EXHIBIT A-1 to EXECUTIVE EMPLOYMENT AGREEMENT between DYADIC INTERNATIONAL, INC. and GLENN E. NEDWIN TIME VESTED STOCK OPTION AGREEMENT
Exhibit
10.2
EXHIBIT
A-1
to
EXECUTIVE
EMPLOYMENT AGREEMENT
between
DYADIC
INTERNATIONAL, INC.
and
▇▇▇▇▇
▇. ▇▇▇▇▇▇
TIME
VESTED STOCK OPTION AGREEMENT
DYADIC
INTERNATIONAL, INC.
2001
EQUITY COMPENSATION PLAN
This
STOCK OPTION GRANT AGREEMENT (this “Agreement”),
dated
as of March 16, 2006 (the “Date
of Grant”),
is
delivered by Dyadic International, Inc. (the “Company”)
to
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the “Grantee”).
RECITALS
A. Concurrently
with the execution and delivery of this Agreement, the Grantee has entered
into
an employment agreement with the Company (as may be amended, restated or
otherwise modified, the “Employment
Agreement”)
dated
of even date herewith (the “Agreement
Date”)
but
effective as of the “Effective Date” therein set forth, pursuant to which the
Grantee will serve as the Chief Science Officer of the Company, as President
of
the BioSciences Business of the Company’s wholly-owned subsidiary and as a Vice
President of the Company.
B. The
Dyadic International, Inc. 2001 Equity Compensation Plan (as may be amended,
restated or otherwise modified, the “Plan”)
provides for the grant of options to purchase shares of common stock of the
Company. A copy of the Plan has heretofore been furnished to the Grantee,
receipt of which is hereby expressly acknowledged. Capitalized terms used but
not otherwise defined herein shall have the meanings given such terms in the
Plan.
C. As
contemplated in Section 1(a) of the Plan, the Board of Directors of the Company
has appointed a committee (the “Committee”)
to
administer the Plan.
D. To
induce
the Grantee to enter into the Employment Agreement and continue to perform
the
obligations specified therein and promote the best interests of the Company,
the
Committee has decided to Grant an Option to the Grantee under the Plan to
purchase shares of Company Stock (“Shares”).
AGREEMENT:
NOW,
THEREFORE, upon the condition that the Executive shall become an employee of
the
Company on the Effective Date, with the understanding that this Agreement shall
become null and void if Executive does not become employed by the Company as
set
forth in Section 1.11 of the Employment Agreement, the parties to this
Agreement, intending to be legally bound hereby, agree as follows:
1. Grant
of Option.
Subject
to the terms and conditions set forth in this Agreement and in the Plan, the
Company hereby grants to the Grantee an Option to purchase 445,022 Shares at
an
exercise price of $2.96 per Share (which amount is the closing trading price
of
the Shares on the Grant Date on the American Stock Exchange).
The
Option shall become exercisable in accordance with the terms of Paragraph 2
below. In accordance with Section 5(g) of the
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Plan,
the
Option shall be treated as an Incentive Stock Option except to the extent that
the aggregate Fair Market Value of the Shares as of the date of the grant with
respect to which Incentive Stock Option is for the first time by the Grantee
during any calendar year under the Plan exceeds $100,000, then the Option,
as to
such excess, shall be treated as a Nonqualified Stock Option.
2. Exercisability
of Option.
The
number of Shares in respect of which the Grantee shall be permitted to exercise
the Option shall be determined by reference to the dates (each a “Vesting
Date”)
fixed
in the table set forth below, provided
that:
(a)
exercisability of Shares is cumulative; and (b) there must not have occurred
a
termination of the Grantee’s employment with the Company (the “Employment
Relationship”)
for
any reason whatsoever (the date of such termination being hereinafter referred
to as the “Termination
Date”)
prior
to a Vesting Date in order for the Option to be exercisable in respect of the
Shares indicated opposite that Vesting Date:
Vesting
Date Additional
Shares for Which the Option is Exercisable
1st Anniversary
of Date of Grant 1/4th
of
Option Shares
2nd
Anniversary of Date of Grant 1/4th
of
Option Shares
3rd Anniversary
of Date of Grant 1/4th
of
Option Shares
4th
Anniversary of Date of Grant 1/4th
of
Option Shares
The
preceding to the contrary notwithstanding, the Option shall become 100% vested
upon the occurrence of the termination of the Grantee’s employment with the
Company on account of either a “Termination by the Company Without Cause” or a
“Termination by the Executive for Good Reason,” as those terms are defined in
the Employment Agreement.
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3.
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Term
of Option.
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(a) The
Option shall be exercisable for a term commencing with the Date of Grant and
ending on the earlier of (i) fifth anniversary of the Date of Grant or (ii)
the
termination of the Plan, unless the Option is terminated at an earlier date
in
accordance with the provisions of this Agreement or the Plan.
(b) Any
portion of the Option that is not exercisable on the Termination Date shall
terminate on that date.
(c) The
Option, to the extent exercisable, shall automatically terminate upon the
earlier of (x) the expiration of the period fixed in Paragraph 3(a), above,
or
(y) the first to occur of any of the following events:
(i) Subject
to clause (v) below, the expiration of the 90 day period following the
Termination Date, if the termination is for any reason other than the Disability
of the Grantee, his death or for Cause.
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(ii) Subject
to clause (v) below, the expiration of the one (1) year period after the
Termination Date, to the extent the Option is then unvested, if the termination
of the Employment Relationship was on account of the Grantee’s
Disability.
(iii) The
expiration of the one (1) year period after the Termination Date, if the reason
for the termination of the Employment Relationship was on account of the
Grantee’s death.
(iv) The
Termination Date, if the termination of the Employment Relationship was for
Cause.
(v) The
provisions of clauses (i) and (ii) above to the contrary notwithstanding, if
the
Grantee engages in conduct that constitutes Cause after the Termination Date,
the Option shall immediately terminate to the extent then unexercised
(regardless of vesting).
(d) In
accordance with Section 5(e)(ii) of the Plan, if the provisions of either clause
(iv) or clause (v) of Paragraph 3(c) applied to the termination of the Option,
the Grantee shall automatically forfeit all Shares underlying any exercised
portion of the Option for which the Company has not yet delivered the share
certificates, upon refund by the Company of the exercise price paid by the
Grantee for such Shares.
4. Exercise
Procedures.
(a) Subject
to the provisions of Paragraphs 2 and 3 above, the Grantee may exercise part
or
all of the exercisable portion of the Option by giving the Committee written
notice of intent to exercise in the manner provided in this Agreement,
specifying the number of Shares as to which the Option is to be exercised.
On
the delivery date, the Grantee shall pay the exercise price (i) in cash, (ii)
with the approval of the Committee, by delivering Shares of the Company which
shall be valued at their fair market value on the date of delivery (such
valuation to be determined in the manner fixed in the Plan), (iii) payment
through a broker in accordance with procedures permitted by Regulation T of
the
Federal Reserve Board or (iv) by such other method as the Committee may approve,
provided that the Committee may, in its absolute discretion, impose from time
to
time such limitations as it deems appropriate on the use of Shares of the
Company to exercise the Option.
(b) The
obligation of the Company to deliver Shares upon exercise of the Option shall
be
subject to all applicable laws, rules, and regulations and such approvals by
governmental agencies as may be deemed appropriate by the Committee, including
such actions as Company counsel shall deem necessary or appropriate to comply
with relevant securities laws and regulations. The Company may require that
the
Grantee (or other person exercising the Option after the Grantee's death)
represent that the Grantee is purchasing Shares for the Grantee's own account
and not with a view to or for sale in connection with any distribution of the
Shares, or such other representation as the Committee deems appropriate. All
obligations of the Company under this Agreement shall be subject to the rights
of the Company as set forth in the Plan to withhold amounts required to be
withheld for any taxes, if applicable.
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Subject
to Committee approval, in its absolute discretion, the Grantee may elect to
satisfy any income tax withholding obligation of the Company with respect to
the
Option by having Shares withheld up to an amount that does not exceed the
minimum applicable withholding tax rate for federal (including FICA), state
and
local tax liabilities.
5. Restrictions
on Transfer of Shares.
In
addition to the restrictions imposed by the Plan on the transferability of
the
Shares acquired by an the Grantee’s exercise of the Option granted hereby,
without the prior consent of the Company, for so long as the Company is not
a
“Reporting Company” within the meaning of the Exchange Act of 1934, as amended,
the Grantee shall make no transfer of the Shares (a) for a period of five (5)
years following the date of this Agreement and (b) thereafter, to any competitor
of the Company.
6. Change
of Control.
The
provisions of the Plan applicable to a Change of Control shall apply to the
Option, and, in the event of a Change of Control, the Committee may take such
actions as it deems appropriate pursuant to the Plan.
7. Restrictions
on Exercise.
Only
the Grantee may exercise the Option during the Grantee's lifetime and, after
the
Grantee's death, the Option shall be exercisable (subject to the limitations
specified in the Plan) solely by the legal representatives of the Grantee,
or by
the person who acquires the right to exercise the Option by will or by the
laws
of descent and distribution, to the extent that the Option is exercisable
pursuant to this Agreement.
8. Grant
Subject to Plan Provisions.
This
grant is made pursuant to the Plan, the terms of which are incorporated herein
by reference, and in all respects shall be interpreted in accordance with the
Plan. The grant and exercise of the Option are subject to the provisions of
the
Plan and to interpretations, regulations and determinations concerning the
Plan
established from time to time by the Committee in accordance with the provisions
of the Plan, including, but not limited to, provisions pertaining to (i) rights
and obligations with respect to withholding taxes, (ii) the registration,
qualification or listing of the Shares, (iii) changes in capitalization of
the
Company and (iv) other requirements of applicable law. The Committee shall
have
the authority to interpret and construe the Option pursuant to the terms of
the
Plan, and its decisions shall be conclusive as to any questions arising
hereunder.
9. No
Employment or Other Rights.
The
grant of the Option shall not confer upon the Grantee any right to be retained
by or in the employ or service of the Company and shall not interfere in any
way
with the right of the Company to terminate the Grantee's employment or service
at any time. The right of the Company to terminate at will the Grantee's
employment or service at any time for any reason is specifically
reserved.
10. No
Shareholder Rights.
Neither
the Grantee, nor any person entitled to exercise the Grantee's rights in the
event of the Grantee's death, shall have any of the rights and privileges of
a
shareholder with respect to the Shares subject to the Option, until certificates
for Shares have been issued upon the exercise of the Option.
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11. Assignment
and Transfers.
The
rights and interests of the Grantee under this Agreement may not be sold,
assigned, encumbered or otherwise transferred except, in the event of the death
of the Grantee, by will or by the laws of descent and distribution. In the
event
of any attempt by the Grantee to alienate, assign, pledge, hypothecate, or
otherwise dispose of the Option or any right hereunder, except as provided
for
in this Agreement, or in the event of the levy or any attachment, execution
or
similar process upon the rights or interests hereby conferred, the Company
may
terminate the Option by notice to the Grantee, and the Option and all rights
hereunder shall thereupon become null and void. The rights and protections
of
the Company hereunder shall extend to any successors or assigns of the Company
and to the Company's parents, subsidiaries, and affiliates. This Agreement
may
be assigned by the Company without the Grantee's consent.
12. Applicable
Law.
The
validity, construction, interpretation and effect of this instrument shall
be
governed by and construed in accordance with the laws of the State of Florida,
without giving effect to the conflicts of laws provisions thereof.
13. Notice.
Any
notice to the Company provided for in this instrument shall be addressed to
the
Company in care of the Chief Executive Officer at the Company's principal
executive offices,
and
any
notice to the Grantee shall be addressed to such Grantee at the current address
shown on the payroll of the Company, or to such other address as the Grantee
may
designate to the Company in writing. Any notice shall be delivered by hand,
sent
by telecopy or enclosed in a properly sealed envelope addressed as stated above,
registered and deposited, postage prepaid, in a post office regularly maintained
by the United States Postal Service.
14. Counterparts.
This
Agreement may be signed in any number of counterparts and by facsimile
signature, each of which shall be deemed to be an original, and all of which
taken together shall be deemed to be one and the same instrument.
15. Complete
Understanding.
This
Agreement, together with the Plan, contains the entire agreement of the parties
relating to the subject matter hereof and supersedes all prior agreements and
understanding with respect to such subject matter, and the parties hereto have
made no agreements, representations or warranties relating to the subject matter
of this Agreement which are not set forth herein, provided that the Parties
are
parties to the Employment Agreement. Nothing contained in this Agreement shall
be construed to limit or affect in any manner or to any extent the restrictions
or prohibitions that are applicable to the Grantee under the Employment
Agreement or the duration thereof. Similarly, except as expressly provided
otherwise in this Agreement, nothing contained in the Employment Agreement
shall
be construed to limit or affect in any manner or to any extent the restrictions
or prohibitions that are applicable to the Grantee under this
Agreement.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the Company has caused a duly authorized officer to execute
this Agreement, and the Grantee has executed this Agreement, effective as of
the
Date of Grant.
THE
COMPANY: GRANTEE:
DYADIC
INTERNATIONAL, INC.
By:
/s/
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Accepted:
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Executive Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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