, state, local and foreign income and employment
taxes, the Excise Tax, and any other applicable taxes, results in
the receipt by you, on an after-tax basis, of the greatest amount
of benefits, notwithstanding that all or some portion of such
benefits may be taxable under the Excise Tax. Unless the Company
and you otherwise agree in writing, any determination required
under this Section shall be made in writing in good faith by the
Accountants. In the event of a reduction of benefits hereunder, you
shall be given the choice of which benefits to reduce. For purposes
of making the calculations required by this Section, the
Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of the Code, and other
applicable legal authority. The Company and you shall furnish to
the Accountants such information and documents as the Accountants
may reasonably request in order to make a determination under this
Section. The Company shall bear all costs the Accountants may
reasonably incur in connection with any calculations contemplated
by this Section.
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If,
notwithstanding any reduction described in this Section, the IRS
determines that you are liable for the Excise Tax as a result of
the receipt of the payment of benefits as described above, then you
shall be obligated to pay back to the Company, within thirty
(30) days after a final IRS determination or in the event that
you challenge the final IRS determination, a final judicial
determination, a portion of the payment equal to the “
Repayment Amount. ” The Repayment Amount with respect
to the payment of benefits shall be the smallest such amount, if
any, as shall be required to be paid to the Company so that your
net after-tax proceeds with respect to any payment of benefits
(after taking into account the payment of the Excise Tax and all
other applicable taxes imposed on such payment) shall be maximized.
The Repayment Amount with respect to the payment of benefits shall
be zero if a Repayment Amount of more than zero would not result in
your net after-tax proceeds with respect to the payment of such
benefits being maximized. If the Excise Tax is not eliminated
pursuant to this paragraph, you shall pay the Excise Tax.
Notwithstanding any other provision of this Section 1(b), if
(i) there is a reduction in the payment of benefits as
described in this Section, (ii) the IRS later determines that
you are liable for the Excise Tax, the payment of which would
result in the maximization of your net after-tax proceeds
(calculated as if your benefits had not previously been reduced),
and (iii) you pay the Excise Tax, then the Company shall pay
to you those benefits which were reduced pursuant to this Section
contemporaneously or as soon as administratively possible after you
pay the Excise Tax so that your net after-tax proceeds with respect
to the payment of benefits is maximized.
If you either
(i) bring any action to enforce rights pursuant to this
Section 1(b), or (ii) defend any legal challenge to your
rights hereunder, you shall be entitled to recover attorneys’
fees and costs incurred in connection with such action, regardless
of the outcome of such action; provided, however, that in the event
such action is commenced by you, the court finds the claim was
brought in good faith.
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;
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(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; and
(d) if your option is an incentive stock option, then,
as provided in the Plan, to the extent that the aggregate Fair
Market Value (determined at the time of grant) of the shares of
Common Stock with respect to which your option plus all other
incentive stock options you hold are exercisable for the first time
by you during any calendar year (under all plans of the Company and
its Affiliates) exceed
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